The Comptroller and Auditor General (CAG) of India has pulled up the Assam Gas Company Limited (AGCL) for availing loans at higher interest for execution of major projects despite availability of surplus funds in fixed deposits.
The company suffered a loss of Rs 2.19 crore due to loans at higher interest, even though it had surplus funds in fixed deposits which earned lower interest, a report by CAG placed in the state assembly said.
In addition, the company suffered a loss of interest of Rs 1.34 crore due to parking of surplus funds in current accounts instead of short-term deposits.
The CAG also pulled up the company for failing to evolve a scientific and uniform method for fixing transportation charges and its billing.
The audit findings also indicate the need for strengthening the internal audit and control system.
The 'Performance Audit' by CAG was conducted to ascertain efficiency and economy in natural gas procurement, working of compressor station, infrastructure development, transportation of gas, inventory and fund management and internal control mechanisms existing in the company.
The company has been procuring natural gas from both government sources and a private producer, but it failed to maintain efficiency and economy in gas purchase from private producer and incurred an avoidable expenditure of Rs 8.63 crore.
Low-pressure natural gas received from Oil India Limited is compressed in the compressor station to supply as high-pressure gas to three industrial consumers.
After adding four compressors at a total cost of Rs 20.19 crore to the existing six compressors, the actual utilisation was increased from only two to three compressors and this indicates that the additional investment was not justified, the report pointed out.
The gas supply system to three out of six major industrial consumers was revamped at a total cost of Rs 75.42 crore and this resulted in creation of excess capacity than the actual requirement by incurring an avoidable infrastructure cost of Rs 20.24 crore.
The volume of gas transported during 2004-09 increased by 14 per cent whereas the transportation charge levied during the same period showed an increase of 82 per cent.
AGCL is a wholly owned state government undertaking mainly for processing and transportation of natural gas for industrial consumers in Assam.
