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Govt gives nod for CAG audit of discoms’ accounts

Bowing to the clamour for scrutiny of the accounts of private power distribution companies operating in the city,the Delhi government has finally approved their audit by the Comptroller and Auditor General.

Written by Utkarsh Anand | New Delhi | Published: March 13, 2012 3:21:55 am

Bowing to the clamour for scrutiny of the accounts of private power distribution companies operating in the city,the Delhi government has finally approved their audit by the Comptroller and Auditor General (CAG).

According to a cabinet note,the government sanctioned an audit of the three discoms — BSES Yamuna and Rajdhani,and NDPL — “since inception.”

The decision to get a CAG audit carried out was disclosed during a hearing in the Delhi High Court on Monday when its standing counsel Najmi Waziri adduced before the bench the note of cabinet approval.

This note forms a part of the same decision note wherein the government had given its consent to Delhi Electricity Regulatory Commission (DERC) to invest fresh equity worth Rs 500 crore in BSES Rajdhani and BSES Yamuna. As per the note,the equity was infused to maintain the government’s 49 per cent stake in the shareholding pattern and to enable the companies to raise a loan from IDBI Bank.

“The government,in order to address the public concerns and also to carry forth their conviction in the transparent functioning of the discoms,has approved a CAG audit into the affairs of all three power distribution companies in Delhi,” Najmi Waziri informed the bench,comprising Acting Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw.

Waziri further sought some time to put the government’s stand before the court by filing an affidavit and the court gave him a week’s time to do it.

Meanwhile,the counsel appearing for the discoms opposed the government’s move and also cited its previous affidavit wherein the government had cited its “constitutional and legal limitations” while stating that it had “no locus standi in law to accede to the request of the DERC and refer the matter of audit of accounts of the private discoms to the CAG since there was no such enabling provision under the Acts concerned.

The counsels also sought the government to place on record the approval of the L-G in this regard,contending such a sanction was mandatory by law. They said that they might challenge the government’s decision by moving separate petitions.

The disclosure came in the wake of a PIL by the United RWAs Joint Action (URJA),which alleged that the government succumbed to pressure from the discoms,which wanted a hike in power tariff by faking losses. Alleging that the losses were manipulated and not real,the RWA had sought an independent audit by the CAG into the discoms’ accounts and has also sought a CBI inquiry into the matter besides orders to regulate the functioning of

the DERC.

The court had issued notices to the government and the discoms after the DERC admitted that it does not verify the financial statements furnished by discoms while fixing the power tariff,as the rules did not necessitate it.

The discoms,meanwhile,challenged the PIL arguing that they were private companies,and,hence,not amenable to CAG audit.

Submitting its response to the PIL,the government had said in its affidavit in November that it was open to an “occasional” audit of the discoms’ accounts by the CAG.

“It is submitted that while a routine audit by the CAG every year may not be desirable,given the need to carry the conviction of the general public/ consumers about the authenticity of the claims of the discoms,it may well be desirable to get the occasional CAG audit done,” the affidavit,endorsed by the Power Secretary,had said. The court will now take up the matter on April 12.

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