The Comptroller and Auditor General of India has attributed the non-completion of the 48-MW Lower Kalnai Hydel Power Project in Doda district to “lax supervision and control over the execution of contract” by the Jammu and Kashmir State Power Development Corporation Limited (JKSPDCL).
During the tenure of the National Conference-Congress coalition government, the JKSPDCL awarded the contract on EPC (engineering, procurement and commissioning) to M/s Coastal Projects Limited in September 2013 for completion of work within 48 months. An agreement was signed in April 2014 and work on the project began in June the same year. The government of the erstwhile state had in August 2013 granted approval for the project with an estimated completion cost of Rs 567.87 crore, including escalation during construction.
Nine months later, the PDP-BJP government took over the reigns of Jammu and Kashmir in March 2015, and senior BJP leader and Deputy CM Dr Nirmal Kumar Singh was allocated the portfolios of power and housing and urban development.
According to the CAG report, only 6.39 per cent of work was complete by October 2017 due to execution at a “very slow pace” and the JKSPDCL did not take any action against the contractor, who had failed to finalise the design and engineering activities and accelerate the pace of work.
The Corporation did not agree to the contractor’s request in July 2017 for grant of time to complete the work and decided to terminate the contract, but it did not do so and instead encashed the bank/performance guarantee of Rs 79.20 crore in September the same year.
As a result, work on the project was suspended in October 2017 after incurring an expenditure of Rs 65.68 crore and could not be resumed, according to the report.
The JKSPDCL could not generate the envisaged 219.30 MUs of energy annually valuing Rs 45 crore and had to pay an interest of Rs 17.49 crore during 2015-19 on a term loan of Rs 45 crore for the project, the CAG pointed out.
Despite the encashment of bank/performance guarantee, the JKSPDCL could not recover the Rs 90.40 crore spent on the project and suffered a minimum loss of Rs 11.20 crore, the CAG pointed out.
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