Ministry trips up on fund use

NEW DELHI, April 20: After getting an additional Rs 900 crore from then Finance Minister P. Chidambaram for executing power projects last ye...

NEW DELHI, April 20: After getting an additional Rs 900 crore from then Finance Minister P. Chidambaram for executing power projects last year, the Ministry of Power has had to eat its words. On March 31, it returned exactly half of this, as it was unable to spend the money on the specific projects it was allocated for.

Till last year, top ministry officials kept saying that they could not go ahead with their projects due to an acute shortage of funds. It was due to this, that this additional amount was sanctioned last year, soon after the Budget was presented.

Power Minister R. Kumaramangalam confirmed that the ministry had to return the funds but said that mismanagement by the previous Government was responsible for this. "Apart from the fact that this is something the previous Government is to blame for, I’ve also been told that the money came to the ministry only around January. By then it was too late for the ministry to utilise the funds in the projects by March 31."

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Sources, however, point outthat the funds were sanctioned well in time, around April or May last year. The ministry returned Rs 125 crore sanctioned for the Nathpa-Jhakri hydro-project in Himachal Pradesh, Rs 150 crore for the Tehri project in Uttar Pradesh and Rs 175 crore for the Dulhasti project in Jammu. In all three cases, the funds were returned since little progress was made on the construction schedule.Interestingly, this is the first time in the history of the ministry where such a large amount of money sanctioned as net budgetary support’ has been returned.

The 1500 MW Nathpa-Jhakri project, incidentally, was to have been completed in the current year at a sanctioned cost of Rs 4,337 crore. The latest cost estimates, yet to be cleared by the Cabinet, are around Rs 7,900 crore. While around Rs 3,000 crore have already been spent on the project, the ministry was not able to make use of its additional funds as the revised project costs have yet to be cleared by the Cabinet.

The 390 MW Dulhasti project, similarly, iswitnessing a sharp increase in project costs, from the sanctioned Rs 1,200 crore to around Rs 4,400 crore at present.

Interestingly, while the ministry has cited the Sundarlal Bahuguna’s movement as the reason for the delay, and the non-use of funds, in the Tehri case, the actual reason is quite different. Slightly over a year ago, there was an audit objection raised by the Comptroller and Auditor General on the funding of the project.

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The dam was to be funded by both the Centre and the UP Government in the ratio of 3:1. Since the UP Government has only contributed Rs 250 crore of the Rs 1,500 crore spent on the project till date, the CAG had raised an objection.Since the UP Government has only contributed Rs 250 crore of the Rs 1,500 crore spent on the project till date, the CAG had raised an objection.