ROURKELA: The Comptroller and Auditor General (CAG) in its report published in 2017 has accused the management of Rourkela Steel Plant (RSP) of SAIL for wasteful expenditure to the tune of `22.83 crore with unauthorised power supply to a contract firm.The report said RSP had entered into a gas supply agreement (GSA) with Linde India Limited (LIL) in January, 2009 to set up an Oxygen Plant on Build, Own and Operate basis. It was agreed that RSP would provide free power to LIL from its sub-station till commissioning of Air Separation Units (ASUs) of the Oxygen Plant.
The audit pointed out that RSP had violated Regulations 105 and 106 of Odisha Electricity Regulation Commission (OERC) Distribution (Conditions of Supply) Code 2004 as it was not authorised to sell or transfer power sourced from sub-station. Accordingly, power distribution company WESCO in April, 2014 had issued notice to RSP for immediate disconnection of power to LIL citing it to be a punishable offence. In August 2014, WESCO, RSP and LIL reached a negotiated settlement. However, till commissioning of the first ASU in January 2014, RSP was made to pay differential amount of `10.45 crore as penalty for unauthorised supply of 55 million units to LIL at the rate of `6.90/kwh, while the steel plant was actually entitled to `5/kwh.
Following it, a tripartite agreement among WESCO, RSP and LIL was to be signed by August 21, 2014 to enable LIL to be a direct consumer of WESCO. But, the agreement signing was delayed till July 20, 2015 and RSP again had to pay a penalty of `12.38 crore as demand charges. The CAG report also rejected the reply of SAIL management/Ministry of Steel as unacceptable pointing out that after becoming direct consumer in July 2015, LIL was charged between `4.00 and `5.05 per unit depending on load factor and not `6.90 per unit.
In its defence, the SAIL management had subsequently claimed that `13.34 crore was recovered from LIL which is higher than penalty amount of `12.38 crore. But the CAG report pointed out that `13.34 crore recovered from LIL for its consumption was for the period of January, 2014 to June, 2015 while RSP had to pay additional penalty of `12.38 crore from July to November, 2015. The report said the expenditures were avoidable had RSP not violated OERC norms and concluded that deficiency in GSA attributable to lapses on part of RSP management resulted in avoidable expenditure of `22.83 crore.