‘Unpaid power purchase bills swell deptt’s liability to whooping Rs 7018 cr’
Gul Owais
Srinagar, Oct 12: The Comptroller and Auditor General (CAG) report has pulled up the Jammu and Kashmir Government for its failure to achieve the target of collection of power tariff from the financial year 2013-14 onwards. The report said that the revenue collected from the power was less than the purchase, thus, creating burden on the exchequer.
The unpaid power purchase bills as per the report, tabled recently for the first time in the Parliament, swelled the department’s liability to whopping Rs 7018 crore.
The report, a copy of which lies with ‘Precious Kashmir’ has revealed that there was a shortfall in the performance of Power Development Department (PDD) as the revenue realized from the sale of power was less than the cost of purchase.
According to the report, in the financial year 2013-14, the cost of power purchase was Rs 4,448 crore while revenue target was Rs 2841 crore. It added that for the said financial year, the revenue realized was just Rs 1533 crore while the amount paid towards purchase of power was Rs 3738 crore.
In the financial year 2014-15, the cost of power purchase was Rs 5207 and the revenue target was Rs 2630 crore. However, the reports revealed that Rs 1428 crore were collected only while Rs 4408 crore were paid for the purchase of power.
The cost of power purchase for the financial year 2015-16 was Rs 5294 crore while revenue target was 2980 crores. It added, the revenue however realized was just Rs 1477 crore while the amount paid towards purchase of power was Rs 6127 crore.
The target for the revenue collection was not even realized in the financial years 2016-17 and 2017-18 as well with report mentioning that the cost for the power purchase in the financial year 2016-17 was Rs 5619 crore while as the revenue target was Rs 4741 crore, but the department realized only Rs 2770 crore revenue and paid Rs 6132 crore for the purchase of power.
In the financial year 2017-18, Rs 5709 was the cost of power purchase and target for revenue collection was set Rs 4841. However, the report stated that Rs 3151 crore were realized as revenue while Rs 3036 were paid for power purchase.
“The targets for the collection of tariff have not been achieved during 2013-14 to 2017-18. During 2017-18, Receipt on account of sale of power purchase was Rs 3,151 crore against the target of Rs 4,841 crore. The revenue realized from sale of power was less than the cost of purchase,” the report said.
It added that the State has set its revenue collection targets lower than the cost of purchase. “This less realization of revenue against the cost of power purchase during respective years was a burden on the State. Difference between cost of purchase of power and actual revenue realized from sale of power is on account of operational inefficiencies and slow implementation of power reforms,” the report said.
The report further mentioned that the state has very high Aggregate Technical & Commercial losses (AT&C) (50 per cent) which is much higher than that of neighbouring State of Himachal Pradesh where AT&C losses are just eight per cent.
It added that during 2017-18, the department purchased power worth Rs 5709 crore against which it paid only Rs 30306 crore to the power producers, thus creating a liability on account of power purchase.
“As on March 2018, the department had liability of Rs 7018 crore on account of unpaid power purchase bills,” it said, adding that the State government is showing revenue surplus of Rs 7595 crore but after taking into account the deferred liability if outstanding power bills amount to Rs 7018 crore, the revenue surplus will be reduced to that extent.
