Assam: Report (Commercial) for the year ended 31 March 2001: CAG

As on 31 March 2001, the state had 42 Public Sector Undertakings (PSUs) comprising of 38 government companies (28 working companies and 10 non-working companies) and 4 statutory corporations, which was the same last year also. The total investment in working PSUs increased from Rs.3569.17 crore as on 31 March 2000 to Rs.3649.37 crore as on 31 March 2001. The total investment in non-working PSUs also increased from Rs.80.75 crore to Rs.82.44 crore during the same period.

1. General overview of Government companies and Statutory corporations

• The budgetary support in the form of capital, loans and grants disbursed to the working PSUs increased from Rs.91.76 crore in 1999-2000 to Rs.117.12 crore in 2000-2001. The state government also contributed Rs.0.29 crore in the form of loan to one non-working company during 2000-2001. The state government guaranteed loans aggregating to Rs.19.24 crore, to one working government company during 2000-2001.
  
• The total amount of outstanding loans guaranteed by the state government decreased from Rs. 930.54 crore as on 31 March 2000 to Rs.912.93 crore as on 31 March 2001.
  
• None of the 42 PSUs have finalised their accounts for the year 2000-01. The accounts of all the 38 companies and 4 statutory corporations were in arrears ranging from one year to 18 years as on 30 September 2001.
  
• According to latest finalised accounts, 3 working PSUs (3 government companies) earned aggregate profit of Rs.5.09 crore. Against this, 28 working PSUs (24 government companies and 4 statutory corporations) incurred aggregate loss of Rs.599.28 crore as per latest finalised accounts. Of the loss incurring working government companies, 10 companies had accumulated losses aggregating Rs.114.21 crore, which exceeded their paid up capital of Rs.50.15 crore by more than 2 times. 3 loss incurring statutory corporation had accumulated losses of Rs.2678.55 crore, which exceeded their paid up capital of Rs.1530.41 crore by more than 1.75 times.
  
• In Assam State Electricity Board, the percentage of transmission and distribution loss to total power available had increased from 38.12 per cent in 1998-99 to 38.80 per cent in 2000-2001 and the Plant Load Factor had decreased from 19.125 per cent to 18.58 per cent during the same period. Similarly, in Assam State Transport Corporation, the loss per kilometer increased from Rs.13.57 in 1998-99 to Rs.17.90 in 2000-2001.
  
• Even after completion of five years of their existence, the individual turnover of 19 government companies (working 15, non-working 4) and one statutory corporation has been less than Rs.5 crore in each of the preceding five years of latest finalised accounts. Similarly 4 government companies (3 working, one non-working) had been incurring losses for five consecutive years as per their latest finalised accounts leading to negative net worth. These companies are recommended for closure.

2. Reviews relating to Government companies
2A Review on the working of Assam Livestock and Poultry Corporation Limited

• The company was set up in 1984 to undertake development of livestock and poultry trade and to improve socio-economic conditions of livestock and poultry breeders in the state. The company undertook execution of 7 projects (4 meat processing plants, 2 carcass utilisation plants and one slaughterhouse) in 1992. Although Government of India contributed its share towards the cost of the projects the company is yet to receive any fund from the state government. None of the projects have been completed so far. The company is neither left with any capital fund nor it has formulated any plan to mobilise fund for completion of the projects.
  
• The company unauthorisedly diverted and utilised an amount of Rs.3.49 crore, being fund received for implementation of government sponsored Milk Village scheme, in construction of projects (Rs.0.33 crore) and working capital (Rs.3.16 crore).
  
• The company could not complete the civil works for processing plants at Khanapara (Guwahati) in time which resulted in extra expenditure of Rs.1.02 crore and the company had to forgo projected revenue to the tune of Rs.1.75 crore.
  
• The company procured machinery before completion of civil works which resulted in locking up of fund amounting to Rs.1.18 crore and loss of interest thereon amounting to Rs.0.78 crore,
  
• The company utilised Rs.0.62 crore in construction of two projects, whereas it furnished utilisation certificate for Rs.1.00 crore to the Government of India.
  
• The company leased out Mini Processing Plants costing Rs.0.59 crore and realised a negligible rental of Rs.6000 over a period of five years which rendered the investment infructuous.

2B Review on the working and performance of Assam Agro-Industries Development Corporation Limited

• The company was set up in January 1967 with the main objective of helping the growth and modernisation of agriculture by assisting farmers to own the means of modernising their cultivation, by undertaking efficient distribution of agricultural inputs, machinery, implements, fertilisers, by setting up workshops for manufacturing farm machinery and agro based industries. However, the company failed to meet its objectives as the company had so far been mainly carrying on trading activities and for that too it is dependent on Government orders.
  
• The accumulated loss of the company stood at Rs.15.06 crore as on 31 March 2000 which was 685 per cent of its paid up capital indicating absolute erosion of paid up capital.
  
• The actual production of company?s workshop vis-?-vis target declined from 78.89 per cent in 1995-96 to 8.95 per cent in 1999-2000 and value of production per rupee of salary & wages also declined from Rs.3.11 in 1995-96 to Rs.1.70 in 1999-2000.
  
• The sales realisation per rupee of employees? cost decreased from Rs.17.80 in 1995-96 to Rs.4.99 in 1999-2000 indicating that the company is overstaffed.

3. Review relating to Statutory Corporation
Review on the operational performance of Lakwa Thermal Power Station

• The gas based Lakwa Thermal Power Station (LTPS) of Assam State Electricity Board (ASEB) has an installed power generation capacity of 120 MW comprising 4 units of 15 MW capacity each and 3 units of 20 MW capacity each. Of these, 4 units of 15 MW capacity each, were commissioned between April 1981 and November 1986 and another 3 units of 20 MW each were commissioned between January 1994 and May 1999.
  
• The Board also set up 3 units of 2.70 MW each Mobile Gas Turbine (MGT) units at Geleky and 4 units of 2.705 MW each at kathalguri in March 1981 and April 1982 respectively.
  
• The shortfall in generation due to low PLF during 1995-96 to 1999-2000 had compelled the Board to purchase more power from other agencies. The Board failed to control and monitor the excess consumption of fuel and auxiliary consumption of power over the prescribed norms. Inadequate linkage of gas led to frequent shutdown of units and loss of potential generation.
  
• None of the generating units could achieve the Standard Plant Load Factor in any of the years during 1995-96 to 1999-2000. Lower PLF compared to the standard resulted in loss of generation of 1631.55 MU increasing the unit cost of generation by 35 to 46 paise.
  
• Prolonged shut down of Unit-IV (15 MW) from 31 January 1990 resulted in capital investment of Rs.17.44 crore remaining idle for more than 11 years and loss of potential generation of 269.12 MU during 1995-96 to 1999-2000.
  
• Inadequate linkage of gas resulted in forced outage of 43118.98 hours and consequential loss of generation of 736.18 MU valued at Rs.187.51 crore.
  
• Low thermal efficiency of generating units resulted in excess consumption of 102.71 million standard cubic meter of gas valued at Rs.9.43 crore.
  
• Failure of the Board to either dispose of 7 Mobile Gas Turbine units or repair and restore the same resulted in capital investment of Rs.15.46 crore remaining idle from April 1997.

4. Miscellaneous topics of interest

• Assam Seeds Corporation Limited procured seeds in excess of its requirement/demand and failed to sell them within the validity period of germination which resulted in loss of Rs.0.32 crore.
  
• Assam Industrial Development Corporation Limited incurred an expenditure of Rs.0.22 crore on a building project without considering its financial viability which led to abandonment of the work rendering the investment as unfruitful.
  
• Assam Plains Tribes Development Corporation Limited diverted plan fund of Rs.0.49 crore towards staff salary not provided in the scheme.
  
• Assam Plains Tribes Development Corporation Limited purchased power tillers from parties other than manufacturer?s dealer which resulted in avoidable expenditure of Rs.0.08 crore.
  
• Execution of defective Memorandum of Understanding (MoU) by Assam State Electricity Board (ASEB) resulted in avoidable expenditure of Rs.1.23 crore.
  
• Lack of timely action by the Board resulted in accumulated arrear energy charges of Rs.3.36 crore becoming unrealisble.
  
• Arbitrary reduction/waiver of penalty by the Board and irregular relaxation of period for calculation of compensation resulted in undue benefit of Rs.4.36 crore to two industrial consumers.
  
• Assam Financial Corporation lost interest income of Rs.0.25 crore for granting liberal waiver to two undeserving loanees.