CAG finds ₹400 crore spent on unnecessary cement grouting in UP power schemes

Who it concerns: Government of Uttar Pradesh, Uttar Pradesh Power Corporation Limited (UPPCL), and four State Electricity Distribution Companies (DISCOMs).

What the auditor found

• Failure to convert loans to grants: DISCOMs lost the benefit of converting ₹2,002.61 crore in loans into grants due to delays and unmet targets.
• Avoidable expenditure on PCC poles: Unnecessary cement concrete grouting of PCC poles resulted in avoidable costs of ₹125.35 crore (DDUGJY) and ₹277.09 crore (SAUBHAGYA).
• Excess payments to Third-Party Contractors (TKCs): Duplicate connections and inadmissible claims led to excess payments totaling ₹26.65 crore for duplicate connections, ₹3.37 crore for electrical safety inspections, and ₹1.09 crore for sag/jumpering.
• Interest overpayments: Avoidable interest obligations of ₹3.94 crore due to excess loans and overpayment of ₹7.19 crore to REC due to incorrect rate verification.
• GST/Tax discrepancies: Excess claims of ₹1.09 crore (CGST) and ₹1.81 crore (SGST) by PVVNL, and unclaimed state tax reimbursement of ₹4.21 crore.
• Unachieved feeder separation: 71.22% of agricultural consumers remained connected to non-agriculture feeders in sampled districts.
• Recommendations: CAG recommended accurate tax claims, assessment of loan requirements, effective monitoring of TKCs to prevent duplicates, and regular SLSC/DISHA meetings.

Also in the document

• CAG found that avoidable expenditure on unnecessary cement concrete grouting for PCC poles amounted to over ₹400 crore combined across both schemes.
• CAG reported that DISCOMs were unable to avail the benefit of converting ₹2,002.61 crore of loans into grants due to execution delays and failure to meet loss reduction targets.
• CAG noted that the core objective of separating agriculture and non-agriculture feeders was largely unachieved, with 71.22% of agricultural consumers still on non-agriculture feeders in sampled areas.