Chennai, Sept 10:
Widespread financial mismanagement, tender irregularities and governance lapses in Tamil Nadu’s State Public Sector Enterprises resulted in a financial impact of Rs 3,298.75 crore, according to a Comptroller and Auditor General of India (CAG) report tabled in the Assembly.
The CAG’s Compliance Audit Report on Commercial Enterprises for the year ended March 31, 2023, was tabled in the Tamil Nadu Legislative Assembly on September 8. The report mainly covers the accounts of State Public Sector Enterprises for 2022-23, while also carrying observations relating to earlier years that could not be reported previously.
The report found that 22 public sector undertakings had suffered complete erosion of capital. Their combined net worth was negative at Rs 1,93,132.98 crore against equity capital of Rs 33,263.46 crore. The accumulated losses of 36 government companies had crossed Rs 2.26 lakh crore.
The Tamil Nadu Civil Supplies Corporation (TNCSC) accounted for the largest financial irregularity. The corporation suffered a direct revenue loss of Rs 2,518.55 crore and a shortfall of Rs 218.38 crore in Central subsidy receipts, taking the total financial impact to Rs 2,736.93 crore.
The audit also found that TNCSC had violated Central government directives issued in May 2019 relating to the appointment of transport contractors for paddy and Custom Milled Rice.
The Tamil Nadu Generation and Distribution Corporation (Tangedco) also came under scrutiny. The CAG said the power utility suffered an avoidable revenue loss of Rs 385.53 crore between 2020-21 and 2022-23 because of short-billing of 553 High Tension consumers.
The utility had also recorded consumption for dedicated feeders at the consumer end instead of at the feeding substations. As a result, 592.34 million units of distribution losses were absorbed by the utility instead of being borne by consumers.
Tangedco incurred another avoidable expenditure of Rs 48.94 crore because of delays by its Board-level Tender Committee in finalising a January 2021 tender for AAA Rabbit conductors.
The CAG also pointed to an unfruitful expenditure of Rs 2.99 crore by Tamil Nadu Salt Corporation Limited on a 100-tonne-per-hour salt washery purchased in 2017 without conducting a feasibility study.
The audit examined the financial position of 73 functioning State Public Sector Enterprises. The total State investment in these enterprises stood at Rs 50,131.13 crore. While 37 enterprises recorded a combined profit of Rs 2,060.28 crore, 32 enterprises reported combined losses of Rs 16,045.21 crore.
Tangedco alone reported losses of Rs 9,192.25 crore, while eight State transport undertakings together recorded losses of Rs 6,077.86 crore. Tangedco’s long-term borrowings stood at Rs 1,04,165.16 crore, accounting for 67.85 per cent of the total debt liabilities of the State Public Sector Enterprises.