Hyderabad, March 30: The Comptroller and Auditor General of India (CAG) has faulted the State government for its inaction in cancelling allotment of 1,122.38 acres of land near Visakhapatnam to the Hinduja National Power Corporation Limited (HNPCL), which had failed to set up a power plant.
The CAG questioned why the government did not take back the land in Devada village and allot it to other parties willing to supply power at competitive rates in view of the severe power shortage.
Unutilised land
The prime source of land remained unutilised though there were requests from AP Genco and the NTPC seeking allotment of the same land.
Legal advice ignored
Scrutiny by the CAG revealed that the HNPCL had not paid the full amount pertaining to the land.
The agreement with HNPCL stipulated that financial closure of the project should be achieved within 12 months of the agreement (April 15, 1998) and the project completed within 44 months.
The basic flaw in the terms relating to handing over of the land to HNPCL was that it linked payment of the balance amount with financial closure of the project which never took place as the time limit was not enforced.
The government ignored the legal advice that the contract with HNPCL was no longer subsisting and deemed to have been closed as there was a gross breach of contract.
NTPC request
The CAG recalled the request made by NTPC which had a proven track record of setting up power plants and supply of power at low cost.
The CAG faulted the government’s direction to the Wakf Board to sell land to Hindujas at rates prevailing in 1999 and the Wakf Board accordingly sold the land (April 2008) at old rates for a total consideration of Rs. 47.55 crore, against the market value of Rs. 224.47 crore.
The government’s action in selling the land at older rates without opting for a public auction was inappropriate and was in violation of the provisions of the Wakf Act. Conferring such a benefit was further objectionable as there was no condition stipulating supply of power at rates matching that of AP Genco/NTPC.
–Agencies