The Comptroller and Auditor General has pointed out that not constructing reverse turbines on the weir across the Krishna river, which was to be part of the Srisailam left bank canal project, has cost the state Rs 1,275 crore between 2002 and 2006. The reverse turbines would have allowed water to be re-used for power generation, ensuring the generation of another 900 MW even during low flow and summer months. The weir project could not be completed because APGenco did not take prior permission of the forest and other related departments. This resulted in an increased cost of power totalling Rs 1,500 crore, which Genco proposed passing on to the consumer.
The AP Electricity Regulatory Commission objected to passing on the burden to the consumer for assets that were not gainfully employed. It approved only Rs 225 crore to be passed on to the consumer. The CAG pointed out that the the failure of Genco to obtain statutory prior permissions for utilising forest land for construction of the weir led to the payment of a compounding fee of Rs 1,275 crore as well as a possible loss of 900 MW of power.
“APERC observed that the consumer should pay only for the assets that are gainfully employed in the business. As a result, the total loss of charges, which were not allowed by the APERC due to non-construction of the weir amount to Rs 1,275 crore. Once the weir is completed, water impounded by the weir will be made available as additional peak power, especially during low flow season. Peak power of 900 MW will be available for the southern grid once the pump mode operation is established,” said Genco in its reply to the CAG.
Moreover, even the SC had imposed a penalty of Rs 1 crore and a compounding fee of Rs 0.49 crore on Genco. However, the Public Undertakings Committee, in a meeting held on Wednesday, decided to do away with the penalty after considering the explanation of Genco that it failed to obtain clearances for the weir as prior clearances were obtained for the entire project due to which the officials were under the impression that separate clearances would not be required.