Business Standard reported that the Uttarakhand Power Corporation Limited,the sole power distribution company in the hill state,has been criticized by the Comptroller and Auditor General for its huge accumulated losses of INR 1,960.11 crore,which in turn eroded its entire capital and reserves by 2010-11.
CAG said that"Its accumulated losses increased YaY and the entire capital including reserves was eroded by 2010-11."The CAG also censured the UPCL for failing to take adequate and effective measures for recovery of outstanding dues.
The CAG said that accumulated losses of the company increased by INR 1,343.84 crore from INR 616.27 crore in 2006-07 to INR 1,960.11 crore in 2010-11.
Current liabilities and provisions increased from INR 1,793.38 crore during 2006-07 to INR 3,135.38 crore in 2010-11.
It said that the sundry debtors of the company increased by INR 611.38 crore i.e.from INR 1,205.37 crore in 2006-07 to INR 1,816.75 crore in 2010-11 due to poor collection efficiency.
The cost of purchase of power increased from INR 742.92 crore in 2006-07 to INR 2,077.67 crore in 2010-11,as the company had to purchase power during peak hours at higher rates in excess of tariff rate fixed by the Uttarakhand Electricity Regulatory Commission.
Interest and finance charges of the company increased from INR 53.48 crore to INR 84.97 crore during 2006-07 to 2010-11 due to interest paid against the loan taken from Power Finance Corporation.
The CAG added that the government did not provide any subsidy support to the company during 2006-11.According to the government's order,the company waived off INR 16.83 crore on account of late payment surcharge in respect of defaulting private tube wells and domestic category consumers in Haridwar district but the government failed to make any payment.
