Military establishments paid `32 cr extra to MSEDCL: CAG

Mubarak Ansari
Monday, 24 July 2017

The CAG audit reports have recurrently reported over-payments made by Garrison Engineers (GEs) to the State Electricity Supply Agency (SESA).  

Pune: The Comptroller & Auditor General (CAG) has pulled up Pune-based military establishments, especially hospitals and educational institutions, for paying crores in excess to Maharashtra State Electricity Distribution Company (MSEDCL) for electricity.

The MSEDCL had been billing them at commercial and other rates instead of the public services/military category rates. The CAG audit reports have recurrently reported over-payments made by Garrison Engineers (GEs) to the State Electricity Supply Agency (SESA).  

New tariffs ignored
According to CAG, in August 2012, MSEDCL had introduced a new tariff for consumers providing public services, including defence establishments. MSEDCL further introduced separate tariff in June 2015 for government educational institutes and hospitals and other defence establishments falling under the category of public services. 

However, seven GEs, who received electricity in bulk from MSEDCL for supply to defence educational institutes, hospitals and others, failed to exercise checks on the correctness of tariff applied before making payment to MSEDCL, resulting in excess payment of Rs 32.13 crore. GEs are responsible to enforce pre-check on the electricity bills before payments.

MoD’s action
In its action taken note (ATN) of August 2006, the Ministry of Defence (MoD) had stated that instructions had been issued to all the concerned staffers to scrutinise electricity bills thoroughly before making payments to the SESA in the future. In another ATN (July 2014), MoD had hinted at disciplinary action against erring  officials. 

“The audit, however, revealed that seven GEs made excess payment of Rs 32.13 crore towards electricity charges due to incorrect application of tariff,” the apex audit body stated.

Fixed criteria
In reply to CAG, Chief Engineer, Pune Zone (CE PZ), Pune, in November 2016, stated that military hospital (MH) is not defined under the category ‘public services government hospitals’ and provides services to military troops only. 

It was also stated that MSEDCL recognises only one tariff category for defence establishments and they are unwilling to give any further concession stating that the criteria had already been fixed for defence establishments. CE PZ, however, stated that they were continuing to put pressure on MSEDCL to offer further benefit by changing tariff category, wherever feasible.

CAG unhappy
However, the CAG trashed this reply. “It is not tenable, as the tariff as per the MSEDCL order of recategorisation of its consumers made in June 2015, is equally applicable to all Central government educational institutes and hospitals and as all the MHs and defence educational institutes are functioning under the MoD, which comes under the Central government, the tariff category is also applicable to all these consumers,” the CAG said. The case has been referred to the Ministry, which is yet to reply to the CAG. 

How military establishments goofed up payments
Medical establishments
    GE (South) Pune receives electricity from MSEDCL and further supplies to Command Hospital, Military Hospital, Cardio Thoracic Centre (MH CTC) and Armed Forces Medical College (AFMC) through separate connections. 
    Audit scrutiny (March 2016) revealed that MSEDCL had been billing CH and AFMC at the rate applicable to ‘commercial’ category from September 2012 onwards. 
    In respect of MH CTC and MH Khadki, the rate applied by MSEDCL from June 2015 was at rates other than the applicable category for government hospitals and educational Institutes. 
    Thus, both the GEs had made payments without verifying the correctness of the rate applied by MSEDCL.
    On being pointed out (March 2016) in audit, GE(S) took up the matter with MSEDCL, who agreed to carry out site verification.
    GE (MH), Khadki stated (March 2016) that MSEDCL was being approached to get the refund. 
    EXCESS PAYMENT: This resulted in excess payment of Rs 13.02 crore at GE(S) and Rs 1.19 crore at GE (MH) Khadki up to November 2016, by when the issue had not been finalised.

Educational Institutes
    Audit examined the case at two other GEs, which supply electricity to educational institutes viz National Defence Academy (NDA), Khadakwasla and Defence Institute of Advanced Technology (DIAT), a deemed University. 
    NDA, Khadakwasla, receives electricity, including for its residential area, from GE (NDA) through single connection. 
    65 per cent of the consumption was billed at residential rate. However, the balance 35 per cent was billed at other than the applicable category for government hospitals and educational institutes. 
    GE (R&D), Girinagar, caters to electricity supply of DIAT, including its residential area. Audit noticed that the electricity consumed by DIAT for educational purpose was billed at commercial rate.
    EXCESS PAYMENT: For NDA, Rs 1.17 crore from June 2015 to November 2016 and for DIAT, Rs 2.03 crore. 

Other establishments
    Audit also noticed that four GEs who supply electricity to various defence establishments other than educational institutes/hospitals, paid electricity bills under ‘commercial’ category.
 Excess payment Rs 14.72 crore till November 2016.

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