Companies

CAG pulls up BHEL for delays in capacity addition

PTI New Delhi | Updated on February 17, 2014 Published on February 17, 2014

The Government auditor CAG today pulled up the state-owned BHEL for delays in augmenting the equipment manufacturing capacity, needed for supporting the expansion of power sector.

“While CEA (Central Electricity Authority) identified power generation capacity addition requirements of 67,439 MW for XIth plan period (2007-12) in the country in November 2003 itself, BHEL completed the first phase of its capacity addition programme in March 2011,” the Comptroller and Auditor General of India (CAG) said in its report tabled in Parliament.

Thus, the manufacturing capacity expansion, which was required to be planned and completed in the initial years of the XIth plan was declared to have been completed by BHEL only towards the end of the plan, it said.

“Implementation of the capacity expansion programmes for the XI and XIIth Plans disclosed delays between seven months and 62 months in 17 selected schemes out of 22 schemes approved in 2007-12,” the CAG said in the report.

In addition to some uncontrollable factors, it said, delays due to reasons like non-fixation of targets for vendors to erect and commission machines, replacement of damaged equipment and delays in pre-ordering activities could have been minimised through improvements in market research, planning and monitoring.

“Existing installed manufacturing capacity for turbines, generators and boilers during 2007-11 remained largely under-utilised,” the report added.

There was considerable scope for improved utilisation.

Though capacity utilisation picked up during 2011-12, there is a need to maintain and further improve it in order to achieve the benefits of ongoing capacity augmentation.

Further, the audit observed delay in delivery of equipments ranging between 7 and 68 months in 126 out of 151 sets delivered by BHEL to its customers during 2007-12.

The CAG audit report examined the adequacy and results of efforts of BHEL from conceptualisation to execution of manufacturing capacity expansion and its utilisation during 2007-12.

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Published on February 17, 2014
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