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The electricity distribution utilities (discoms) in Delhi have moved the High Court challenging the Delhi State Government’s decision to get the Comptroller and Auditor General (CAG) to audit the utilities from the time they were privatised in 2002.
On Wednesday, the discoms – Tata Delhi Power, BSES Rajdhani and BSES Yamuna – filed a writ petition with the Delhi High Court questioning the legality of the proposed CAG Audit, sources told Business Line .
On January 17, the State Government ordered an audit of the discoms by CAG.
Policy reversal This is in complete contrast to the the national auditor’s communication to discoms on October 23, 2002 that the utilities are not Government entities under the Companies Act, 1956 and therefore do not come under its ambit. Delhi privatised electricity distribution in 2002.
Joint ventures The discoms are 51:49 per cent joint ventures between private companies and the State Government.
The CAG Act, under which the audit is sought to be done, does not empower it to audit private companies. Delhi discoms are incorporated under the Companies Act and granted a licence by DERC accordingly.
When contacted a BSES spokesperson told Business Line , “We welcome any independent audit within the purview of law.
But, the CAG’s powers do not extend to discoms. We have already been audited for the past 10 years by CAG empanelled audit firms.”
In addition, Delhi Electricity Regulatory Commission (DERC) has already conducted multiple special audits on the discoms.
According to industry watchers, the Delhi discoms buy a chunk of their electricity from public sector generating stations such as NTPC and NHPC at rates decided by the Central Electricity Regulatory Commission and DERC, respectively.
“These generating stations are themselves subjected to CAG audits. Therefore, the amount spent towards power purchase, which forms around 85 per cent of the total expenses, are already under the CAG’s ambit,” said a power industry official.
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