CHENNAI: Tamil Nadu’s power utility imported poor quality coalduring 2012-16, resulting in excess payment of Rs 813.68 crore, the Comptroller and Auditor General has found, recommending an investigation. The audit also found that the Tamil Nadu Generation and Distribution Corporation (Tangedco) released Rs 5,767.13 crore to supplier of 60% of the coal consignments without obtaining a mandatory Certificate of Country of Origin (COO), a violation of its own tender conditions.

The COO, to be furnished by the government of the exporter, is a marker of the genuine-ness of the source of import.

The CAG report, tabled in the last assembly session, hints at a planned conspiracy first identified by the Directorate of Revenue Intelligence in March 2016. “Imported coal’s procurement price was inflated by power generating companies and traders who supplied the coal to avail higher tariff compensation based on artificially inflated cost of coal,” it had said in a circular. Tangedco was one of the companies under DRI scanner. 

The consignments which CAG said were without COO were from Indonesia, country of origin of coal imports in the DRI letter.

As per tender conditions, CAG said, the Gross Calorific Value (GCV) of imported coal was to be 6,000 Kcal/Kg. Price was to be adjusted according to a formula if GCV went below 6,000.

Unlike PSUs like TNPL and NTECL, which select an empanelled agency through a lot system and collect coal samples from the automatic coal sampler on their plants before deciding on the quality based on in-house tests, Tangedco depended only on third party testing agencies for collection of samples as well as testing at its labs too. “This deficiency led to variation of only one percent in the GCV reported by the agencies,” CAG said.

When verified independently at customs department labs (for 121 Tangedco consignments), the GCV was found lesser than that of discharge port laboratory test reports submitted by suppliers, CAG said. This led to an excess payment of Rs 813.68 crore,” it said, pointing out that customs test results were legal evidence.

While K Gnandesikan, CMD during 2012-2014, said Customs test reports were not valid as they are not specified in tender conditions and that couldn’s remenber details on lack of COO, M Saikumar, CMD from 2014-2018 and currently principal secretary to chief minister, did not respond to calls.