The CAG also recommended ensuring timely release of subsidy for irrigation systems according to measured consumption. | Photo credit: file photo
The Comptroller and Auditor General of India, who conducted an audit of the Integrated Power Development Scheme (IPDS) in Karnataka, has recommended that the state government ensure that electricity supply companies (Escoms) reduce aggregate technical and commercial (AT&C) losses as per the trajectory set by the Union Ministry of Power (MoP).
The CAG also recommended ensuring timely release of subsidy for irrigation systems according to measured consumption.
The CAG found that while the sanctioned expenditure (including PMA charges of ₹ 6.87 crore) on IPDS was ₹ 1,378.44 crore and the admitted cost was ₹ 1,721.19 crore, the Escoms incurred actual expenditure of ₹ 1,489.33 crore, ₹ 20 crore (as an excess of ₹ 20 crore ₹ 110.89 crore, before the sanctioned cost of implementing the scheme which included additional expenditure to the extent of ₹ 38.52 crores due to non-procurement of materials at central procurement prices as determined by the MoP.
It also pointed out that failure to meet the various requirements for securing additional subsidies resulted in the loss of the opportunity to obtain an additional subsidy of 15% of the project.
Better accounting
At the same time, CAG acknowledged that Hescoms’ billing efficiency generally improved over the program period and contributed to a reduction in billing losses.
The CAG found that while DPRs worth ₹1,138.75 crore were given in-principle approval to all five Escoms in August 2015 and the works were to be commissioned within six months and completed within 24 months, the Escoms took 11 to 27 months to award the works, leading to considerable delays.
The report mentions that Escoms awarded contracts in violation of the law and KTPP rules by providing shorter tendering times ranging from 15 days to 54 days against the stipulated minimum period of 60 days and awarded works with high premiums that exceeded estimated costs by 5% to 34%.
The CAG audit also recommended that the state government can ensure that Escoms can devise a suitable mechanism for timely bidding, start work without delay and ensure completion of work on time to achieve the envisaged targets.
Other Escoms may follow the time frames under the Act and the KTPP rules to ensure adequate competition and allow market discovery for the most economical rates.
Escoms can ensure that comprehensive feasibility studies have been carried out prior to project implementation and can include the conditions of the standard tender documents in the invitation to tender and ensure they are adhered to in the execution of the works, the report said.
Published – 18 Dec 2025 18:24 IST
