SHILLONG: The Assembly Committee on Public Undertakings has revealed that the highest amount of losses till 2018 among the 16 working state public sector undertakings (SPSUs) in Meghalaya have been incurred in the power sector followed by the manufacturing sector.
In its report submitted in the Assembly on Thursday, the Committee observed that the accumulated losses in the Power sector till 2018 amounted to more than Rs 1,800 crore, whereas in the manufacturing sector, MCCL alone incurred accumulated losses of nearly Rs 170 crore.
The Committee has suggested the state government to take proactive steps to revamp the working of the SPSUs so as to make them more productive by evolving an effective system of budgetary control by setting quarterly targets for revenue, expenditure and project implementation.
“Those that run the PSUs are not accountable to shareholders since the only shareholder is the government which does not seem to care about losses and it does not have to share profits with the Board of Directors who are supposed to be shareholders of the company,” the report said.
The House panel pointed out that as part of the power sector reforms in the state, the Meghalaya State Electricity Board (MeSEB) was bundled into four companies — Meghalaya Energy Corporation Limited (MeECL), the holding company and its three subsidiaries, Meghalaya Power Generation Corporation Limited (MePGCL), the generation entity; Meghalaya Power Transmission Corporation Limited (MePTCL), the transmission entity; and Meghalaya Power Distribution Corporation Limited (MePDCL), the distribution entity.
According to the performance audit conducted in May-August, 2017, it appears that the subsidiary companies did not have the required administrative and financial autonomy till date to manage their individual revenue and expenditure, the report stated. Also, more than 52 per cent of financial resources of the MeECL and its subsidiaries were utilised for funding loses and only 16 per cent was used to create fixed assets which were essential for revenue generation and future growth, it added.
The Committee also opined that the revenue realised by MePDCL against sale of power was not sufficient to meet even the power purchase cost, mainly due to “poor billing and poor collection efficiency and high power purchase cost”.
On the debts front, the Committee’s findings stated that there was high arrear in paying instalments of debt by MeECL leading to high incidence of additional interest and penal charges. The MeECL had to avail fresh loans for payment of overdue instalments and servicing of debts, which placed the Corporation and its subsidiaries in a “debt-trap position”.
Dwelling on the losses incurred in the Mawmluh Cherra Cement limited (MCCL), which it termed as “burden to the government”, the Committee said that despite the government infusing crores of rupees in the entity to concert the wet process plant to a dry unit, a site visit revealed that the expectation is far from reality.