Railways allege state transmission authorities delayed power purchase under open access in 2017: CAG

West Central Railways incurred extra expenditure of Rs 75.10 crore during the period from March 15, 2016 to January 10, 2017

By Seema Prasad
Published: Monday 26 December 2022
The West Central Railways accuses state transmission utilities of delaying power purchase via open access in 2017: CAG report
Photo: iStock Photo: iStock

The West Central Railways (WCR) accused state transmission utilities of delaying their power purchase under the open access route to retain the Union Ministry of Railways as a client, according to a compliance audit of the ministry issued by the Comptroller and Auditor General (CAG) of India on December 21, 2022. 

In 2014, the Union Ministry of Railways was given the deemed licensee status to buy electricity directly from generating companies under the open access channel, which allows bulk users to buy power at cheaper rates.

Accordingly, in 2015, instructions were issued to all Zonal Railways to buy their own power. This was to be done with the provision of Availability-Based Tariff meters (ABT) simultaneously, which are essential to measure the frequency and prices of power discharge to maintain grid discipline. 

In March 2016, WCR signed an agreement with Jindal India Thermal Power Ltd (JITPL) for power procurement after a successful bid. The power allocated to WCR under the agreement was 55 megawatts. 

However, the CAG report observed a delay of 10 months before the power supply commenced in four traction sub-stations (TSS) through Open Access from JITPL on January 10, 2017. A delay of more than a year was observed at the other eight stations when operations began in April 2017. 

This lag in starting operations resulted in the Union Ministry of Railways buying power at a higher rate of Rs 6.50 per kilowatt-hour, despite the availability of power at a lower rate of Rs 4.09 per kWh. Therefore, the failure to materialise the contract added an extra expenditure of Rs 75.10 crore during the period from March 15, 2016 to January 10, 2017, the CAG report noted. 

When questioned on the matter, the railways ministry stated in its response on June 2022:

The provision of ABT meters and current transformer / potential transformer for open access could not have been achieved without the consent of state transmission utilities (STU), who initially lingered in the matter for want of eligibility of railway as ‘Open Access’ customer as ‘Deemed Licensee’.

“As soon as confirmation was issued by the Central Electricity Regulatory Commission (CERC) on November 5, 2015, WCR made all possible efforts for availing power through open access. And since STUs were going to lose their valuable customers (the Indian Railways), they tried to create obstacles to clear open access to the railway.”

WCR also argued that after the signing of the power procurement agreement with JITPL on March 15, 2016, the railway administration immediately started the process of getting ABT meters, the CAG report said.

Nevertheless, according to the audit, this was not the case. The audit found WCR had not started the procurement of the "much-required ABT meters" after entering into the agreement and "the contention regarding ambiguity about the ‘Deemed Licensee’ status of the railway was also not acceptable".

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