Lack of financial prudence gripping PSUs: CAG

A report by the country���s statutory auditor has highlighted the financial and managerial irregularities in public sector units after scrutinising 2007-08 books of 419 companies. The Comptroller and Auditor General of India���s (CAG) report was tabled in Parliament on Thursday, which rapped prominent public sector units including navratnas such as Oil & Natural Gas Corp (ONGC), Gail (India), Bharat Heavy Electricals (Bhel) and National Thermal Power Corp (NTPC). The audit has revealed that a total of Rs 916 crore was paid in an irregular manner to the public sector employees on account of ex-gratia and incentives, and companies such as Hindustan Aeronautics, IOC and ONGC had unauthorised incentive schemes.

Irregular payment of incentives by Air India to its to employees has been seen as the reason for the national carrier���s present financial crisis. The report has also found deficiencies in the implementation of technology projects of nine PSUs, including Coal India and ONGC.

The report has also questioned ONGC���s move to refloat a global tender for development of Vasai East Project which, according to the CAG, led to the oil company incurring an extra expenditure of Rs 193.97 crore. The CAG pulled up Bhel for awarding contracts worth over Rs 26 crore to a company banned by the power equipment manufacturer itself from doing businesses with it. In March 2006, a Bhel unit had banned business dealings with a firm for three years as the firm was found to have formed a cartel to bag an order quoting higher prices.

���Notwithstanding such a ban, another unit of the company awarded works on the banned firm at a total price of Rs 26.61 crore in contravention of laid down guidelines and ethical practices,��� the report said.