The Hindu : Business : CAG indicts Maharashtra Government

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Thursday, Jun 10, 2004

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CAG indicts Maharashtra Government

By Our Special Correspondent

MUMBAI, JUNE 9. The Comptroller and Auditor General of India (CAG) has indicted the Maharashtra Government for extending undue benefit to Reliance Patalganga Power Ltd (RPPL), a Reliance group company, by including a clause in an agreement in violation of rules.

The Maharashtra Industrial Development Corporation allotted (June 2000) 5.06 lakh sq. metre of land at Patalganga to RPPL for a proposed power project on the total premium of Rs. 23.34 crores. The corporation received (February 2000) an advance amount of Rs. 4 crores before allotment.

As per Rule 12 of MIDC Disposal of Land Regulations, 1975, the allottee has to pay the balance land premium within 30 days from the date of receipt of allotment letter. In violation of the rule, the allotment letter issued by the corporation wrongly stipulated that the balance premium was payable on the date of taking possession. The possession of the land has not been taken by RPPL so far (September 2003). The CAG observed that had the corporation followed Rule 12, it could have earned interest of Rs. 11 crores on balance premium (Rs. 19.34 crores) for the period July 2000 to September 2003.

The Government while endorsing the views of the corporation stated (August 2003) that the allotment by deferred payment was accepted considering huge outlay in power sector. The fact remains that benefits have been extended to a private commercial firm in violation of the rules, CAG concluded.

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