November, 2011 – The Comptroller and Auditor General of India (CAG)

Poompuhar Shipping Corporation, owned by the Tamil Nadu government, has incurred Rs 56.37 crore of additional expenditure due to delay in purchase of spares and incorrect selection of shipping yard. The Corporation transports coal required by the thermal power stations of Tamil Nadu Electricity Board (TNEB) The Comptroller and Auditor General of India (CAG) has stated that the Corporation has incurred an avoidable expenditure of Rs 56.37 crore due to a delay in the purchase of spares, incorrect selection of shipping yard, nonrectification of the problems in cranes and turbo engines and delay in finalising the dry dock yard. While inviting and evaluating tenders for spot chartering of the vessels, the company deviated from the tender rules, terms and conditions, allowed unwarranted extensions at higher rates of charter hire charges and did not levy liquidated damages for the delays in delivery of the vessels. These factors contributed to an avoidable extra expenditure of Rs 26.76 crore, the report said.