Irregular expenditure on hiring helicopters: CAG

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Report faults ‘dubious payments’ made by APACL

The Comptroller and Auditor General (CAG) found fault with the State government for irregular expenditure on hiring helicopters, non-availment of Cenvat credit on service tax, loss of interest, etc. Close to ₹40 crore was the apparent loss to the exchequer, the CAG said in its findings.

The CAG report on Public Sector Undertakings (PSUs) for the year ending March 2016 was tabled in Assembly on Friday.

In the report on PSUs, the CAG exposed the dubious payments the Andhra Pradesh Aviation Corporation Limited (APACL), an arm of the State government, made to the SAS in 2014-15. The CAG also picked several holes in the running of the APACL. The APACL incurred a total expenditure of ₹20.74 crore in 2014-15 for hiring helicopters for VIP use. The government paid ₹14.33 crore to M/s Saras Aviation Services (SAS) “for hiring of helicopter” without proper assessment of the flying hours.

The CAG pointed out that the APACL paid ₹5.06 crore to the SAS for the period July-September 2014 towards utilisation of hired helicopters though the agreement with the service provider was effective from October 2014.

“In the absence of records pertaining to utilisation of hired helicopters, the genuineness of the above payment could not be verified,” the CAG said.

As per clause 12.1 of the agreement effective from October 1, 2014, the minimum guaranteed flying charges were ₹25 lakh for 100 hours per month. However, the APACL paid ₹5.06 crore from October to December 2014 and ₹4.21 crore from January to March 2015 towards flying charges at 60 hours and 50 hours per month respectively.

“After a lapse of nine months from entering the agreement, the company arrived at the requirement of 45-50 hours of average flying. However, no formal amendment was on record in respect of the reduced average flying hours. The agreement was executed without any assessment of the flying hours for which helicopters were to be hired,” the report pointed out.

‘Loss of interest’

The CAG also found fault with the APACL regarding loss of interest due to keeping the funds idle in the current account. Keeping the insurance amount of ₹59.85 crore (secured on the charred AgustaWestland helicopter) in current account had resulted in loss of potential interest revenue of ₹7.18 crore. Non-availment of Cenvat credit on service tax paid to its service providers resulted in loss of ₹17.14 crore, the CAG added.

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