NEW DELHI/SHIMLA: A Comptroller and Auditor General (CAG) audit report has uncovered serious deficiencies in disaster preparedness, procurement practices and contract management at NHPC's Teesta-V hydropower project, exposing how poor decision-making and weak management left a strategic national asset vulnerable to disaster and subsequent financial losses over Rs 300 Crore.
The audit report accessed by HimbuMail has raised uncomfortable questions about the functioning of NHPC's top management during the tenure of former Union Power Minister R.K. Singh.
While the former minister routinely championed transparency, efficiency and governance reforms in the power sector, the audit findings reveal a pattern of administrative failures, delayed responses and questionable procurement decisions that ultimately burdened the public exchequer.
The report points to glaring failures in disaster preparedness before the October 2023 catastrophe. Auditors found that critical provisions of the Emergency Action Plan were either inadequately implemented or ineffective when the South Lhonak Glacial Lake Outburst Flood struck the Teesta basin, leading to extensive damage to project infrastructure.
The financial impact of these lapses was substantial. The audit records that NHPC incurred expenditure of more than ₹45 crore towards removal of silt, debris and restoration of damaged hydraulic systems following the disaster, costs that might have been mitigated had adequate safeguards and monitoring mechanisms been in place.
The most serious audit observations relate to the award of restoration contracts worth ₹260.25 crore after the flood disaster.
According to the audit, four restoration packages were awarded on a limited tender basis to Jaiprakash Associates despite the company's precarious financial position and mounting debt burden.
The audit specifically questions NHPC's failure to undertake adequate financial due diligence before awarding the contracts. Auditors noted that mandatory assessments relating to financial capability, liquidity, turnover and execution capacity were either inadequate or absent despite the high value and strategic importance of the restoration works.
The consequences of awarding critical work to a financially stressed contractor were quickly visible. The audit notes delays in procurement, disruptions in mobilisation and slow progress in restoration activities, raising concerns about whether public resources were being managed prudently and in accordance with established procurement norms.
The audit also exposes serious shortcomings in NHPC's tendering process.
In six separate Notices Inviting Tenders (NITs), project authorities rejected 12 bidders solely because they had not submitted offline copies despite having submitted valid online bids through the e-procurement system.
Auditors observed that this reduced competition and was not in the financial interest of the company. The audit further noted that such actions undermined the very objective of e-procurement and restricted the pool of competitive bidders.
The rejection of eligible bidders raises broader concerns about transparency and value for public money. By narrowing competition through restrictive conditions, NHPC potentially deprived itself of more competitive offers and better financial outcomes, according to the audit observations.
The larger issue emerging from the audit is the absence of accountability despite repeated instances of mismanagement.
The report identifies deficiencies in planning, disaster preparedness, procurement and contract administration, yet no senior official has publicly faced responsibility for decisions that resulted in delays, cost overruns and operational setbacks.
The findings have transformed the Teesta-V episode from a natural disaster story into a governance story.
The audit accessed by HimbuMail suggests that the damage was not merely the result of an extreme climatic event but was compounded by institutional failures, weak oversight and questionable decision-making within the country's premier hydropower utility.
The unanswered question now is who will be held accountable for the losses and lapses identified by the national auditor.
Until responsibility is fixed and corrective action taken, the Teesta-V audit will remain a stark example of how public assets, public funds and public trust can be undermined by administrative complacency at the highest levels.
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