The Hindu Business Line : CAG finds fault with working of TTP

Thiruvananthapuram, Feb. 26 The state-owned Travancore Titanium Products Ltd (TTP) has suffered heavy loss due to indiscriminate production without taking into account the marketability, according to a report by the Comptroller and Auditor General of India (CAG).

The CAG report for the year ended March 31, 2007, which was tabled in the State Assembly on Tuesday, said that this resulted in the accumulation of stock and exports at reduced rates.

There was a fall in domestic sales due to fixing higher prices at an inappropriate time. Also, the company did not have a dependable costing system. The norms fixed for the consumption of materials were high and were counter-productive to consumption, the report said.

Material consumption was excessive when compared to actual optimum levels achieved earlier. Besides, the consumption of fuel was not optimised through planned production.

The report pointed out that the minimum off-take by the stockists was not ensured by the incorporation of enabling provisions in the agreement with them. The setting up of a mineral separation plant for recovery of the raw material, ilmenite, was not taken up as recommended by the Committee on Public Undertakings.

The report also came down on the company for incurring heavy expenditure on the wages of surplus staff. Moreover, an unjustified production incentive system and the payment of overtime despite surplus staff contributed to the high production cost.

TRKL joint venture

The CAG report also picked holes in the joint venture agreement between Tourist Resorts (Kerala ) Ltd. (TRKL) and the Taj Group. The agreement was entered into for forming the joint venture without inviting expression of interest from leading hotel groups or ascertaining the best offer.

The joint venture agreement did not safeguard the financial interest of the State Government/TRKL and despite huge investments and the transfer of assets, adequate control and participation in the management of the proposed venture was not ensured. The joint venture partner had absolute control over the company and took away a major share of the revenue by way of operating fee and reimbursement of expenses.

On its part, TRKL could not verify the genuineness of the transactions in the absence of control over the affairs of the joint venture company. The Government investment in the joint venture had not yielded any return for the last 15 years, the report said.

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