Faulty CNG engines for autos: CAG raps KAL

THIRUVANANTHAPURAM: Faulty CNG autorickshaw engines have landed the Kerala Automobiles Ltd (KAL), the government-run autorickshaw company in the district, in the soup. The Comptroller and Auditor General (CAG) has criticised KAL for the purchase of 344 engines at a cost of ` 64.64 lakh and has advised KAL to enter a new business line only after thorough market research regarding product acceptability.KAL, whose main markets are in north India, had decided to go in for Compressed Natural Gas (CNG)-powered engines for three-wheelers following the ban imposed on diesel engines in the National Capital Territory of Delhi in 2004. It entered into an agreement with Lombardini India Pvt Ltd (LIPL) for supply of 344 engines.Three engines were procured on trial basis and they were approved by the Automobile Research Association of India. During 2006-07, orders were placed with LIPL for supply of 344 ‘LGA 340’ engines at a total cost of ` 64.64 lakh which were to be fitted on three-wheelers sold in Delhi. The first lot, however, reported engine problems after their sale. KAL could sell only 89 of the total 230 vehicles produced. The balance engines and vehicles remained unsold.One of the chief lapses the CAG Report for the year-ended March 31, 2011, identified was that LIPL being identified as a single source for the engines. KAL had gone ahead with the purchase despite problems reported in the engines purchased on trial basis."Disregarding this, the company decided (June 2006) to procure 110 engines in the initial phase itself without adequate assessment of their suitability. The company further continued to place orders and procured (November 2006-March 2007) additional 234 engines,’’ the report notes.Efforts by KAL to rectify defects in the engines using upgradation kits procured from LIPL at a cost of Rs 2.25 lakh also did not yield results, the CAG report notes. "We suggest that the company should enter a new business line only after a thorough market research about acceptability of its products,’’ says the report.