In recent times, almost every big-ticket development project in the country has run into controversy regarding finances; the high-profile Delhi-Gurgaon Expressway was no exception it seems. If all the other issues were not enough, the expressway, as records reveal, was also charged with financial irregularities.
The Comptroller and Auditor General’s (CAG) report in 2008 found lapses on the part of both the National Highways Authority of India (NHAI) and the expressway concessionaire in maintaining financial records of the funds used for the construction of the Delhi-Gurgaon Expressway.
The CAG report mentioned that neither were the escrow account norms followed nor were independent auditors appointed on time to review the books. This seemingly irresponsible lapse in following official procedure exhibits the lack of interest on the part of the authority as well as the concessionaire to check embezzlement of funds, which is quite common in case of such big projects.
Such and other instances of irregularities were further proven when the independent auditors, appointed after a delay of about six years, submitted their financial report for the period from 2002 to 2008.
The auditors observed that there were differences to the tune of Rs. 2.16 crore — both in cash collection and on-board unit collection —in the financial records as well as the software-generated reports. “According to the independent auditors, this has raised a question mark on the accuracy of the traffic report and whether even the revenue sharing had been done properly,” the report states.
The parliamentary committee reviewing the audit report had stated that this matter of inaccuracy in the financial records of the concessionaire “should be properly inquired into and all necessary action may be taken against the concessionaire in case some mischief is detected and penalty may be imposed accordingly”.
According to the CAG, the authority should have an effective monitoring mechanism for ensuring that funds released for a particular project are actually utilised for the project.
This is done through the operation of an escrow account by the concessionaire who is required to forward monthly escrow account reports to the NHAI. However, the copies of the reports were neither submitted by the concessionaire nor were they sought by the highways authority.
But the concessionaire claimed otherwise. “As a concessionaire we have been regularly sending the escrow account statements to the NHAI every month and also whenever they specifically ask for it,” said a spokesperson of expressway operator Delhi-Gurgaon Super Connectivity Limited.
As per the concession agreement, the NHAI also has the right - though not an obligation - to appoint independent auditors at its own cost to audit and verify all matters, expenses, costs, realisations and other assurances. However, the CAG report revealed that the independent auditors were not appointed by the NHAI within the stipulated time though an audit was in its own interest.
The report further said that the NHAI had admitted the lapses on their part and submitted that it had directed the concessionaire of the Delhi-Gurgaon Expressway project to maintain the escrow account in line with the concession agreement.
The NHAI also took a stand that it was not mandatory on their part to appoint independent auditors explaining the delay.