CAG slams irrigation department for Rs 5-cr loss | chandigarh | Hindustan Times
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CAG slams irrigation department for Rs 5-cr loss

chandigarh Updated: Feb 27, 2012 14:04 IST
HT Correspondent

The Comptroller and Auditor General (CAG) of India has slammed Haryana irrigation department for what it termed as “irregularities” resulting in a loss of over Rs 5-crore to the state exchequer.

In its report tabled during the ongoing budget session of Haryana Vidhan Sabha, the CAG report said that due to adoption of incorrect wholesale price index of steel, a contractor was paid more than Rs 62 lakh and further, an irregular extension of time given to the contractor caused losses of more than Rs 5 crore.

The report was on the construction of a siphon aqueduct on the Bhakra main line —- Hansi Butana branch multipurpose link channel, crossing the Ghaggar river. Kaithal executive engineer (EE) allotted in January 2007 the work to M/s Backbone Projects Ltd for more than Rs 33 crore. The work had to be completed in 12 months – by December 2007.

The contract prices for increase or decrease in the prices of cement, steel, fuels and lubricants were required to be adjusted as per a formulae given in the contract data, it said. The price adjustment was not applicable for work carried out beyond the stipulated time, including extensions granted, for reasons attributable to the contractor.

For price adjustment of steel, its national average wholesale price index (bars and rods) for the quarter under consideration as published by the government of India was applicable, it said.

Scrutiny of records, however, revealed that after allotment of work to the contractor, the estimate was raised from Rs 33 crore to Rs 48 crore due to modifications suggested by Indian Institute of Technology, Roorkee, in the design and drawings of the siphon.

The contractor could not complete the work before December 31, 2007, and the EE then extended the time limit to May 31, 2008.

The contractor again failed to complete work and the superintending engineer (SE), Kaithal, extended the time limit to December 31, 2008, during which the contractor completed the work and was paid Rs 48 crore in January 2009, which included Rs 1.38 crore on account of price adjustment for steel.

It was further noticed that while calculating the price adjustment for steel, the wholesale price index for iron and steel was taken into account instead of the national average wholesale price index for steel (bars and rods) and against the admissible escalation of Rs 75.89 lakh, escalation of Rs 1.38 crore was paid, thus incorrect adoption of wholesale price index for steel resulted in excess payment of Rs 62.25 lakh to the contractor, the report said.

On this being pointed out on July 27, 2010, the EE, admitting the excess payment, intimated in February 2011 that the engineer in chief, irrigation department had constituted a committee to investigate the excess payment.

The committee also held that the extension in time limit granted beyond May 2008, with the price escalation by the SE, was not in order and seemed to be malafide, the report said. It further consolidated total loss on this work to Rs 5.97 crore for which the EE and SE were held responsible.

Stating that while the cases for the recovery were being processed separately, the matter was referred to financial commissioner and principal secretary, PWD (irrigation branch) in April 2011, the reply was awaited till August 2011, the report held.