65 per cent cost escalation in CWG Village project: CVC | delhi | Hindustan Times
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65 per cent cost escalation in CWG Village project: CVC

The CVC has found several discrepancies in a DDA project for construction of certain facilities in the Commonwealth Games Village that led to a cost escalation from Rs 38 crore to over Rs 63 crore.

delhi Updated: Nov 14, 2010 11:49 IST

The CVC has found several discrepancies in a DDA project for construction of certain facilities in the Commonwealth Games Village that led to a cost escalation from Rs 38 crore to over Rs 63 crore.

According to an internal investigation report, the CVC's Chief Technical Examination Wing has also said that the construction company has flouted government norms related to testing, purchase and security.

As part of its different development projects, the work for construction of swimming pool, training hall, fitness centre and athletic track in the Village spread over 63.5 hectares area was given to Sportina Payce Infrastructure Private Limited, a consortium of four companies especially created for the job, by the Delhi Development Authority.

"Sportina Payce Infrastructure Pvt Ltd was the lowest tenderer with their quoted amount of Rs 64.86 crore which was 67.39% above the estimated cost of Rs 38.76 crore... Negotiations were conducted with the agency and and the agency reduced their quoted amount to Rs 63,09,67,855 which was 62.77% above the estimated cost and 11.79% above the justified amount of Rs 56.44 crore.

"As per CPWD manual which is being followed by the DDA the work can be awarded up to 10% above the justified cost. Work Advisory Board decided to place the matter before the Hon'ble LG for acceptance... and work was awarded to Sportina Payce Infrastructure Pvt Ltd at their negotiated amount of Rs 63,09,67,855," the report, which was received in reply to an RTI query filed by PTI, said.

According to the finding, an application was submitted by a consortium of Payce Consolidated Ltd and Paynter Dixon Construction Pvt Ltd, Australia, Sportina Exim Pvt Ltd, Mumbai and Robertson + Marks Architect Pvt Ltd, Australia.

"As per the agreement to establish a consortium, the consortium members agreed to incorporate a limited liability company i.e. a Special Purpose Vehicle Company (SPV) in the name and style of Sportina Payce Construction (India) Pvt Ltd...

"But at the time of submitting the tender, a company was formed as Sportina Payce Infrastructure Pvt Ltd which submitted the tender and became L1 and finally work was awarded to them," it said.

"In this company other partners except Sportina Exim Pvt were not represented at all. Ultimately at site only Sportina Exim Pvt Ltd was executing the work which does not have expertise, experience which was considered at the time of Pre Qualification. Thus undue favour has been shown to agency," the anti-corruption watchdog noticed in its report.

"Certain discrepancies were observed in the justification of rates prepared during award of work which resulted into higher justified cost," the report read.

Pointing out the irregularities, it said that labour charges for fixing tiles and calculations of Value Added Tax (VAT) was calculated twice.

The contractor also did not furnish workmen's compensation policy which was a mandatory requirement to insure at his cost and expense against any damage or loss or injury which may be caused to any person or property at site of work, the report said.

At the time of inspection, the CVC officials noticed that payments were being made without testing of cement concrete cubes was not being done for seven days strength which gives the idea of tentative strength of the concrete.

The findings are the part of one of the 16 different Commonwealth Games-related construction works being carried out by various departments in New Delhi.

Six of them are being done by Public Works Department (PWD), three by Municipal Corporation of Delhi (MCD), two each by Central Public Works Department (CPWD), DDA, New Delhi Municipal Council (NDMC) and one by RITES, a Government of India Enterprise.

Prime Minister Manmohan Singh has also appointed a high level committee under the chairmanship of former Comptroller and Auditor General V K Shunglu to investigate and report within three months time its finding on irregularities in the conduct of the mega sporting event held in New Delhi between October 3-14.

Besides Enforcement Directorate, Income Tax Department and CAG are also conducting enquiries into various alleged financial and administrative lacunae.