E-Paper
Chandigarh: Pending dues, contract lapses, vacant assets drove CTU to ₹5 cr+ losses
The audit observed that the consultancy’s recommendations resulted in undue financial benefit to the contractor and weakened enforcement of SLA provisions
The Chandigarh Transport Undertaking (CTU) lost over ₹5 crore due to financial irregularities, including failure to make recoveries from government departments, underutilisation of commercial assets, and short recoveries from contractors during the financial year 2024-25, an audit by the Comptroller and Auditor General (CAG) revealed.
Waivers recommended sans authorisation
Among the most glaring findings of the report was the role of a consultancy, RINA Consultancy, appointed to monitor the implementation of the intelligent transportation system (ITS).
Auditors found that the consultancy, which was responsible only for monitoring and evaluation of the project, recommended waiver or reduction of penalties imposed under the service-level agreement (SLA) even though it was not authorised to do so. SLA penalties are recommended when the service provider fails to meet agreed-upon metrics like uptime, response times, or delivery milestones.
In one instance (Quarter 11 of 2024), a penalty of ₹63.2 lakh, calculated for service deficiencies, was reduced to just ₹640 based on RINA’s recommendation.
The audit observed that the consultancy’s recommendations resulted in undue financial benefit to the contractor and weakened enforcement of SLA provisions, directly impacting service delivery of ITS modules such as ticketing systems, GPS tracking, passenger information systems and depot management.
Auditors have recommended a comprehensive review of all 13 quarterly reports submitted under the project, as only four were test-checked.
₹1.2 cr short recovery in contract execution
The audit also found that the transport authority had failed to recover nearly ₹1.2 crore from AMNEX, the firm which was awarded the ITS contract. The original contract value of ₹210 crore was later revised to ₹234.1 crore. After 34 buses were condemned, reducing the project scope from 392 to 358 buses, CTU deducted only ₹80.6 lakh from the contractor even though the total recoverable amount – based on the average ITS installation cost of ₹5.9 lakh per bus – was pegged at ₹2.03 crore.
The audit further flagged discrepancies in the procurement of hardware and software, such as components being procured less than the required numbers. Closed-circuit (CCTV) camera installations also did not conform to the prescribed requirement of five cameras per bus. Auditors noted that these discrepancies could indicate excess billing, misallocation or weak verification mechanisms. No response was furnished by CTU to audit queries on this issue.
₹3.7 cr revenue loss due to vacant commercial spaces
The audit also flagged underutilisation of commercial assets. Shops and office spaces at inter-state bus terminus (ISBT), Sector 17, ISBT-43 and the mini bus stand remained vacant for extended periods during 2024-25. These properties are typically leased through auction with provisions of annual rent escalation of 10%, making them a significant revenue source. Due to non-allotment, CTU incurred a potential revenue loss of ₹3.7 crore during the period under review. Auditors have pointed out the absence of timely re-auctioning and lack of proactive asset management as key reasons behind the losses.
₹46.4L pending dues from govt depts
The audit report, assessed by RTI activist RK Garg, also revealed that various government departments and institutions are yet to pay the CTU ₹46.4 lakh against special bookings. The undertaking provides buses on demand and raises bills accordingly, but recovery has been sluggish. As per records scrutinised, ₹3.4 lakh is pending with Depot-I and ₹42.9 lakh with Depot-III as of March 31, 2025. Despite repeated reminders issued by the special booking branch, the dues remain unpaid.
