Faulty tender conditions for Metro project resulted in undue benefit of ₹4.36 crore to contractors, finds CAG

The Comptroller and Auditor General (CAG) of India has pulled up the Maharashtra government for its poor performance in the implementation of Rashtriya Uchchatar Shiksha Abhiyan (RUSA)

The Comptroller and Auditor General (CAG) of India has pulled up the Maharashtra government for its poor performance in the implementation of Rashtriya Uchchatar Shiksha Abhiyan (RUSA). The report for the year ending March 2021, which was tabled in the state legislature on Friday, also pointed to faulty tender conditions for the Metro project in Mumbai leading to an undue benefit of ₹4.36 crore to contractors.

The CAG said faulty tender conditions in three Metro rail contracts of the Mumbai Metropolitan Region Development Authority led to an undue benefit of ₹4.36 crore to contractors. HT File Photo

The CAG report in its findings found that the delay in constituting State Higher Education Council (SHEC), a policy body for higher education, the delay in creation of universities by converting colleges into a cluster, and the low spending on higher education made the implementation of RUSA in Maharashtra ineffective and weak.

“The implementation of RUSA in Maharashtra was fraught with delays and ineffective monitoring... The government decided to participate in its implementation in October 2013. However, SHEC was constituted only in August 2017. As a result, the government could submit the State Higher Education Plan for 2015-17 instead of 2014-17,” the report said.

The CAG said further, the spending on higher education was less than two per cent of Gross State Domestic Product. “There was a delay in the creation of universities by converting colleges into a cluster. The monitoring and evaluation of RUSA was weak, as SHEC has not even finalised key performance indicators to assess the performance of the participating higher educational institutions.”

The report also said that there was a delay by the state in releasing grants received from the Centre. “An audit found that of the ₹376.97 crore (Central and state funds) disbursed by the state government to the State Project Directorate [SPD], there was a delay in disbursement of ₹365.47 crore (97%). Further, of the ₹376.97 crore received by SPD, there was a delay in the disbursement of ₹245.56 crore (56%) to the participating higher educational institutions.’’

The government, in its response to the CAG, attributed the delay in the release of funds to late receipt of funds in the budget distribution system, detailed project report (DPR) clarifications, and late release of funds due to Covid-19.

The CAG said, “Reply is not acceptable as the release of funds in the budget distribution system is the responsibility of the government while the delay attributed to DPR clarifications only indicated lack of detailed scrutiny of DPR before approval.”

The CAG further said faulty tender conditions in three Metro rail contracts of the Mumbai Metropolitan Region Development Authority led to an undue benefit of ₹4.36 crore to contractors.

As per the report, a test check of 17 contracts between January and March 2021 revealed that in three contracts, the tender condition for payment of extra items was in variance with the tender condition in the remaining contracts.

Often, items of work that are not included in the original contract are required to be executed. Such items of work are termed extra items. Since the said extra items were not available on the district schedule of rates of the public works department, rates as per the schedule of the Brihanmumbai Municipal Corporation could be applied.

“An audit found that in one of the three contracts, the percentage of overheads and profit stipulated was 15 while in the other two contracts, it was 8%, which was at variance with the standard conditions stipulated in the Maharashtra public works department manual. Insertion of faulty tender conditions with two different percentages was irregular. This resulted in undue benefit of ₹4.36 crore to contractors in these three contracts between April 2015 and September 2021,” the report said.