Even as the ambitious Ganga Path project, along the river Ganga from Digha to Deedarganj, is still in the construction stage having missed several deadlines in the last few years, the Comptroller and Auditor General (CAG) in its audit report has now rapped the Bihar State Road Development Corporation (BSRDCL) for paying avoidable interest on loans without taking into account the “availability of funds” and “slow progress of work”.
The project faces cost escalation due to several missed deadlines. In its report, the audit body has said that the BSDRCL made avoidable payment of interest of ₹37.75 crore by the unnecessary withdrawal of loan worth ₹193 crore from Housing and Urban Development Corporation (HUDCO) in the period 2013-18 and later refunded the loan amount.
The project has now got a new deadline of December 2022 with work of approach roads connecting various points at Ashok Rajpath still going on. The 23.50-kilometre-long road from Digfha to Deedarganj along the river, with an elevated portion for several kilometres, is aimed at easing traffic congestion on the Ashok Rajpath and provide better connectivity from West to East Patna.
In its report on Public Sector Undertakings recently tabled in the state assembly, the CAG has said the project, which was given administrative approval in 2013 at a cost of ₹3,160 crore, was to be financed through the state government’s contribution of ₹1,160 crore and ₹2,000 crore from the HUDCO.
The CAG added that scrutiny of records (March 2017) has revealed that construction work was given to a contractor at a total cost of ₹1,777.37 crore in August 2013 with the date of completion targeted for the road in September 2017. Due to technical problems and land-related issues, the pace of construction was very slow.
{{/usCountry}}The CAG added that scrutiny of records (March 2017) has revealed that construction work was given to a contractor at a total cost of ₹1,777.37 crore in August 2013 with the date of completion targeted for the road in September 2017. Due to technical problems and land-related issues, the pace of construction was very slow.
{{/usCountry}}The audit body has found the BSDRCL erring on the count that despite receiving funds to the tune of ₹836.20 crore as project fund (during 2013-18) from the state government, the company withdrew loan amounting to ₹193 crore from the HUDCO in two instalments.
One instalment of a loan worth ₹125 crore was withdrawn in February 2014 despite having ₹20.22 crore as balance out of the funds received from the Bihar government. The second instalment of ₹68 crore was withdrawn in March 2015 despite a balance of ₹260 for the project.
“Since there was no actual requirement of loan due to the slow progress of work, the company refunded the loan amount. Thus, due to inefficient financial management, the company unnecessarily withdrew interest-bearing loan worth ₹193 crore despite the availability of funds and incurred avoidable expenditure of ₹37.75 crore on interest payment from 2013-18,” the report said.
The audit body also found no merit in the BSRDCL’s contention that the first and the second instalments of loans were availed to avoid automatic closure of the loan agreement and automatic curtailment of the loan agreement.
“The reply is not acceptable. The company should have taken up the matter with HUDCO for non-withdrawal of instalment to avoid interest on the loan amount,” the report stated.