Gurgaon NHAI: project plan had several deficiencies
Panel of MPs noted NHAI went wrong in the very first step when it failed to design viable revenue model. Siddhartha Rai reports.
Residents and experts are not the only ones who have been vocal about debilitating deficiencies and procedural lapses on the Delhi-Gurgaon Expressway due to laxity of the concerned agencies. Even the Parliament echoed the sentiments back in 2009.
After reviewing the expressway’s performance audit carried out in 2008 by the office of the Comptroller and Auditor General (CAG), a special panel of MPs (members of parliament) observes that the project had been used to unduly enrich the concessionaire. “The committee note that the Delhi-Gurgaon project suffered from many deficiencies right from the beginning,” says the parliamentary report.
The panel gathered an impression that all aspects of monitoring and supervision of the works were left in the hands of the independent consultants. The NHAI washed off its hands of its responsibilities by blaming the independent consultants, while the government shifted the blame on the NHAI, saying it was latter’s responsibility to enforce the provisions of the concession agreement and thus it did not notice the discrepancies.
“Keeping in view the fact that three government secretaries are on the board of the NHAI and the ministry also conducts frequent meetings to ascertain the progress of NHDP, the committee wonder as to how all the shortcomings observed in the Delhi-Gurgaon project escaped the notice of the ministry,” asked the panel.
The performance audit of the Delhi-Gurgaon expressway and the toll plazas therein was an alarming eye-opener, said JS Marahatta, the lawyer who represents the Toll Hatao Sangharsh Samiti, a citizens’ pressure group, in court. “The committee had unequivocally castigated the authorities involved and therefore asked for action against them,” he added.
Faulty revenue model
The MPs panel noted that the National Highways Authority of India went wrong in the very first step: It failed to design a viable revenue model in the first place; and then went with a model that was rejected by the financial consultant. The change of the mode of execution of the project from a special purpose vehicle (SPV) to the build-operate-transfer (BOT)-toll model was deemed a result of “indecisiveness”.
The panel also noted: The preferred model had proved to be detrimental to people’s interests and caused financial loss to the exchequer.
Change of scope of work due to planning flaws
As the expressway suffers from several inherent macro-level flaws due to a deficient detailed project report (DPR), many works of public utility were included after the planning stage. These critical items of public interest were later covered under changed scope of work orders that accounted for 21% cost over-runs. “Lamentably, these deficiencies have cost the exchequer a whooping `146 crore that had to be paid by the government, thus nullifying the factor of negative grant of `61 crore received from the concessionaire,” noted the panel.
No fresh traffic survey
Despite a mandate from the financial consultant, the NHAI did not conduct a fresh traffic survey before fixing the concession period. The result: What should have been a 14-year agreement was extended to 20 years, which led to the enrichment of the concessionaire. Though the CAG had, in 2008, estimated the extra-income due to extended period at just `187.7 crore, as per information through a recent RTI, the concessionaire has already collected `955 crore with a concession period that will end in 2023.
Premature issuance of completion certificate
The MPs’ panel concluded that “undue haste has been shown in giving the completion certificate to the concessionaire”. The provisional certificate was given to the concessionaire on January 23, 2008, and commercial operations started on January 25, 2008; but the final completion certificate was issued on August 22, 2009 even when the concessionaire had failed to complete work on nearly 250 items. These were appended to the provisional certificate as a ‘punch-list’, to be completed within 120 days of issuance of the provisional certificate i.e. by May 24, 2008. The same were not fully completed till October 2009, the panel had observed.
Delay in appointment of independent auditors
The MPs panel pointed out many financial and procedural irregularities in the execution of the project. It highlighted that independent auditors, also called statutory auditors, who were to be appointed to cross check the financial data furnished by the concessionaire were not appointed in time. Though the NHAI was not obliged to do so, yet it was within its brief to appoint them.
Absence of road safety audit
The fact was noted by the parliamentary committee in 2009. “The committee note that no road safety audit was carried out with respect to the Delhi-Gurgaon project either at the planning stage or at the detailed project report stage,” the MPs panel had observed. The panel noted that this was “in complete neglect of the interests of non-motorised traffic and pedestrians”, which caused a number of avoidable fatal accidents and deaths on the expressway”.
Speechless NHAI
When the MPs panel asked the NHAI about plans to decongest the increase in traffic, the reply given by the authority was “NHAI at present (in 2009) do not have any plan to decongest the highway”. The NHAI also failed to tell the panel why land could not be acquired for laying of service roads along the highway. The agency had no answer for why no provisions were made in the DPR for adequate facilities for pedestrians and who to hold responsible for the deaths caused because of inadequate safety infrastructure.