CAG raps Cidco over losses of ₹1,000 cr

The Comptroller and Auditor General of India (CAG) has rapped the City and Industrial Development Corporation (Cidco) over financial losses worth more than ₹1,000

The Comptroller and Auditor General of India (CAG) has rapped the City and Industrial Development Corporation (Cidco) over financial losses worth more than ₹1,000 crore in three major infrastructure development projects — Navi Mumbai International Airport (NMIA), Navi Mumbai Metro Railway (NMMR) and Nerul-Uran Railway (NUR). The report was tabled by deputy chief minister Ajit Pawar in the state Assembly on Tuesday.

HT Image

The CAG, in its report on state’s public sector undertakings for the year ending March 31, 2018, found financial irregularities, inadequate planning, violation of tender conditions, infeasible alignment of rail route, non-levy of compensation from contractors for delay in completing works and many other anomalies, which delayed the projects and ultimately led to financial losses. Most of the decisions were taken during the tenure of the Devendra Fadnavis-led Bharatiya Janata Party (BJP) government. Cidco comes under the state urban development department.

HT, in its report on February 28, had revealed that CAG has made serious observations against Cidco. The CAG findings will now be discussed in the public accounts committee (PAC) of the state legislature, which will also submit its report with recommendations.

Former chief minister and leader of Opposition Fadnavis refuted the charges and claimed the observations made by CAG are pertaining to works issued during the Congress-NCP regime which was in power before 2014. According to the report, in June 2016, Cidco issued a letter of acceptance (LoA) for the NMIA project to the lowest bidder, a joint venture (JV), for land development (package I).

The cost of the tender was ₹203.53 crore (9.81 per cent below the estimated cost of ₹225.67 crore). Similarly, for package II, the JV was again the lowest bidder, quoting ₹194.15 crore (14.71 per cent below the estimated cost of ₹227.63 crore).

Cidco, while issuing the LoA for package I, demanded additional security deposit (ASD) equivalent to five per cent of the contract value (₹10.18 crore). However, as per the tender conditions, ASD can be demanded on account of unbalanced bids only when the bids received are 15 per cent below the estimated cost, states the report.

It observed, “Cidco, in contravention of the tender conditions, withdrew LoA issued for package I in August 2016, citing delay in submitting contract deposit and non-furnishing of ASD and also cancelled the bid received for package II. Both the works along with Ulwe river diversion were later clubbed and awarded in June 2017 to the joint venture [a different one] for ₹529.37 crore (only 2.85 per cent below the estimated cost of ₹544.89 crore).”

CAG pointed out that in January 2010, Cidco has decided to implement line 1 of the NMMR project from Belapur to Pendhar (11.10km) at a cost of ₹1,694 crore, with scheduled completion in December 2013. In July 2013, it appointed Louis Berger Inc. as the consultant to supervise the work. In August 2017, the cost of the project was revised to ₹3,064 crore, with revised schedule for completion as May 2019, a cost escalation of around ₹1,370 crore.

In its report, CAG has found that Cidco has not recovered compensation of over ₹185 crore from 22 contractors for delay in completing works related to NMMR project worth ₹4,759 crore.

In another case, it has found that Cidco violated contract conditions by giving over ₹25 crore as advance to a contractor in ₹1,328-crore work under the NMMR project.

Cidco was found to have violated the prescribed norms for calling tenders of development projects.

No advertisement for global tenders for 16 works, each worth over ₹50 crore, was published in any international newspaper. This includes works for the Navi Mumbai airport project.

CAG also found that additional works worth over ₹69 crore were allotted to 10 existing contractors without calling for fresh tenders, violating the guidelines.

In all cases, CAG was not convinced with the reasons presented by Cidco for its decisions and has made several recommendations to the agency with regards to planning, coordination and strictly implementing its policy and tender conditions.

“CAG has made observations in relation to NMMR and NUR. All decisions were taken prior to 2014,” he said. He also clarified that Cidco is an autonomous body and its decisions don’t need clearance from a minister or the chief minister.

‘Won’t waive toll at entry points of city’

The state government on Wednesday stated that toll collection will not stop
at the five entry points to Mumbai and on the Mumbai-Pune Expressway.
If this is done, it will cost the exchequer losses amounting to ₹18,344 crore, said urban development minister Eknath Shinde. This was part of a written response given by Shinde to a question asked by Congress legislator Anant Gadgil, in the legislative Council on Wednesday.

State to unveil new policy for libraries

The Maharashtra government is coming up with a new policy that will focus upon improvement of libraries. The policy will also give a boost to the rural libraries movement in the state. The state higher and technical education minister Uday Samant declared in the state Assembly on Wednesday. He said that the new policy will be unveiled by the next legislature session. Currently, there are 12,149 recognised public libraries in the state, but no permission for setting up new libraries since 2012-13.