CAG report from 2012 returns to haunt Congress

Incorrect acceptance of bids despite exceeding the stipulated ceiling of 105 per cent by Rs.58.47 crore defeated the cost control objective of the Government.

Hyderabad: Even as the Congress-led State government is targeting the previous BRS government using reports of the Comptroller and Auditor General of India (CAG), a CAG report from 2012, which cited large-scale irregularities in implementation of irrigation projects during the tenure of YS Rajasekhara Reddy as the Chief Minister of Andhra Pradesh has come up to haunt the present regime.

The report on the Rs.1.83 lakh-crore Jalayagnam (Water Mission) featuring 86 projects is based on the performance audit of select projects implemented between 2004 and 2012.

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It cited irregularities such as lack of transparency in awarding contracts, violation of rules, fixing different costs to works of similar nature and adding certain taxes to the project cost where they were not supposed to.

It also quoted instances of undue benefits of crores of rupees to the contractor. For instance, the Audit Report of 2006-07 on the Godavari Water Utilization Authority, which involved the Devadula, Yellampally, Alisagar LIS, Guthpa LIS, Lendi, Indirasagar Dummugudem and Rajiv Dummugudem projects, mentions that the projects prioritized for completion by March 2007 were not completed and consequently, the objectives of utilizing allocated Godavari water and creating irrigation potential to 2.16 lakh acres in the Telangana region were not achieved.

It also says “unintended benefit” of Rs.359 crore was given to the contractor due to incorrect estimates and absence of suitable clauses in the EPC agreements to safeguard the Government’s interests.The audit report findings say that post tender reduction in the length of pipeline and the thickness of pipes resulted in undue benefit of Rs.108.86 crore to contractors. The findings also included “irregular advance payments of Rs.65.11 crore to the contractor contrary to the agreement conditions, which resulted in loss of interest of Rs.9.22 crore”.

The Audit Report of 2008-09 on the Accelerated Irrigation Benefit Programme, which included projects like Alisagar LIS, Gundlakamma Reservoir, Pushkara LIS, Somasila, Sriram Sagar Stage-I, Komaram Bheem, Ralivagu, Thotapalli Barrage, Veligallu Reservoir and Yerrakaluva Project, says that the projects were awarded without prior acquisition of land resulting in a majority of the projects getting stalled mid-way and non-creation of envisaged irrigation potential.

“Awarding of projects on a fixed price basis without defining the scope of work precisely and firming up the quantity of works to be executed and not having payments linked to quantity of works executed resulted in undue benefits to the contractors,” it said.

In the Audit Report of 2009-10 for the Mahatma Gandhi (Kalwakurthy) Lift Irrigation Scheme, the CAG found that the estimates were exaggerated by Rs.119 crore due to adopting a higher rate of Rs.15,000 per acre as compared to Rs.11,500 per acre adopted in two other projects viz., Koilsagar Lift Irrigation Scheme and Jawahar Nettempadu Lift Irrigation Scheme located in the same district having the same topography, and taken up in the same year (2005).

“Incorrect acceptance of bids despite exceeding the stipulated ceiling of 105 per cent by Rs.58.47 crore defeated the cost control objective of the Government.

Payments were made without reference to quantities executed resulting in undue benefit of Rs.242 crore to the contractors. No reduction in payments to contractors despite reduction in pipeline quantities resulting in excess payment to contractors by Rs.74.76 crore,” it said.

“In respect of tunnel works under Lift-II and Lift-III packages, the amount scheduled for payment to contractors was in excess of the amounts payable by Rs.122.32 crore,” it added.