Jalayagnam estimate preparation mistakes cost Rs 3129.5 crore: CAG

On the other hand, the audit reports on other projects that were part of Jalayagnam also pointed out multiple irregularities.

Hyderabad: The Comptroller and Auditor General of India (CAG) report from 2012 found that there was no uniformity in preparation of the estimates for various projects in Jalayagnam.

It said the internal benchmark (IBM) estimates were worked out at increased amounts on five fronts – higher estimation of quantities, higher estimation of costs of components, inclusion of duties and taxes – which do not cover irrigation projects.

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The total impact of these components in increasing the IBM values was a staggering Rs.3129.5 crore. This was in addition to the abnormal increase in project cost at a later date, for instance, the Dummugudem project cost increased by Rs.10,000 crore, the report said.

According to the report, audit scrutiny of mobilisation advances paid to contractors in eight projects also revealed many deficiencies including incorrect payment of advances of Rs.111.84 crore and loss of revenue of Rs.33.07 crore due to incorrect stipulation of interest rate.

Starting of civil works without addressing the issues of statutory clearances like Forest and Environmental clearances, land acquisition and Rehabilitation & Resettlement led to slow progress of works, which led to blocking up mobilization advances amounting to Rs.702.70 crore with the contractors beyond their scheduled dates of recovery in the eight test checked projects, the report adds.

The CAG report also said the criteria for empanelment of firms for these projects were altered later by diluting eligibility parameters. Out of 649 packages worth Rs.1.23 lakh crore, only 227 packages (37 per cent) valuing Rs.23,771 crore were entrusted to the empanelled firms, while the remaining 422 packages worth Rs.99,866 crore were awarded to firms under the open category.

On the other hand, the audit reports on other projects that were part of Jalayagnam also pointed out multiple irregularities.

For instance, in the KL Rao Sagar (Pulichintala) Project, absence of vital cost control in execution of project works resulted in the Government not getting the benefit of post tender reduction in quantities and undue benefit of Rs.56.52 crore to the contractor.

On the Flood Flow Canal from Sriram Sagar Project, the report says incorrect sequencing or synchronization of various activities/works under the Flood Flow Canal (FFC) project led to incurring of huge expenditure of Rs.1,476.30 crore on project works earlier than required, only to be blocked in an incomplete asset without any benefit till reservoir is completed.

In the Rajiv Bheema Lift Irrigation Scheme, the contractor got undue benefit of Rs.21.25 crore due to post tender reduction in quantities.

As for the Kandula Obula Reddy Gundlakamma Project, undue benefit of Rs.22.43 crore was given to contractor due to lack of safeguards in the agreements to ensure that the payments to contractors are linked to the quantities of work actually executed by them resulting in release of higher payments to the contractors.