Thursday, Aug 29, 2024 22:00 [IST]
Last Update: Wednesday, Aug 28, 2024 16:28 [IST]
GANGTOK,: The Comptroller & Auditor General (CAG) of India has recommended to the department concerned to ensure that encumbrance-free sites are available before releasing Mobilization Advances (MAs) to contractors for PMGSY road construction projects.
Interest free advances amounting to Rs. 17.83 crore were granted to contractors for execution of 34 road works, even though the sites were not ready due to which, the work could not commence even after 14 to 40 months of schedule date of completion, leading to extension of undue benefit to the contractors and loss of interest of Rs. 4.95 crore, said the CAG in its report for the year ended March 2022.
Department should take all necessary measures in recovering the advances already paid wherever there is inordinate delay in completion of works, recommended the CAG. The audit body made these recommendations as 34 PMGSY road construction works had not even commenced after lapse of two to five years from the date of taking advances.
Scrutiny of records in November 2021 in the office of CEO, PMGSY Cell, Gangtok had revealed that 227 road construction works were awarded to different contractors during the period from 2011-12 to 2018-19 which were yet to be completed. The office had granted advance of Rs. 161.88 crore (Mobilization Advance: Rs. 65.35 crore and Equipment Advance: Rs. 96.53 crore) for these works to the contractors, out of which Rs. 71.78 crore had been recovered as of October 2021.
Out of the sanctioned 227 works, 193 works were at different stages of construction and 34 works valuing Rs. 130.79 crore had not commenced even after lapse of two to five years from the date of drawal of advances.
Audit analysis further showed that 34 works had not commenced due to various reasons including non-obtaining forest clearance, NOC from owners and land dispute, defective DPRs, non-connectivity to site and natural calamities. In eight cases, the PMGSY Cell did not mention any reasons.
Although the scheduled date of completion had already elapsed by 14 to 40 months in respect of the 32 works (excepting two cases of natural calamity), neither the works were initiated nor any efforts were found made for recovery of the advances so granted.
Thus, even though the executing divisions were not in position to make encumbrance-free work sites available to the contractors in respect of 32 cases, yet the contractors were accorded undue favour by way of grant of advances of Rs. 17.30 crore (MA: Rs. 5.56 crore; and EA: Rs. 11.74 crore), stated the CAG.
“It may be noted that on one hand, the State Government was paying an average interest @ 7.16 per cent (2017-18) on the funds borrowed from Financial Institutions; while on the other hand, the State Government sanctioned interest free advances of Rs. 17.30 crore to others. The interest implication of such advances works out to Rs. 4.95 crore,” said the CAG.
As per the report, the department while accepting the audit observation informed (August 2022) that it had not anticipated such a long delay in these works due to non-availability of encumbrance-free site and also added that the advice of the audit shall be duly noted into account in all the PMGSY works in future.
“The department subsequently added (January 2023) that six works had still not commenced and remaining 28 works which were to be completed by September 2022 remained incomplete as of December 2022. Further, the department also stated that one out of the 34 works is still not renewed.
However, the department has not furnished any details regarding completion of work, renewal of the rest of the BGs or issuance of notices to concerned contractors,” said the CAG.
The audit body recommended that the department should fix responsibility for the lapses observed in execution of PMGSY works and develop a proper mechanism to ensure that mobilization advances are released in not less than two instalments and proof of utilisation of advances are obtained from the contractors along with renewed bank guarantees.
