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CAG censures Delhi Jal Board

Staff Reporter

For making extra payment to a contractor

NEW DELHI: The Delhi Jal Board has been censured by the Comptroller and Auditor General of India for making extra payment to a contractor because of incorrect application of rules.

In its latest report, the CAG has pointed out that the water utility had made the extra payment of Rs.29.62 lakh to the contractor as “escalation charges”.

The Jal Board had awarded the work for replacement of old damaged water lines in various parts of South Zone II to Northern Sanitation, a contractor, in February 2001 at a cost of Rs.5.48 crore. The work was not completed in 12 months as per schedule. In 2003, the contractor was debarred and a fresh contract was awarded to Tirupati Cement Products at a total cost of Rs.6.44 crore in April 2005.

This contract was awarded at the risk and cost of the previous contractor with a stipulated date for start and completion of work. The work was completed on February 20, 2006, and the final bill of Rs.6.44 crore was paid in September 2006. Pointing out that the payment of escalation charges to the second contractor was irregular, the CAG report states: “It was seen in audit that Tirupati Cement Products claimed an amount of Rs.29.62 lakh as escalation under Clause 10 CC, which was paid by the Department in December 2006. Payment of escalation charges to the second contractor was irregular as the period of completion of the work with this contractor was only 10 months and therefore no escalation was permissible as per provisions of CPWD works manual 2003.”

The CAG has also dismissed the Board’s reply: “The Board’s reply is not acceptable since the balance work was awarded in April 2005 by inviting fresh tenders in January 2005. The work was also executed within 10 months of the award of contract. Therefore, the instant case is covered under Section 32.8.2 of the CPWD works manual 2003. The insertion of clause 10 C in the contract and incorrect application of manual provisions resulted in avoidable payment to the contractor.”

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