Chennai Metropolitan Development Authority (CMDA) spent Rs. 2.37 crore on consultancy services on various World Bank-aided projects that eventually were not taken up even with State funds.

Comptroller and Auditor General of India (CAG) said this in its report on local bodies (Government of Tamil Nadu Report No.5 of 2013), which was tabled in the recent session of the Assembly.

The CAG said the State government decided to implement the traffic and transportation sub-component of the Third Tamil Nadu Urban Development Project (TNUDP-III) in October 2005 and sought World Bank assistance of $300 million (Rs. 1,350 crore).

This sub-component, at an estimated cost of Rs. 663.75 crore, was to be coordinated by CMDA and implemented by the Highways and minor ports department. A total of 34 urban sub-projects were identified for implementation at a cost of nearly Rs. 715 crore.

The project appraisal document prepared in May 2005 required preparation of the environmental and social framework and detailed project report (DPR) by CMDA. The framework included resettlement action and implementation plans. CMDA had to make do with Tamil Nadu Urban Infrastructure Financial Services Limited and, if needed, by making required adjustments to the terms of reference (TOR) for preparing the DPR.

When the consultants engaged for 22 road and bridge sub-projects submitted the draft feasibility reports, the World Bank insisted, in February 2006, on submission of resettlement action and implementation plans for the sub-projects. It said they were necessary before giving final clearance for the DPRs. Hence, the TOR had to be revised and the consultants demanded extra payment.

Since the extra payment was not agreed upon, the consultants delayed submission of the final DPRs. The additional rates were approved only nine months later by the State government. This delay, coupled with the delay of more than three years in formation of full-fledged Project Implementation Unit in CMDA, hampered the preparation of the environmental and social framework for TNUDP-III.

Despite clear stipulations in the project appraisal document of World Bank for preparation of the resettlement action and implementation plans, the project management committee of CMDA “failed to revise the TOR of the consultancies in time,” the CAG report stated.

In turn, this led to dropping, in July 2008, of 29 of the 34 sub-projects. Fifteen of the 29 dropped sub-projects were not taken up by July 2012 by the State government in other schemes. “The expenditure of Rs. 2.37 crore on consultancy services for these 15 sub-projects did not serve the purpose,” the report said.

CMDA response

The project director and member secretary of CMDA in January 2013 attributed the delay mainly to the change of scope of consultancy services, delay in finalisation of resettlement action plan and transfer of officials coordinating the pre-project activities. Further, the official said, the DPRs prepared by the consultancies were being utilised. Some of the sub-projects were being executed with State funds.

To this, the CAG said the reply was unacceptable as the delay in resettlement action and implementation plans indicated the lack of readiness on the part of CMDA.

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