The Comptroller and Auditor General has slammed Uttar Pradesh Chief Minister Mayawati for incurring an “extra” expenditure of Rs 66 crore on her two dream projects - B R Ambedkar and Kanshi Ram memorials Lucknow.
The auditor said a sum of Rs 15 crore was wasted transporting stone blocks used in the memorials from Lucknow to Rajasthan and back. An avoidable expenditure of more than Rs 22 crore was also incurred by revising contracts.
The two projects - Bhim Rao Ambedkar Samajik Parivartan Sthal (DASPS) and Manyawar Kanshi Ram Smarak Sthal (MKRSS) were executed by government body Rajkiya Nirman Nigam (RNN).
Noting that the initial outlay for the two works was Rs 881.22 crore, which included Rs 366.82 crore for DASPS and Rs 514.4 crore for MKRSS, the CAG in a report tabled in the UP Assembly on Friday said due to frequent changes in drawings/estimates and addition of new works, total sanctioned cost of the projects as revised upto December 31, 2009 was Rs 2451.93 crore.
Against this funds of Rs 2261.19 crore were released by the State government between November 2007 to December 2009.
“The work was suspended from September 2009 due to stay order of the Supreme Court. The progressive expenditure against the two works amount to Rs 1776.57 crore upto December 2009,” the report said.
“Audit of two works conducted during December 2009 to February 2010 revealed instances of financial irregularities. These resulted in extra expenditure of Rs 66.48 crore on the works besides locking of funds on premature procurement of material, ultimately increasing cost of the works,” it said.
The CAG said the two works involved construction of boundary walls and flooring of Mirzapur/Chunar stand stone for which blocks were transported from these places to Bayana in Rajasthan (670 kms) for sawing and carving and finished stones were transported to Lucknow (450 kms).
“We are of the view that if sawing and carving of stand stone was done at Mirzapur/Chunar itself by engaging cutters there and transporting finished stones to Lucknow (315 kms) expenditure on transportation could have been reduced to the extent of Rs 15.6 crore due to reduction in distance of transportation (1120 kms to 315 kms),” the CAG said.
The auditor said such possibility for reduction in the cost of the work was not explored by the RNN management.
It pointed out that certain works were executed at high rates which also resulted in extra expenditure to the tune of several crore rupees.
The auditor also noted that in November 2007, the joint purchase committee finalised labour rates of making boundary walls, installation and fixing stone blocks floorings at Rs 1890 per cubic foot, Rs 1750 per cubic foot and Rs 2400 per cubic foot.
However, in December 2008 the JPC reduced the rates to Rs 1300 cft, Rs 1250 cft and Rs 1750 cft on its own resulting in an avoidable expenditure of Rs 22.16 crore on the quantity executed upto the date of revision of rates in December 2008.
“We observed that reduction in rates inspite of inflationary tendency in the economy during the intervening period was indicative of the fact that the management failed to obtain competitive rates earlier,” the report said.
It said that the management replied in December 2010 that due to establishment if machineries and infrastructure by local vendors at Mirzapur at later stage and increase in competition due to more vendors at Rajasthan there was reduction in rates.
“We view that benefit of competition could have been obtained from the beginning by adequate publicity of the work,” it added.
The report also noted irregular payment of service tax of Rs 4.51 crore to contractors despite the fact that the nature of construction activities did not attracted service tax.
“Service tax was applicable on construction of building or civil structure used to be used for commercial activities. We have observed that the works of two projects were monuments in nature and not intended for commerce or industry,” it said.
The report said RNN does not assess the requirement of luminary fitting required for the works of DASPS and MKRSS and failed to link procurement programme with civil construction activities.
“Between February 2008 to April 2009 it procured luminary fittings when only 62 per cent of the civil work was completed. As a result fitting values worth Rs 21 crore remain unutilised upto February 2010,” it said.
Subsequently all fittings except those valued at Rs 62.17 lakh were adjusted at other places in the same project or transferred to other projects of similar nature on the advice of the architects.
The CAG recommended that the company should take utmost care in analysing rates of items where works are awarded on the analysed rates and make endeavour to explore cost effective alternatives to execution of work.
“The company should finalise rates of different items of works and follow standard deductions as given in the schedule of rates of UPPWD and Delhi Schedule of Rates and procure material keeping in view the time of its requirement,” it concluded.