Vadnere Committee exposed gross irregularities in project, hit by corruption and cost escalations

While the Maharashtra irrigation scam has now grabbed national attention, even two years ago the Vadnere Committee highlighted gross irregularities in the Gosikhurd project, which is floundering in a maze of corruption and cost escalations.

The first part of the report, submitted by Nandkumar Vadnere, retired Principal Secretary, Water Resources Department, in June 2010 went into the sorry state of affairs in the Vidarbha Irrigation Development Corporation (VIDC) from the financial years 2006-2007 to 2009- 2010. It reported wide ranging illegalities, right from the tendering process in the prestigious project in Bhandhara district.

The Gosikhurd project across the Wainganga river, approved in 1982, was declared a National Irrigation Project by the Centre, which was to fork out 90 per cent of the cost. It was planned to irrigate 2.50 lakh hectares with a network of canals including a right bank canal of 99 km, a left bank canal of 22.93 km and four lift irrigation schemes — Tekepar, Nerla, Ambhora and Mokhabardi. It also includes renovation of the existing Asolamendha tank. The project, launched by the former Prime Minister Rajiv Gandhi in 1984, it is far from completion.

The cost rose manifold from Rs. 372 crore in March 1982 to Rs. 7,777.85 crore in 2008, according to a writ petition filed in August by Jan Manch before the Nagpur Bench of the Bombay High Court.

According to the VIDC’s official figures tabled in the Assembly, Rs. 6609.64 crore was spent on the project till March 31, 2011. The actual irrigation till 2010-2011 stood at 1,582 hectares, the irrigation potential created till March 31, 2011 was 34,022 hectares and expected to be created till March 31, 2012 was 48,370 hectares.

The petition says that in comparison to the expenditure of Rs. 6,609.64 crore i.e. 84.98 per cent of the final cost of the project at Rs. 7,777.85 crore, the irrigation potential created is a mere 34,022 hectares or 13.5 per cent of the target of 2,50,800 hectares.

The reasons for this huge expenditure and paltry irrigation cover created can be found in the Vadnere report, which highlighted gross mismanagement. While a departmental inquiry was launched against 14 VIDC officials, it is not known if anyone was punished. The VIDC officials refused to comment on the matter.

Illegal hike in tender cost

The committee found that of the 195 major tenders (Rs. 1 crore and above) floated in the four financial years, 50 were allotted at five per cent below the original estimated cost. Among the other 145 tenders, 18 pertained to roads and civic amenities. Of the 127 major tenders investigated, it was found that the cost of 37 major tenders was hiked as per government norms, while the estimated cost of the remaining 90 tenders was arbitrarily increased and done outside the purview of various rules and regulations.

One of the chief reasons cited for ‘illegally’ hiking the cost of the tenders was inclusion of taxes like VAT or excise duty which were already included in the original estimate. In some cases, the cost was not based on the Current Schedule Rates but much more. Regional officials of VIDC also violated the Maharashtra PWD manual Clauses 313 and 315 on updating the tender, and a majority of the tenders allotted for the project did not conform to other provisions in the manual.

Why mobilisation advance?

Though there was no provision in the tender document for granting a mobilisation advance to contractors, it was given with the approval of the Water Resources Minister (Ajit Pawar) and Ex-Officio Chairman of VIDC, between 2007 and 2009, the Vadnere Committee said. VIDC granted mobilisation advance at an interest rate calculated by adding 0.2 per cent to the prime lending rate of banks, documents scrutinised by the committee revealed. A total of Rs. 135.28 crore was paid as illegal mobilisation advance in the Gosikhurd project.

The Comptroller and Auditor General of India, in a Special Performance Review of VIDC, 2012, also pointed to the irregular grant of mobilisation and machinery advance and mentioned undue favour shown to the contractors. Despite official circulars in March 2000 prohibiting such advances, the government paid Rs. 399.91 crore for five out of 27 projects including Gosikhurd. This resulted in an undue benefit to the contractors.

In addition, a seven-member expert committee constituted by the Union Water Resources Ministry to monitor the Gosikhurd project found cracks in the left bank main canal concrete lining work, says the Jan Manch petition. After this panel suggested an investigation, the State government in February 2010 appointed an Enquiry Committee headed by the then chief engineer H.T Mendigiri.

In its report submitted on June 25, 2010, the Mendigiri Committee said the reason for cracks was poor quality of lining, resulting in low density and lower strength of concrete. There was insufficient and improper curing of concrete. A Maharashtra Engineering Research Institute (MERI) test report reveals that about 25 per cent core locations showed lesser thickness than the specified design. There was no proper inspection of the canal to boot.

VIDC went on to build concrete lining in the canal from 11.13 km to 22.93 km at a cost of Rs 20.24 crore. This was done without studying the performance of the lining of the initial reach from 1 to 11.13 km — a gross violation of two government circulars. The only option was to redo the entire length of the canal and work was being done at a slow pace, the petitioner contended.