Cost hikes in Vidarbha irrigation projects violated rules, reveals probe report

The Maharashtra government was well aware in 2010 of the gross irregularities in Vidarbha’s irrigation projects after a damning report by retired Water Resources Secretary Nandkumar Vadnere, who examined 11 major dams, 27 medium ones and 53 small projects as part of a one-member inquiry committee. In the second part of his report, Mr. Vadnere examined all the projects other than the Gosikhurd dam. He was asked to probe the projects for the four financial years from 2006-2007 to 2009-10.

The State government, however, chose to bury the two reports and did not make them public. Two years later, under increasing pressure from the Opposition and activists, the Chief Minister decided to approve departmental inquiries proposed against 45 officials, including the former head of the Vidarbha Irrigation Development Corporation (VIDC).

In the matter of the Gosikhurd dam, departmental inquiries against 14 officials are currently under way. For the first time in over 30 years, the Water Resources Department is being headed by an IAS official and the government has promised a long awaited white paper on the alleged mess in the irrigation sector by the December session of the legislature.

Mr. Vadnere examined 419 tenders for various projects worth Rs.11,410 crore. Of this he found 265 tenders were approved at a cost five per cent above the stated amount, while 154 tenders worth Rs.1050 crore were approved at a cost five per cent below the stated amount. Of the 265 tenders, in the case of 156, government rules were not observed while increasing the cost.

Of the 265 tenders, 153 were approved under the Accelerated Irrigation Benefit Programme (AIBP) at a cost of Rs.2819 crore. In the case of 47 tenders the cost conformed to government norms. However, in the remaining 96 tenders the cost increase violated government approved norms, the report said.

The committee, after examining all the tenders, found that the overall cost escalations defied logic and were ambivalent. The cost increase was not carried out on an equal footing for all tenders.

In the case of 156 of the 265 tenders where costs were escalated, the committee found 10 reasons for the increase. Cost was jacked up due to the addition of taxes like VAT, excise duty, insurance, service tax, works contract tax etc, apart from increased price of materials like cement, steel, sand, machinery, and changes in the scope and structure of work. Sometimes the cost rose due to changes in the specifications as well. The use of machines — like concrete pavers or mechanical trimmers — not specified in the original cost estimates was cited as a reason.

The committee observed that before calling for tenders, the original cost should have first been revised keeping in mind the scope and structure of the work so as to ensure minimal cost updation. However, this was not done. In addition in the cases of most projects there was no inspection by the chief engineer. With respect to cost hikes the amount in the original estimates for the works was increased without observing government scheduled rates. Proper approvals were not obtained for these cost increases, the committee noted.

In some dams, the cost of materials like gravel, which was available 80 km away from the construction site, led to inflated transport expenditure. The option of mining gravel from locations closer could have minimised transport expenses, the report said. It also demanded a policy on mobilisation advances which led to cost increase.

The report points to the lack of adherence to rules and discipline, apart from violations of the Public Works Department rules.

To speed up work, the government has granted authority to officials to approve cost increases from the original estimates, but the committee cautioned the government to grant approvals for increased cost only on the basis of a thorough study of the scope and structure of the work, keeping in mind the current scheduled rates of the contracts. Otherwise permission should not be given, it noted.

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Printable version | Jul 24, 2021 8:20:08 AM |

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