Thursday, April 7, 2011

Crores wasted on factories constructed without electricity and toilets opened without water supply


CRUNCHED FROM 
THE CAG REPORT
GANGTOK: The department with a long, very elaborate name – Development Planning, Economic Reforms and North East Council Affairs Department [DPERNECAD] – has come up short in the performance review carried out on its functioning [in the implementation of projects funded by the NEC] by the Comptroller and Auditor General of India’s office. The audit unveils a familiar desolation of lack of transparency, planning and disinterest. 
Sikkim joined the NEC in the year 2002 and NEC-funded projects started coming in from 2003 onwards. A total of 97 such schemes to be implemented by 18 departments were sanctioned between 2003 to 2009-10. The total funds sanctioned in this period stand at Rs. 328.64 crore, of which Rs. 215.51 crore were actually released.
A “finance inverse tree” included in the CAG Report reveals that of the Rs. 215.51 crore released, Rs. 172.04 crore has been spent. The performance review test-checked the spending of Rs. 58.27 crore and within this sample size, noticed “irregularities” to the tune of Rs. 18.10 crore [31% of the finances checked]. Of this, expenditure which did not deliver on projected benefits, ranked the highest with Rs. 6.87 crore wasted on such works and infructuous expenditure, ranked second at Rs. 5.81 crore of the “irregular” expenses. Interestingly, both qualify as wasted expenditure and hence the total amount of wasteful expenditure [out of the Rs. 58.27 crore tested], stands at Rs. 12.68 crore.

The remaining amount has also not been very well spent because undue benefits to contractors and suppliers ate up another Rs. 1.98 crore, ineffective implementation consumed Rs. 3.23 crore and Rs. 21 lakhs were unaccounted for.
Defective Detailed Project Reports, an oxymoron possible only in departmental activities, led to time over-runs and claimed Rs. 1.09 crore in cost overruns. Lack of transparency is another oversight which mars such projects.
What the departments appear to have pulled off rather well is in overstating estimates to “accommodate” the 10% liability of the State exchequer in such projects.
The project-wise audit included in the CAG Report opens with the manner in which the Food Security & Agriculture Development Department bungled the setting up of a 150 MT per year bio-fertiliser unit, which, if it had worked, would have facilitated the State’s Organic State mission.
This project, bankrolled at Rs. 40.41 lakh, was completed in January 2005. It could not put out its first bag of bio-fertilisers till May 2008 because the unit, installed with all the machinery in 2005, did not have electrification, a component which was obviously essential, but not included in the Detailed Project Report. Two years later, the State paid up for this work as well and electrification work was completed in September 2007. Trial runs were finally conducted in May 2008, then again in August 2009 and September 2009. A unit which was projected to produce 150 MT every year, manufactured a total of 210 kg in 5 years. It has not been revived since, supposedly because a short-circuit has fried the machinery.
This implausibility of preparing DPRs for modern infrastructure without including the cost of electrification also inflicts the Animal Husbandry Department which spent Rs. 1.55 crore to set up a Polyclinic State Veterinary Hospital in Deorali in January 2008 but had not used it even until August 2010 because provision for external electrification was not included in the DPR. Equipment worth Rs. 16 lakh procured for this Polyclinic remains largely unused.
In both these cases, the short-sighted planning leading to wastage of funds is obvious, but what is more worrying is the denial of access to the infrastructure and products to the lay people.
But public convenience is not very immediate to how departments deliver and the Human Resource Development Department proves this well.
The lack of adequate infrastructure in government schools is a common complaint, so it would not have been very difficult to convince NEC to sanction Rs. 3.40 crore for new furniture for 426 schools. The order for 6,870 sets was placed in May 2005 with a local firm- National Equipment Trading Company of Gangtok.
The Department, however, has no system to link procurement at head office with corresponding receipt/ delivery at the schools. Needless to add, even a test check revealed short-supply and substandard [to the level of unusable even in a government school] furniture.
Substandard workmanship revisits HRDD projects even in its handsome Rs. 2.65 crore “Infrastructural Upgradation of Sikkim Government College, Tadong”.
This project started off with the lowest bidder for the civil works quoting 42.22% above the estimated price. He negotiated down to 38.66% above on the condition that the allied works like providing furniture, lab equipment, computers etc would also be awarded to him. This was a weird bargain because to save Rs. 3.80 lakh, the Department awarded, without calling competitive bidding, supply works worth Rs. 89.02 lakh.
The work was awarded in May 2005.
Defective planning, survey and investigation led to the work being scaled up to Rs. 3.15 crore when the DPR proved too poorly worked out for work on ground. NEC however cleared only about have the extra funds demanded and this led to the Department curtailing expenses on furniture, equipment, computers etc.
While the college library usually receives 10% discount on books when it purchases from the open market, the contractor, who took a Rs. 3.80 lakh cut in civil works for the supply of books among other goods, went on to bill them an extra 15% [on printed price] as transportation charges.
The college could have gone easy on the book procurement because not only was the ceiling of the library leaking and the floor scraping off with the footfalls, even the bookshelf supplied for the library was so inferior that it buckled under the weight of the books.
The 3 new classrooms were so imperfectly designed that there are sections from where the students cannot see either the teacher or the blackboard. The students toilet, also a new addition in the Rs. 3.15 crore project, remains unutilised for want of water supply.
The need for an accident and trauma centre in an accident-prone Sikkim cannot be reiterated enough. The Health Department also appears to have thought so in 2006 when it secured Rs. 1.35 crore from NEC to set up such a centre at Namchi. The construction work was completed in March 2009 at a cost of Rs. 47.82 lakh and equipment worth Rs. 32.41 kakh purchased. The centre, however, remained unutilised until barely a fortnight ago for what the Audit states are “reasons not on record”.
Lackadaisical implementation by the Department has also ensured that telemedicine facilities funded by NEC remain packed in the cartons in which the equipment was delivered.
[concluding part tomorrow]

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