Watered Down!

Water supply projects are hamstrung by poor planning and even poorer implementation

Sikkim received Rs. 86.64 crore for water supply projects between 2009 and 2014, a five year period during which it took up 23 such projects. A performance audit by the office of Comptroller and Auditor General of India now informs that while only 6 of the 23 projects have been completed, no impact study was ever carried out by any agency. The delays and the litter of incomplete projects are perhaps only to be expected since the quarterly [stock-taking] meetings to be headed of the Chief Secretary, as recommended by the CAG, were not convened even once in the said five years. As a result, even though Rs. 72.78 crore of the Rs. 86.64 cr sanctioned for Sikkim was used up in the five years, 74 per cent of the projects were still under construction and at various stages of delay; as of March 2014, some of the 17 delayed projects were only 13% complete.

Little surprise then that water security planning in Sikkim leaves much to be desired. The State is blessed with abundant water sources, but in these times of climate change and exploding urban populations, better planning would be well-advised, as would be getting the basics right like tying up land acquisition issues before finalising detailed project reports, strengthening quality control mechanisms and drawing up and carrying out inspections on schedule.
To make improvements, the agencies responsible for water security should go through the performance audit of water supply projects funded under NLCPR [Non-Lapsable Central Pool of Resources] and NEC [North East Council] for the period 2009-14 included in the CAG Report for the Government of Sikkim for the year ended 31 March 2014. CAG analysis, among other things, has come to the conclusion that “due emphasis was not accorded to appropriate formulation of projects”; prospective plans had not been prepared and concept papers were either not prepared, or were incomplete when submitted. The concerned agencies routinely got the basics wrong by preparing DPRs without proper survey or investigation and the State let the projects down by short releasing the State share even as implementing departments left funds unutilised and allowed unjustified delays in calling tenders for the works.
To begin where the performance audit begins, the audit examination revealed that the implementing departments [PHE and RM&DD] and the nodal department [Department of Planning] had not initiated any action to prepare Perspective Plans, required to be done latest by 30 November to draw up a priority list for the next financial year. Therefore, selected and recommended projects were not “priority” projects, as can be further seen from the fact that “priority lists” were submitted late in 15 [out of 23] cases test-checked by CAG auditors.
The NLCPR guidelines also required concept papers to be submitted for each project incorporating the problem to be addressed, development objectives proposed to be achieved, likely benefits, environment impact assessment, sustainability and operation and maintenance issues. The departments did not bother with such formalities, and clearly, because the concepts were never clearly spelled out, implementation was consistently slack and projects invariably wallowed in delays and disinterested execution. The concept papers were prepared perfunctorily in 15 cases as important parameters were not incorporated in them, the audit further puts on record.
The implementing departments also appear to have mistaken the “D” in DPRs to stand for “Defective” instead of “Detailed”. Even though guidelines required DPRs to be accompanied by socioeconomic feasibility reports, economic and technical viability, detailed technical specifications, project implementation and monitoring schedule, only one of 23 projects included such details. “This led to delay in commencement of projects, unauthorised revision of projects and delay in completion of projects…” the audit report deduces.
The six projects [out of 23] which were completed, reached that goal after delays ranging from 33 to 52 months while 14 of the 17 under-construction projects were running behind schedule by three to 72 months! Of these 14 slow-moving projects, the water supply scheme for Central Pendam had not even commenced while the water supply project for Makha Bazar was stalled.
The augmentation of Central Pendam water supply scheme was initiated by RMDD in the year 2005, supposedly to ensure “regular and sustainable” supply of potable water for Central Pendam and its adjoining areas. Kolkata-based Archtech Consultant Pvt Ltd was commissioned to prepare a DPR. Against a deadline of August 2006, the company submitted the DPR in October 2008, projecting the scheme to cost Rs. 21 cr and benefit a population of 5,434 people. DoNER approved Rs. 20.50 crore for the project in June 2009 with the stipulation to complete it by June 2012.
This project has not even been able to commence, initially because of non-availability of a clear site for laying pipelines and more importantly because the identified water source had already been tapped by Water Security and Public Health Engineering Department for the Pakyong Water Supply project. Now, the Department wants to modify the DPR and is awaiting approval to do so.
It would have offered some consolation if at least the Pakyong Water Supply project, to which the Central Pendam project lost its water source, had been completed without a hitch. But even that has not happened for this project sanctioned at an estimated cost of Rs. 9.83 crore. Civil works were awarded in March 2012 for Rs. 5.62 crore to be completed by Feb 2014. As of March 2014, Rs. 6.41 crore had been spent and 66% of the civil works completed. Also, the realignment and strengthening of existing pipelines, although required as per approved project, had not been carried out at all.
The audit report also pulls up unauthorised revision of Rhenock Water supply project which resulted in a four-year delay. The augmentation of Rhenock Water Supply Scheme was sanctioned in Feb 2008 at an estimated cost of Rs. 16.27 crore and stipulated for completion by January 2010. Any changes in the project parameters were to be intimated to CPHEEO [Central Public Health and Environmental Engineering Organisation]. When the completion deadline, Jan 2010, approached, instead of the project being completed, it went in for a substantial revision and CPHEEO was not informed. And while the project for Rhenock was getting delayed, Rs. 25.72 lakhs from its kitty was diverted towards overhauling and annual maintenance contract for Gantok’s Selep water treatment plant. The Department claims that the Rhenock project has since been completed.
Implementation is bound to suffer if Detailed Project Reports are so defective that water sources need to be changed. This was also seen in the case of the Dentam water supply project which was approved for Rs. 4.50 crore in Jan 2010. It started with a stutter because the cost was worked out in 2008 and was hence too low by the time it was approved in Jan 2010. An additional sanction of Rs. 2.13 cr was secured in March 2011. In December 2011, the contract was awarded, but stumbled again because of dispute with land owners during execution of work. The intake source was then shifted as a result of which a project which was originally scheduled for completion by June 2011 had not been completed even till July 2014.
Any delay in implementation results in cost escalations, so it would be expected that projects are contracted at the earliest possible once they have been approved. NLCPR guidelines require works to be awarded within three months of sanction of projects, but the implementing departments dragged their feet resulting in delays in award of contracts in 17 out of 23 works. These delays ranged from one month to 31 months! Little surprise then that only 6 out of 23 projects were completed after delays ranging from 33 to 52 months. 14 of the under-construction 17 projects [as of March 2014], 14 were running late by periods ranging from one month to 72 months.
The reasons for delays in completion were non-finalisation of land, non-obtaining of forest clearance and fault in part of contractors. Surprisingly, while the implementing departments indicated availability of land in the DPRs, in a majority of the cases, land was not available for commencement of projects.
There has also been much wasted expenditure even in projects which have been completed because completion does not necessarily mean successful implementation. Take the case of the augmentation of Kaluk-Rinchenpong Water Supply Scheme, which, ten years from sanction to completion and Rs. 3.46 crores later, is still not even operational!
In Feb 2004, DoNER sanctioned the project for Rs. 3.50 cr. The project claimed to cater to drinking water requirements of 13,330 people of Kaluk-Rinchenpong and ensure their water supply requirements for 25 years from date of completion of project. Three contractors were commissioned in March 2005 to complete civil works by Feb 2006. The project was eventually “completed” in January 2010. Physical verification in June 2014 revealed that the project was non-functional due to defects caused by frequent bursting of pipes in difficult terrain.
Then there is the augmentation of water supply for Makha Bazar sanctioned in Dec 2011 for Rs. 4.92 crore. The project envisaged supply of 135 litres per capita per day of safe drinking water to 1,796 people of Makha Bazar and surrounding areas. Water was to be sourced from Rangsang Khola 9.10 kms away. The civil works for laying of pipes was awarded in Dec 2012, and by Oct 2013, the contractor had laid 4.5 km of pipelines. Then he stopped work and requested that the project cost be revised upwards. The revision was not accepted by the Department. As of June 2014, the pipeline has travelled only half the distance and remains abandoned at 4.5 kms.
The implementing departments, even though they might disregard the requirements of lay people, are invariably very accommodating and lavish with contractors. If a consultant is hired to prepare a report and told that remuneration will be 6% of the estimated cost of the proposed project, one is guaranteed to be presented a very expensive project. This is what happened when, in Dec 2009, WSPHED engaged a Ranipool-based consultant to develop a comprehensive drinking water supply scheme for Namchi and told that consultancy fee will be paid at 6 per cent of the estimated cost of the proposed project [prepared by the consultant]. In November 2011, the consultancy firm submitted a DPR with an estimated cost of Rs. 94.47 crore and submitted a bill for Rs. 5.68 crore. Interestingly, DoNER approved this Rs. 94.67 crore project only for Rs. 38.22 crore. The payment to consultant worked out from Rs. 94.67 crore was thus unwarranted.
The State Government also penny-pinched to the detriment of the projects. Against Rs. 10.01 crore which should have been released as part of the State share for these 23 projects from 2009 to 2014, only Rs. 3.74 crore was released, purportedly due to funds constraints in State Plan Fund.
Apparently, the State Govt was also tight-fisted even in releasing funds sent from DoNER for the implementing agencies. The NLCPR guidelines require the Finance Department [which receives funds] to release funds to implementing Departments within 15 days of receiving it from the GoI. Even though the Department of Planning, the nodal department, is required to send a certificate to DoNER attesting this timely transfer, the Department of Planning neither maintained any records of such transfers, nor sent any certificates to DoNER. Examination of records at WSPHED revealed that against GOI release of Rs. 13.76 crore as of March 2014, the Finance Department released only Rs. 3 crore to WSPHED within the prescribed 15 days. Neither the nodal department nor the implementing department bothered to follow it up with the Finance Department.
What is apparent from the performance audit of implementation of water supply schemes by WSPHED and RMDD is that performance is in desperate need of improvement. One is familiar nowadays with the sight of display boards at even the most ordinary of contract works. In fact, it appears that implementing Departments are required to erect such display boards at project sites immediately after sanction of a project indicating the date of sanction, likely date of completion, estimated cost, source of funding, physical target, name of contractor etc. When it comes to the 23 projects inspected by CAG auditors, such a board was erected only for one project! Maybe the oversight was intentional, to avoid the embarrassment of getting clearly identified with shoddy work. Now, after the CAG report, that fig leaf is not available anymore and the concerned agencies will be well advised to take the CAG recommendations seriously and, well, improve their performance.