CAG report detailing funds mismanagement in UP punctures BJP's good governance narrative

The Compliance Audit Report of the Comptroller and Auditor General of India (CAG) has exposed numerous cases of irregularities and corruption in Uttar Pradesh on which the state government did not take prompt actions even when they were pointed out, exposing the complicity of the concerned government officials in the matter.

The total financial impact of the audit findings included in the report for the year which ended on March 31, 2020 is Rs 418.13 crore.

The report should be an eye opener for all those who are taken in by the propaganda of the Modi government at the Centre and the Yogi government in the state of efficient and corruption-free governance under the BJP.

Since Uttar Pradesh sends the largest number of MPs in the Lok Sabha, and the BJP has set a target to win 75 out of 80 seats, the revelation would be of the utmost importance for the people when it comes to vote on the basis of allegations and counter-allegations of irregularities and

corruption in the present or past state governments led by the BJP and the Opposition parties such as the Samajwadi Party or the BSP.

The present audit compliance report covers as many as 16 departments of the state government along with 52 Public Sector Undertakings (PSUs) and 19 other entities, autonomous bodies or authorities etc, and hence gives a comprehensive idea as to what is happening under ‘Yogi Raj’ in the state and ‘Modi Raj’ at the Centre.

During the course of the audit, recoveries of Rs 197.17 crore were pointed out in seven cases in various departments and entities, and were accepted by them, but when it came to action, they made recovery of only Rs 26.73 crore in six cases.

The construction of a high-level Cancer Institute at Medicity, Lucknow at the cost of Rs 854.51 crore was also audited. The project was awarded to the executing agency, Uttar Pradesh Rajkiya Nirman Nigam Limited (UPRNN), in 2015 at the cost of Rs 797.76 crore. It also appointed an architect at a fee of 1.5 per cent of the sanctioned project cost, and a consultant at a fee of 1.5 per cent of the actual project cost.

The report pointed out that the estimated cost of the project was inflated by Rs 75.91 crore due to the adoption of rates without obtaining competitive rates from the market and the adoption of incorrect rates. As the bids were benchmarked against such inflated estimates and justification statement of rates was also not prepared, it resulted in extra expenditure of Rs 64.60 crore when compared to the actual procurement cost or correct or reasonable rates.

Then there was the irregular substitution of rates to be paid for various items of M-25 and M-30 grade concrete works after the award of work which resulted in an excess payment of Rs 4.02 crore.

UPRNN, in contravention to the provision of the agreement, did not recover any amount from the bills of the construction agency against expenditure incurred of project management consultant, resulting in excess payment of Rs 3.25 crore.

UPRNN did not even deduct the cost of bought out items from the project cost sanctioned by the government for the purpose of calculation of architect’s fee, resulting in the excess payment of Rs 1.49 crore.

It incurred an avoidable expenditure of Rs 2.3 crore because of excess procurement of one transformer, two DG sets and two voltage stabilizers due to incorrect application of power factor for the conversion of demand from KW to KVA.

Further, UPRNN earned an interest of Rs 36.68 crore on government funds during the period 2015-2021, but the same was not deposited in the treasury. It also recovered Rs 13.69 crore as interest on mobilisation advance from the construction agency but did not credit the amount to the government account.

The organisation also violated the orders of the state government as well as its own orders for e-tendering while awarding the work of creation and maintenance of social media platforms.

The Uttar Pradesh State Bridge Corporation Limited participated in the tender process without including GST in their bid price which led to denial of reimbursement of GST claims by the NHAI and the consequential loss of Rs 41.99 crore.

Failure in timely implementation of the National Toll Collection Programme deprived Utter Pradesh State Road Transport Corporation (UPSRTC) of cashback of Rs 14.18 crore on the payment of tolls and led to an avoidable loss to the same extent.

UPSRTC made inadmissible and excess payments of Rs 69.84 crore to a private firm in violation of the conditions of the agreement in implementation of a project of ITMS.

The audit of ‘Procurement and Management of Transformers by DISCOMs’ revealed that contracts to the tune of Rs 44.65 crore were awarded during 2016-17 to 2018-19 to the firms not fulfilling the pre-qualifying conditions. The DISCOMs even failed to enforce price fall back clause which led to an extra expenditure of Rs 1.37 crore.

After debarring a firm for failure of the sample in the quality test, PuVVNL received the supply of 2,429 transformers of 25 KVA valuing Rs 11.19 crore from the firm in violation of tender conditions.

The actual failure rate of distribution transformers installed by the DISCOMs MVVNL, PuVVNL, DVVNL and PVVNL were 20.27, 16.14, 13.92, and 13.28 per cent respectively in the year 2018-19, which was much higher than the norm of two per cent.

There was also short recovery of copper and aluminium from the damaged transformers which was about 72,230 kg and 6,19,497 kg respectively, which resulted in the loss of Rs 8.22 crore for the DISCOMs. Similar is the case with transformer oil, the short recovery of with resulted in a loss of Rs 10.42 crore.

Dakshinanchal Vidyut Vitran Nigam Limited (DVVNL) short recovered regulatory surcharge by Rs 79.90 crore from a distribution franchisee and also suffered loss of interest of Rs 29.97 crore. It failed to ascertain the correct price variation for the extended delivery schedule of distribution transformers which led to excess payment of Rs 2.03 crore to the suppliers.

It did inflated assessment of requirement which led to unwarranted procurement of SMC boxes with a consequential loss of Rs 2.12 crore.

Madhyanchal Vidyut Vitran Nigam Limited (MVVNL) procured SMC boxes valuing Rs 7.25 crore which remained unutilised for over four years.

Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) made avoidable payment of interest of Rs 6.41 crore with a consequential loss to the same extent, due to incorrect estimation of taxable profit.

The state forest divisions made fraudulent payment of Rs 1.37 crore, involving 1,058 payment, mentioning even false registration number of vehicles.

Uttar Pradesh Expressways Industrial Development Authority made excess payment of Rs 3.65 crore on sale deeds at higher rates than approved land rates in Kannauj District.

The Yamuna Expressway Industrial Development Authority made payment of Rs 2.71 crore for the area of land which was not even available on record.

(IPA Service)

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