Delhi govt flouted rules in some CWG projects: CAG
The Delhi government flouted rules by adopting CPOH of 37.5% for construction of seven road and flyovers during Commonwealth Games , the CAG said
August 05, 2011 / 21:36 IST
The Delhi government flouted rules by adopting CPOH of 37.5% for construction of seven road and flyovers during CAG 2010 leading to increase of cost by Rs 352 crore and awarded works to companies in an "irregular" manner with regard to two projects, the CAG has said.
In its report on the Commonwealth Games, the top auditor has rapped the city government for executing two projects worth Rs 51 crore and Rs 11.63 crore respectively without tendering.Selecting seven works of road and flyovers for its audit out of the total 25 such projects executed, the CAG said they adopted Contractor's Profit and Overhead Charges (CPOH) of 35 per cent in contrast to CPOH of 15 per cent stipulated by CPWD."This resulted in increasing the justified cost, worked out by the department after opening of the financial bids, by Rs 352.47 crore. A higher CPOH leads to a higher cost baseline for potential bidders," the report said.The CPOH rate also forms an indirect input into the process of preparation of justified costs, where required, and the assessment of reasonableness of rates for final award of the contract, the report said.The seven projects selected for detailed review are Raja Ram Kohli Marg flyover, Ghazipur flyover, Barapulla elevated road, UP Link road, corridor improvement on ISBT-Anand Vihar road, Ring Road and a flyover by DDA on NH-24 and they involved a cost of Rs 2,239.40 crore.Calling the "de facto use of CPOH rate of 37.5%" as "inappropriate", the CAG asked the Delhi Government to carry out an in-depth study of the actual elements of overhead involved and practices followed in other states."There was irregular award of work in two projects where L-1 was determined by considering separate letters quoting a lump-sum amount, while use of correction fluid in tender documents and large number of cuttings/corrections were seen in another bid," the report said.CPWD manual prohibits the use of correction fluid anywhere in tender documents and, if used, such tender is liable for rejection."We found that the bid documents of Simplex Infrastructure Limited who was awarded the work of Ring Road bypass had 12 cuttings/corrections, besides three cases of use of correction fluid for changing the figures, having an impact of increasing the bid amount by Rs 6.23 crore," it said.The CAG also found non-compliance with quality standards in Barapulla elevated road. It also found out that steel used in the Ring Road byepass road project did not conform to the standards.The report said a loss of Rs 3.55 crore was caused due to incorrect estimation in the elevated road over Barapullah Nallah."The work for construction of two arch-foot over bridges was awarded to P&R Infra Projects Limited at a tendered cost of Rs 10.35 crore to facilitate the public to reach JLN stadium during CWG," the report said.Given the limited amount of time available for the Games, it may have been better for the PWD to stick to the tried and tested method of FOB construction.However, the PWD decided to use an imported suspension system (Macalloy make) in spite of the fact that a suspension bridge with a similar suspension system had collapsed in Glasgow in 2008, the report said."Instead of awarding the design consultancy work to specialised agency having the experience in related field, the work was awarded as extra item to the consultant for the main work (Tandon Consultancy)," the report said. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
