CHENNAI: A recent Comptroller and Auditor General (CAG) report has revealed huge differences between the fund allocated and used in the construction of ESI Hospitals at Coimbatore, inaugurated by the Prime Minister on Tuesday, and in Patna.
The special audit report dated August 2015 has unearthed variations up to Rs 72.98 crore between rates at which works were awarded to construction agencies by ESIC and cost of works those agencies have given to the sub-contractors.
The report blamed the Corporation for arbitrary award of contracts and selecting locations of hospitals without comprehensive studies. “Lack of due diligence resulted into cost overrun of Rs 3,385 crores,” the report said indicating a colossal waste of public funds.
In 2007, the Corporation planned to establish 13 medical education projects to meet the shortage of medical and paramedical staff in these facilities. The Labour Ministry gave its nod to it in 2010. Following allegations of non-compliance with the General Financial Rules (GFRs) in implementing the medical education projects, the Ministry on November 2014, requested the C&AG to conduct a special audit of 13 ongoing medical college projects.
The CAG report noted that scrutiny of records revealed that instead of 13 medical education projects, ESIC had taken up setting up of 22 projects even before the Ministry gave its approval or the ESIC Act, 1948 was amended to bankroll this whopping Rs 1021.72 crores.
“Out of this, only 14 locations were selected based on the feasibility report and the remaining were arbitrarily selected,” it said.
The report also said that against the Parliamentary Standing Committee on Labour’s recommendation, six ESI hospitals were set up at places which did not have more number of poor working class people and In-Patients (IPs). Neighbouring locations with relatively higher IP position were neglected. The report showed that though an advisor – M Shamsudeen, Managing Director of a private firm – was appointed, records revealed that no assessment was done by him even after his term was extended for nine times incurring a total expenditure of Rs 20.72 lakhs
Contrary to the CVC guidelines of pegging consultants fee to original contract value, in six hospitals including two at Chennai and Coimbatore, fee was capped at the final project cost. In the absence of due diligence, original cost of these projects were revised from Rs 2,618.51 to Rs 3,441.24 crores. Consequently, the ESIC had to pay Rs 24.68 crores more from their savings to consultants, it has been found.
The CAG report indicated that while awarding projects to architectural and engineering consultants, large block of works worth Rs 3,020.09 crores were awarded arbitrarily to a single firm (Design Associates), which did not meet the basic empanelment criteria. Moreover, a huge sum paid to them as consultant fees (Rs 63.39 crores) was not on record. Also, the associates delayed execution of works at all eight projects by two to five years.
“All medical education projects taken up, except two, were behind schedule,” the report added. According to the report, only 14 per cent of the Post Graduate Institute passed out students joined the ESIC hospitals which indicated that the strategy of opening medical colleges for filling up the vacant posts had failed.