Jalayagnam: PAC objects to cut in interest

HYDERABAD: The Public Accounts Committee has raised serious objections to the reduction of interest rate on mobilisation advances given to contractors of irrigation projects under Jalayagnam.

Published: 18th April 2012 03:39 AM  |   Last Updated: 16th May 2012 07:36 PM   |  A+A-

HYDERABAD: The Public Accounts Committee has raised serious objections to the reduction of interest rate on mobilisation advances given to contractors of irrigation projects under Jalayagnam. The committee, which met here on Tuesday to review the Jalayagnam works, also found fault with the irrigation department for not constituting a high-level committee to supervise the Krishna and Godavari delta modernisation works.

TDP MLA Jaipal Yadav chaired the meeting in the absence of committee chairman Revuri Prakash who did not make it due to personal reasons.

Members Devineni Umamaheswara Rao and K.Kanna Babu wanted to know whether the interest rates on mobilisation advances were reduced from 12 per cent to 8 per cent. They alleged that the government reduced the rate to benefit the contractors thought it would cause losses to the government.

As there was no concrete reply from the irrigation officials, the committee asked the officials to furnish project-wise details of mobilisation advances and the rate of interest on the advances.

The government gives 10 per cent of a project’s cost as mobilisation advance to the contractor. After the completion of the work, the contractor should return the advance to the government with interest.

The members also expressed displeasure over inaction on the objections raised by the CAG on the Kalwakurthy and Pulichintala projects.The PAC will meet again on May 14 and 15 to review Jalayagnam.

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