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CAG Finds Lapses in PWD, KIADB Works

The Comptroller and Auditor General (CAG) of India has come down heavily on the Public Works Department and the Karnataka Industrial Areas Development Board (KIADB) for causing losses worth crores of rupees to the exchequer.

Published: 21st February 2014 09:27 AM  |   Last Updated: 21st February 2014 09:27 AM   |  A+A-

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The Comptroller and Auditor General (CAG) of India has come down heavily on the Public Works Department and the Karnataka Industrial Areas Development Board (KIADB) for causing losses worth crores of rupees to the exchequer. The KIADB alone caused losses to the tune of Rs.104 crore, it said.

The PWD had implemented road works in its Magadi sub-division in a fraudulent manner and the KIADB allotted land to three industrial units at Narasapura Industrial Area in violation of rules, it said.

The report was tabled in both houses of the state legislature on Wednesday. It pointed out serious lapses by the chief engineer, superintending engineer and executive engineer in implementing works worth Rs.250.62 crore in Magadi sub-division in Ramanagaram district during 2011-12.

“There was a total lack of monitoring and supervision by higher authorities during the course of execution of works although the SE/CE were required to regularly monitor and supervise these works. Quality control reports were not available for any of the works claimed to have been executed,” the CAG stated.

The Internal Finance Advisor and secretary also failed to correlate monthly expenditure statements received from subordinate officers with details of works in progress. “The CE allocated grants to the extent of Rs.212.13 crore without prioritising works according to prescribed procedures and did not submit any budget estimates to the government,” the report said, indicting the department officials.

Total grants of Rs.250 crore were allotted for the Magadi sub-division — 27 times the average grants released over the past three years. 

The grants were allotted irregularly by the Internal Financial Advisor and the CE, SE without obtaining a list of works. Fraudulent payments of Rs.1.70 crore were made preparing fake bills, it said.

The entire work was split into 1,311 small works with each estimate below Rs.20 lakh to avoid competitive bidding. In 189 cases, more than one estimate was prepared for the same work leading to fictitious estimates. Surprisingly, 891 of the 1,311 contracts were awarded to just 3 contractors without even collecting the EMD and performance security, it said.

Check measurements were done on a single day by the department officials in 25 to 85 works and bills were paid without obtaining quality control test reports.

It said surprise checks were not undertaken by superior officers.

The inspection team constituted by the department had observed irregularities and recommended recovery of the amount from the contractors as works were neither executed nor identifiable during physical verification.

KIADB Land Fiasco

The CAG report on Karnataka Industrial Areas Development Board’s allotment of plots at Narasapura Industrial Area at a subsidised rate has exposed the loss of Rs.104 crore to the exchequer.

While the government had approved the allotment of undeveloped land, KIADB allotted 128 acres of well developed plots for three industrial units at a concessional rate, thus resulting in a loss of Rs.104 cr. KIADB had incurred an expenditure of Rs.1.10 cr for developing each acre of land.


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