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Andhra Pradesh - Hyderabad Printer Friendly Page   Send this Article to a Friend

‘MAUD lapses led to revenue loss'

Special Correspondent

CAG faults awarding of ORR, Expressway contracts


Highlights deficiencies in the bidding procedure of the Outer Ring Road project

Non-adherence of tender by HMDA benefitted a contractor by Rs. 239.88 crore


HYDERABAD: The State government has suffered revenue losses in the execution of some of the major projects taken up by the Municipal Administration and Urban Development department.

The department did not consider the post tender reductions in the quantity of work executed by the contractors and failed to incorporate necessary safeguards resulting in losses to the exchequer.

The failure to incorporate clauses pertaining to changes in work quantity resulted in undue benefit of Rs. 86.67 crore to contractor who was awarded the Elevated Expressway Corridor works.

Coupled with this was the non-adherence of tender conditions by the Hyderabad Metropolitan Development Authority benefitting a contractor to the tune of Rs. 239.88 crore.

Causing further dent were deficiencies in the bidding procedure of the Outer Ring Road project that led to award of work to contractor who quoted Rs. 23.68 crore higher than the lowest bidder.

The lapses in the procedures followed for awarding the contracts were revealed by the Comptroller and Auditor General of India in its report tabled in the Assembly on Tuesday. The CAG said post tender reduction in quantities of work on EEC reduced the expenditure to Rs. 278.96 crore, but provision for payment of Rs. 362.42 crore to contractor was made without considering the changes. The HMDA which auctioned land in Miyapur and Kokapet allotted 23.55 acres to Mantri Developers and another 75 acres to DLF Home Developers Limited for a consideration of Rs. 168 crore and Rs. 751.5 crore respectively. The companies were to pay 25 per cent of the amount as initial deposit and the balance within 30 days failing which the initial deposit and earnest money deposit were to be forfeited.

The two companies failed to pay the total sale consideration in stipulated time and their deposits amounting to Rs. 239.88 crore were to be forfeited, but the clause was not enforced causing revenue loss of Rs 239.88 crore.

Process faulted

The CAG faulted the procedure adopted in finalising the bidders for package-II of ORR Phase-I where the work was awarded to Continental Engineering Corporation, Taiwan which quoted Rs. 295.09 crore while the lowest bid of Rs. 271.41 crore was made by Corporation Transstroy OSJC, Russia.

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