CAG slams BMC for irregularities, mismanagement and callous handling of public funds | Mumbai news - Hindustan Times
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CAG slams BMC for irregularities, mismanagement and callous handling of public funds

Mar 26, 2023 12:20 AM IST

Mumbai: As the city awaits polls to elect a new civic house, a special audit conducted by the Comptroller and Auditor General (CAG) into the Mumbai civic body’s functioning has pointed out serious irregularities in giving contracts and implementing various city projects

Mumbai: As the city awaits polls to elect a new civic house, a special audit conducted by the Comptroller and Auditor General (CAG) into the Mumbai civic body’s functioning has pointed out serious irregularities in giving contracts and implementing various city projects.

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The report on the audit of 12,024 crore work taken up by the Brihanmumbai Municipal Corporation (BMC) has rapped the civic body for callous handling of public funds, lack of transparency, systemic problem and mismanagement while rewarding the contracts related to road, waste management and other projects.

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It has also said that in most of the contracts, the tender process was not followed resulting in benefit to the contractors.

The audit of various projects implementing between November 28, 2019 and October 31, 2022 was conducted by the CAG on the instructions of the state government whose report was tabled in both the houses of the state legislature on the concluding day of the budget session on Saturday.

The audit by the CAG has found several irregularities and flaws on part of the BMC while awarding contracts. In some cases, rules were not followed while in others, the civic body did not invite tender for awarding contracts.

The CAG has observed that two departments of the BMC gave 20 works worth 214.48 crore without tenders, while the works worth 4,756 crore rewarded to 64 contractors could not be executed since no agreement was signed with them.

It has also pointed that due to the non-appointment of the third-party auditor the civic body could not conduct audit of 13 works worth 3,356 crore to check their quality.

The CAG has rapped the BMC for acquisition of 32,395 square meter land in Dahisar reserved as garden, maternity home for 349 crore, at 716% high price than 206 crore finalised in 2011. Encroachment on the land will need additional 77.80 crore for rehabilitation resulting in the loss to the civic body.

It had given the contract for implementation of SAP mechanism for 160 crore and additionally spent 38 crore on maintenance but no services were given by the contractor. It led to a loss to the body. The forensic audit had pointed at the possibility of manipulation, but no action was taken, the report has stated.

Audit observed that BMC awarded 20 works across two departments valuing 214.48 crore without inviting tenders which was against the provisions of the Manual of Procurement of BMC and established vigilance guidelines.

The report has stated that contractor appointed for the construction of two road over bridges at Mahalaxmi Railway station was given undue favour of 27 crore by violating the tender conditions. construction of two flyovers and elevated rotary along the Goregaon Mulund Link Road was delayed for the want of forest clearance resulting in cost escalation to 6,322 crore from 4,500 crore.

The report has stated that Gokhale bridge construction work progressed at snail’s pace due to the lack of coordination between the BMC and Western Railway.

“Against the targeted progress of 75% by spending 66 crore upto October 31, 2022, the contractor could complete 15% work by spending 6.69 crore by December 2022. Additional amount of 9.19 crore was given to pull down the bridge.

It has rapped the BMC for allotting 51 concretisation works of the road without any survey. It led to the benefit of 1.26 crore to the contactors, the report has stated.

The state government had requested CAG on October 31, 2022, for the special audit of 76 identified works costing 12,024 crore, executed by nine departments of the BMC. The contracts related to Covid-19 could not be probed as the civic body invoked provisions of the Epidemic Act 1897 and Disaster Management Act 2005 that give protection to the authorities from following the laid process because of time constraints.

It gave the civic body the leeway from audit of Covid-19 related works worth 3,539 crore and including the process related to 13 jumbo covid centers, five major hospitals, six specialized hospitals, 17 peripheral hospitals among others.

The audit report has also rapped the BMC for its tender for waste to energy project at Deonar dumping ground. The project was allotted to Chennai based MSW Private Limited by reduction the disposal of the waste management to 600 tonnes a day from original proposal of 3,000 tonnes a day.

“The project was expected to generate a minimum 17 million units of power a annum. The project had a design and build period of 40 months and operations and maintenance period of 15 years. The progress of the project in December 2022 was just 10% after awarding the work on August 5, 2022,” it has stated.

Chief minister Eknath Shinde said, “Action would be taken against the officials and people responsible for the corruption. We are ready to probe the works rewarded in other municipal corporations as well.”

The special audit was ordered by the Shinde-Fadnavis government soon after it came to power in June this year by pulling down Uddhav Thackeray-led MVA coalition government.

The report assumes significance in the context of civic polls as the ruling Shinde-led Shiv Sena-BJP alliance is trying to end Thackeray-led Shiv Sena regime in the BMC, one of the richest municipal corporations in India.

Shiv Sena has been ruling the BMC for over 25 years and it has been a major source of power and strength for the Thackeray-led party. The ruling alliance is trying to end Thackeray’s dominance in BMC and by that virtue in Mumbai. The report will used as an ammunition against Thackeray-led party by the ruling alliance in the civic elections and also to attack the Shiv Sena (UBT) politically.

Thackeray faction leader Aaditya Thackeray welcomed the CAG report on the BMC and demanded that the state government must conduct CAG inquiries into the working of Thane, Navi Mumbai, Nagpur, and Pune and Kalyan Dombivli municipal corporations.

“If they (government) have guts, they should order CAG inquiry of other municipal corporation such as Thane, Navi Mumbai, Nagpur, and Pune and Kalyan Dombivli municipal corporations,” said Aaditya. He added that the CAG report is an attempt to defame the Mumbai-BMC and reiterate that CM means “corrupt man.”

The report has also rapped the BMC for the construction of the hostel tower at KEM hospital without the permission of the city collector and resulting in the imposition of the fine of 2.70 crore.

It has stated that the civic body allotted four works related to the Mithi river pollution control to one contractor instead of four different firms. The Malad effluent pumping station work worth 465 crore was given to an ineligible contractor. The malafide intention cannot be ruled out, it has stated.

A top BMC official said that the remarks in the report are draft observations registered by the CAG and most of them get dropped after the hearing by the public accounts committee (PAC) of state legislature. As per the rule, CAG report goes to the PAC which conducts hearing and submits an action taken report on the same.

“These are just the preliminary observations or strictures based on the documents scanned by the CAG. The PAC, which conducts scrutiny of the observations, will summon us to furnish our detailed submission on each one of the observations,” said the official.

“There would be at least a dozen hearings held on this report. We will submit our detailed facts on each one of the observations. Many of the observations are then dropped once the committee is satisfied,” said the official. He did not want to be named as the report was tabled in the legislature.

As the city awaits polls to elect a new civic house, a special audit conducted by the Comptroller and Auditor General (CAG) into the Mumbai civic body’s functioning has pointed out serious irregularities in giving contracts and implementing various city projects.

The report on the audit of 12,024 crore work taken up by the Brihanmumbai Municipal Corporation (BMC) has rapped the civic body for callous handling of public funds, lack of transparency, systemic problem and mismanagement while rewarding the contracts related to road, waste management and other projects.

It has also said that in most of the contracts, the tender process was not followed resulting in benefit to the contractors.

The audit of various projects implementing between November 28, 2019 and October 31, 2022 was conducted by the CAG on the instructions of the state government whose report was tabled in both the houses of the state legislature on the concluding day of the budget session on Saturday.

The audit by the CAG has found several irregularities and flaws on part of the BMC while awarding contracts. In some cases, rules were not followed while in others, the civic body did not invite tender for awarding contracts.

The CAG has observed that two departments of the BMC gave 20 works worth 214.48 crore without tenders, while in works worth 4,756 crore rewarded to 64 contractors, agreements were not executed between the BMC and contractors which means BMC would not be able to take any legal recourse against the contractors if there is any default on the part of contractors.

It has also pointed that due to the non-appointment of the third-party auditor the civic body could not conduct audit of 13 works worth 3,356 crore to check their quality.

The CAG has rapped the BMC for acquisition of 32,395 square meter land in Dahisar reserved as garden, maternity home for 349 crore, at 716% high price than 206 crore finalised in 2011. Encroachment on the land will need additional 77.80 crore for rehabilitation resulting in the loss to the civic body.

It had given the contract for implementation of SAP mechanism for 160 crore and additionally spent 38 crore on maintenance but no services were given by the contractor. It led to a loss to the body. The forensic audit had pointed at the possibility of manipulation, but no action was taken, the report has stated.

Audit observed that BMC awarded 20 works across two departments valuing 214.48 crore without inviting tenders which was against the provisions of the Manual of Procurement of BMC and established vigilance guidelines.

The report has stated that contractor appointed for the construction of two road over bridges at Mahalaxmi Railway station was given undue favour of 27 crore by violating the tender conditions. construction of two flyovers and elevated rotary along the Goregaon Mulund Link Road was delayed for the want of forest clearance resulting in cost escalation to 6,322 crore from 4,500 crore.

The report has stated that Gokhale bridge construction work progressed at snail’s pace due to the lack of coordination between the BMC and Western Railway.

“Against the targeted progress of 75% by spending 66 crore upto October 31, 2022, the contractor could complete 15% work by spending 6.69 crore by December 2022. Additional amount of 9.19 crore was given to pull down the bridge.

It has rapped the BMC for allotting 51 concretisation works of the road without any survey. It led to the benefit of 1.26 crore to the contactors, the report has stated.

The state government had requested CAG on October 31, 2022, for the special audit of 76 identified works costing 12,024 crore, executed by nine departments of the BMC. The contracts related to Covid-19 could not be probed as the civic body invoked provisions of the Epidemic Act 1897 and Disaster Management Act 2005 that give protection to the authorities from following the laid process because of time constraints.

It gave the civic body the leeway from audit of Covid-19 related works worth 3,539 crore and including the process related to 13 jumbo covid centers, five major hospitals, six specialized hospitals, 17 peripheral hospitals among others.

The audit report has also rapped the BMC for its tender for waste to energy project at Deonar dumping ground. The project was allotted to Chennai based MSW Private Limited by reduction the disposal of the waste management to 600 tonnes a day from original proposal of 3,000 tonnes a day.

“The project was expected to generate a minimum 17 million units of power a annum. The project had a design and build period of 40 months and operations and maintenance period of 15 years. The progress of the project in December 2022 was just 10% after awarding the work on August 5, 2022,” it has stated.

Chief minister Eknath Shinde said, “Action would be taken against the officials and people responsible for the corruption. We are ready to probe the works rewarded in other municipal corporations as well.”

The special audit was ordered by the Shinde-Fadnavis government soon after it came to power in June this year by pulling down Uddhav Thackeray-led MVA coalition government.

The report assumes significance in the context of civic polls as the ruling Shinde-led Shiv Sena-BJP alliance is trying to end Thackeray-led Shiv Sena regime in the BMC, one of the richest municipal corporations in India.

Shiv Sena has been ruling the BMC for over 25 years and it has been a major source of power and strength for the Thackeray-led party. The ruling alliance is trying to end Thackeray’s dominance in BMC and by that virtue in Mumbai. The report will used as an ammunition against Thackeray-led party by the ruling alliance in the civic elections and also to attack the Shiv Sena (UBT) politically.

Thackeray faction leader Aaditya Thackeray welcomed the CAG report on the BMC and demanded that the state government must conduct CAG inquiries into the working of Thane, Navi Mumbai, Nagpur, and Pune and Kalyan Dombivli municipal corporations.

“If they (government) have guts, they should order CAG inquiry of other municipal corporation such as Thane, Navi Mumbai, Nagpur, and Pune and Kalyan Dombivli municipal corporations,” said Aaditya. He added that the CAG report is an attempt to defame the Mumbai-BMC and reiterate that CM means “corrupt man.”

The report has also rapped the BMC for the construction of the hostel tower at KEM hospital without the permission of the city collector and resulting in the imposition of the fine of 2.70 crore.

In the Mithi river case, the civic body allotted two of four works to one contractor instead of allotting them to four different firms to complete the project in a time bound manner. The Malad effluent pumping station work worth 465 crore was given to an ineligible contractor. The malafide intention cannot be ruled out, it has stated.

A top BMC official said that the remarks in the report are draft observations registered by the CAG and most of them get dropped after the hearing by the public accounts committee (PAC) of state legislature. As per the rule, CAG report goes to the PAC which conducts hearing and submits an action taken report on the same.

“These are just the preliminary observations or strictures based on the documents scanned by the CAG. The PAC, which conducts scrutiny of the observations, will summon us to furnish our detailed submission on each one of the observations,” said the official.

“There would be at least a dozen hearings held on this report. We will submit our detailed facts on each one of the observations. Many of the observations are then dropped once the committee is satisfied,” said the official. He did not want to be named as the report was tabled in the legislature.

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  • ABOUT THE AUTHOR
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    Surendra P Gangan is Senior Assistant Editor with political bureau of Hindustan Times’ Mumbai Edition. He covers state politics and Maharashtra government’s administrative stories. Reports on the developments in finances, agriculture, social sectors among others.

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    Faisal is with the political team and covers state administration and state politics. He also covers NCP.

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