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CAG pulls up govt for mortgage benefit

- Opposition wants CBI probe as report says Idco move helped industrial houses
Auditor-general Amar Patnaik and (right) principal auditor general Sunil Srikrishna Dadha release the CAG report on Odisha’s general and social sector for 2011-2012 in Bhubaneswar on Monday. Telegraph picture

Bhubaneswar, June 24: The latest report of the comptroller and auditor general (CAG) of India has pulled up the Naveen Patnaik government for allowing industrial houses the liberty to mortgage state land without making any sizeable investment in Odisha.

Industrial houses have secured loans worth Rs 52,423.50 crore by mortgaging land leased out to them by the state government in gross violation of rules, the latest CAG report, which was placed in the Assembly yesterday, has stated.

Seizing the opportunity, the Congress and the BJP came down heavily on the Naveen Patnaik government and demanded a CBI probe into what they described as a mega scam.

Senior Congress MLA Chiranjeeb Biswal said: “Only a CBI probe will expose the corruption in land allotment.” BJP MLA Basant Panda was prompt to echo Biswal’s demand.

Hitting back at the CBI probe cry, BJD leader Amar Satpathy said that the report was not final.

The report will be placed before the public accounts committee of the Assembly, which is usually headed by the leader of the Opposition. This time, Congress leader Narasingha Mishra will head the PAC, which will scrutinise the report.

The report points out that the Industrial Development Corporation of Odisha (Idco), the nodal agency for distributing land to industrial houses, erroneously conferred mortgage rights in the lease deeds executed with 52 industries that had signed MoU with the government and another 54 that had no such deal with it.

The report pointed out that Idco had erred in issuing “no-objection certificate” to 26 industries for mortgaging 13846.238 acres of land to raise loans from financial institutions.

“Loans of Rs 52,434.50 crore was sanctioned by financial institutions in the case of 12 promoters of MoU based industries, for mortgage of 8,489.828 acres of allotted land,” the report stated.

While acquiring 29,769.482 acres of private land for industries, the state government undertaking did not even consult district agriculture officers.

Interestingly, the allotted 11,447.449 acres remained unutilised for two to five years with none of the industries that got the land commencing commercial production. Around 685.951 acres of land remained untenanted for three to 30 years. The state government has made no attempts to reclaim this land.

The CAG has found that Idco, which is in charge of acquiring land from private individuals and government agencies, has not followed any guidelines while making acquisitions. “Idco was acquiring land and allotting it without framing any regulations even after the lapse of 33 years,” the report said.

The CAG report hit out at the government for ignoring even essential requirements such as environmental clearance while acquiring and allotting land. In some cases, even forest land had been allotted to the industrial houses without the mandatory approval of the central government.

Power purchase agreement

The power purchase agreement of the government with independent power producers has also come under the CAG’s scrutiny. Gridco, the state designated agency, signed power purchasing agreement with independent power producers for generating 39,010 mega watt of power by 2016-17 against an estimated requirement of 6,362 MW without corresponding arrangements for evacuation of power. The agreements were signed in violation of the Electricity Act, 2003. Significantly, while Gridco did not collect its dues from the power distribution companies, it borrowed Rs 4,505.22 crore to reimburse the cost of power purchased from the generating companies. The report said that the distribution companies owed a staggering amount of Rs 3,372.29 crore to Gridco by the end of June, 2013.


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