The Telegraph
Sunday , December 16 , 2012
Since 1st March, 1999
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State draws CAG ire for norms violation

Bhubaneswar, Dec. 15: The Comptroller and Auditor General has rapped the state government for undertaking development of minor ports in the state violating various norms.

In its latest report, the CAG has pointed out that the state government did not constitute the Odisha Maritime Board, a body envisaged under the Port Policy 2004.

In the case of four of the five ports under question, though the project cost exceeded Rs 500 crore, the concession agreements were executed without the required approval of the High-Level Clearance Authority.

The report also pointed out that of the five ports — Astaranga, Chudamani, Dhamra, Gopalpur and Subarnrekha — the competitive bidding route for the selection of private promoter was followed only in the case of Gopalpur.

“The views of the law department to go for competitive bidding as the same would be legally tenable and would ensure maximum participation and fair selection process, was ruled against. In the case of Gopalpur, a developer with no experience in infrastructure sector was selected and the revenue sharing was accepted at 0 to 7.5 per cent which was below the reserve percentage of five to eight,” said the report.

Significantly, the CAG noted that as the selection of developers for Astaranga, Chudamani and Subarnrekha ports were not routed through either the High-Level Clearance Authority which is headed by the chief minister or the Empowered Committee on Infrastructure chaired by the chief secretary, neither the issue of selection nor uniformity in concession agreements and timely execution of projects could be properly examined.

Besides, delay in obtaining environmental clearance resulted in delay in the execution of projects.

In the case of Dhamra port, the commencement date was fixed after 13 months of the due date on the ground of delay in handing over of acquired land though the delay was attributed solely to the developer as land acquisition process in 66 villages lapsed because of non-payment of the compensation cost as well as delay in taking over possession of the acquired land by the developer despite repeated requests.

“This led to an extra expenditure of Rs 30.86 crore. Because of the delay in execution of Dhamra port, the government was deprived of revenue share of Rs 99.26 crore,” said the report.

It further pointed out that the provisions of the model concession agreement prescribed in January 2008 by the Planning Commission was not followed though the public-private partnership cell of the planning and coordination department treated it as a guiding document for preparation of such agreements.

Similarly, the concession period of three ports was allowed to be 34 years against the recommended 30 years in the model concession agreement and that, too, without analysing the investment proposal, volume of traffic trend projections, operation and maintenance costs, revenue inflow, return on investments and the expected breakeven period.