The Telegraph
Thursday , January 24 , 2013
Since 1st March, 1999
CIMA Gallary

Loopholes spotted in industrial policy

Bhubaneswar, Jan. 23: The Accountant General (AG) of Odisha has found loopholes in the state government’s industrial policy of signing MoUs with private promoters to set up industries.

It has also stated that the competitive bidding route was, by and large, ignored to set up industries.

The state has so far signed 93 MoUs with various private companies between 2001 and 2012 in many sectors, including steel and mines and power.

Last year, the Comptroller and Auditor General (CAG) had pointed out large-scale irregularities in awarding port sites to private developers.

The AG said that during verification of the industries’ records with Industrial Promotion and Investment Corporation of Odisha Limited and the Odisha Industrial Infrastructure Development Corporation, the government had pursued discriminatory policy at the time of signing the MoUs.

According to the AG, while MoUs were signed with a particular group of industries by the government, some other industries with the same kind of facilities and infrastructure did not find favour with the powers that be. Even though land and other facilities were provided to the second group, no MoUs, which would have brought them significant benefits, were signed with them.

Former law minister and Congress leader Narasingha Mishra said: “We have already smelt rat in the government’s act of indulging in MoU signing spree. Any one will notice the vestige of corruption once he scrutinises the MoUs carefully.”

However, steel and mines minister Rajanikant Singh said: “We will examine the records.”

No record could be provided to the audit officials by the promotion and investment corporation, industrial infrastructure development corporation and the steel and mines department “to the effect that due diligence has been exercised to examine the proposal of promoters and benefit that would be accrued to the state and that would be extended to the particular project proponent before signing the MoUs,” noted the AG.

The AG said neither any competitive bidding was made for selection of parties to set up any particular type of industries, infrastructure projects nor any Request for Proposal (RFP) was issued.

It also found that the government department had not prescribed the extension of validity period of MoU. The validation of MoUs was extended with the approval of the chief minister after one to 20 months of lapse of the MoUs.

The records have also revealed that the corporation had unauthorisedly permitted the promoters for mortgage of allotted land and in eight out of the 19 checked cases, the promoters concerned had mortgaged the allotted land in various banks to avail loans though no such commitment was made in the MoUs.

“Such accordance of land was highly irregular and the department has practically no monitoring on this issue,” the AG said.

Similarly, the government departments conducted no exercise to ascertain the availability of government land to ensure barest minimum acquisition of agricultural land.