Shivaji Memorial Project in hot water, CAG report exposes irregularities

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The audit report which was sent to Maharashtra’s Public Works Department in October, was accessed by the Indian Express under the RTI (Right to Information) Act. In its report, as reported by the Indian Express, CAG stated that the state government’s decision to reduce the cost of the project by negotiating with the lowest bidder and changing the scope of work ‘vitiated the tendering procedure and defeated the objective of transparency in tendering process’.

The report further said that introducing change in the scope of work, while negotiating with the lowest bidder, is “tantamount to compromise on transparency, equity and fair treatment to all the participated bidders”.

Undue benefits to third parties

The report also noted that some clauses were deleted while issuing revised work order to L&T which can result in undue benefit to the contractor. The department has done away with a clause that compelled the contractor to execute phase II of the project at the same rates as phase I.

The ‘de-scoping’ of the project, also resulted in undue benefit of Rs. 9.61 crore to the Project Management Consultant (PMC) and additionally caused financial burden of Rs. 20.57 crore on the exchequer. Firms such as M/s Egis India Consulting Engineers Pvt Ltd and Design Associates were appointed as PMC for the project. Basically, the scope of the work of the PMC was reduced by excluding work of surveys, investigation and testing, etc. Ideally, the remuneration to PMC should have been reduced in such a situation, however, the State government approved the previous remuneration of Rs. 82.46 crore and rejected the Public Works Department (PWD) Chief Engineer’s suggestion of paying PMCs Rs. 72.85 crore. Hence, the unexplained undue benefit to the PMC.

No penalty, only incentive

The PWD had also not included a penalty clause in the contract agreement of PMC thus resulting in a more favourable arrangement for them. Ironically there was a clause for incentive for timely completion of work but no penalty for delay in completion of work.

No response from PWD

While CAG sought a response from PWD, it said it had not studied the report yet. As per the report, PWD’s improper planning led to increase in cost of the project by Rs. 81 crore.