CAG: PWD makes 8 crore excess payment to contractor

Kohima, April 9 (EMN): The Public Works department (Roads & Bridges) of Dimapur has made an excess payment of Rs.8.01 crore to a contractor for upgrading the Dimapur-Niuland road by arbitrarily raising the rates of items of work.
This was revealed in the report of the Comptroller and Auditor General of India (CAG) for the year ended 31 March 2016, which was presented in the state Assembly recently by the Chief Minister Dr. Shürhozelie Liezietsu.
The CAG report stated that the Ministry of Development of North Eastern Region (DoNER) had, in 2010, sanctioned an amount of Rs.29.41 crore for upgrading the Dimapur-Niuland road to a ‘major district road’ covering a distance of 28 Km under Non Lapsable Central Pool of Resources (NLCPR) and accordingly, the PWD awarded the work to a M/s National Construction at the same amount, at par with the NPWD Schedule of Rates (SOR) 2008.
The report states that as per clause 12 of the terms and conditions of the contract, no price escalation or enhancement of rate was to be allowed.
On examination of records of the executive engineer (EE) PWD (R&B) in November 2015, the CAG detected that the EE PWD (R&B) Dimapur division submitted (14 July 2011) a proposal for revision of the estimate of the project cost to Rs.39.90 crore nine days before actual date for completion of the work (23 July 2011) on grounds of variation in quantities of work during execution.
Subsequently, the value of the work was reportedly enhanced through a corrigendum issued (21 July 2011) by the chief engineer PWD (R&B) and the said contractor was paid Rs.39.90 crore in four instalments – in October 2010, March 2011, December 2011 and March 2015.
However, on detail examination of revised Bill of Quantity (BOQ), the CAG observed that the quantities in respect of three items of work were increased while the quantities of six items of work were reduced.
“The revised project cost for the revised quantity of work as per original approved rates works out to Rs.31.89 crore. However, it was noticed that in the revised BOQ the rates of three items (Granular Sub Base, Water Bound Macadam Gr.II and III) was arbitrarily increased by Rs.960 each over the approved SOR. As a result, the project cost was increased to Rs.39.90 crore and the amount was accordingly paid to the contractor,” the CAG report says.
The audit pointed out that thus, the department had flouted the terms and conditions of the contract by enhancing the rates of three items of work above SOR, resulting in excess and inadmissible payment of Rs.8.01 crore to the contractor.
The CAG stated that the state government’s reply to the anomaly in August 2016 mentioned that the project cost was revised as per the revised BOQ and measurement as well as the bills was prepared taking those aspects into account. However, the CAG report underscored that the government was silent on how the rates of three items of works were enhanced arbitrarily.