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CAG questions Delhi Metro’s quality control, bidding process

CAG questions Delhi Metro’s quality control, bidding process
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First Published: Wed, Feb 18 2009. 11 44 PM IST

 Track record: CAG says DMRC has scaled down testing requirements, with the Metro’s officials not having witnessed the tests, even as testing is in non-accredited labs and there is no preservation of
Track record: CAG says DMRC has scaled down testing requirements, with the Metro’s officials not having witnessed the tests, even as testing is in non-accredited labs and there is no preservation of
Updated: Wed, Feb 18 2009. 11 44 PM IST
New Delhi: It is widely believed to have played a role in Delhi’s continuing love affair with chief minister Sheila Dikshit, who was elected to a third term in office in late December.
Its chief executive is a darling of the media and advises states across the country on building their own mass transit system.
Track record: CAG says DMRC has scaled down testing requirements, with the Metro’s officials not having witnessed the tests, even as testing is in non-accredited labs and there is no preservation of test reports. Ramesh Pathania / Mint
And it ferries around 830,000 passengers across Delhi every day and will soon connect it to satellites Gurgaon and Noida.
Shockingly then, a draft performance audit of Delhi’s Metro railway shows several irregularities.
The key findings of the draft audit of Delhi Metro Rail Corp. Ltd (DMRC) by the Comptroller and Auditor General of India (CAG)—excerpts of which were reviewed by Mint—include “shortcomings and lapses in the systems and procedures” and issues relating to quality control and land acquisition in excess of project requirements in some areas.
DMRC spokesman Anuj Dayal said the company would not “like to comment on this issue”.
India’s urban development secretary M. Ramachandran, whose ministry part oversees DMRC, said it would be improper to comment on the report before it is tabled in Parliament.
This isn’t the first time CAG, which audits the government’s spending and is the constitutionally mandated watchdog of accounts of Central and state institutions, is finding fault with the way an arm of the government has been functioning. In a recent audit, CAG pointed out gaps in India’s air surveillance capabilities, saying that only a little over a quarter of the country’s radars are currently in working condition. In December last year, it pulled up highways regulator National Highways Authority of India for delays in many projects awarded as part of the National Highways Development Programme.
CAG submitted its report to DMRC and the urban development ministry several months ago, but is yet to present it in Parliament because of an ambiguity arising from the corporation’s shareholding pattern, according to a government official, who did not want to be named.
Typically, a CAG report on a government institution is first presented to the administrative ministry of the entity being audited. In DMRC’s case, the administrative ministry is the urban development one. The report is then tabled before the House. Since DMRC is an equal joint venture between the government of Delhi and the Union government, it is not clear whether the report should be tabled first in Parliament or the Delhi state legislature.
Interestingly, one of the findings of the audit is that this “unique administrative model” creates ambiguity in “co-ordination and control” by the government, as well in deciding the right “forum for legislative accountability”.
CAG’s report says DMRC finalized four property leases based on single bids, with the amount realized being only 0-3% over the reserve price, or the minimum price at which bids can be made. The audit attributes the low response to restrictive land use clauses in the allotment letters and “stringent qualifying criteria fixed for the bid process”.
Land development is a major source of revenue for DMRC. For the fiscal year ended March 2007, DMRC earned Rs222 crore from operations, Rs251 crore through real estate development and some Rs68.70 crore from other sources such as consulting.
According to the report, DMRC has leased four plots of land for 90-99 years and nine for 30-50 years.
“Audit analysis of quality control indicated scaling down of testing requirements, non-witnessing of tests by the company’s representatives, testing of materials in non-accredited laboratories and non-preservation of test reports,” the report also says.
To be sure, DMRC has overcome daunting odds—in a country where large infrastructure projects are often delayed for several years due to red tape—to run its first line in December 2002, just four years after it started construction.
The corporation had been in the news lately over a letter written by its managing director E. Sreedharan that pointed out potential problems with the structuring of a metro rail project in Hyderabad, including the extent of land development rights given to the private concessionaire.
The Hyderabad project was awarded to Maytas Infra Ltd, promoted by the family of B. Ramalinga Raju, the former chairman of the fraud-hit Saytam Computer Services Ltd. Maytas is being investigated by several agencies in connection with the fraud.
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First Published: Wed, Feb 18 2009. 11 44 PM IST