New Delhi: Even while the government is seeking public-private-partnership (PPP) in railways, the Comptroller and Auditor General (CAG) in its report has found faults in such projects.
The CAG has maintained in its report that railways failed to adhere to the standard procedures and rules in execution of PPP projects in selection of private players.
The CAG report on railways was tabled in the Parliament on Friday. It noted that faulty assessment was made on internal rate of return (IRR), project approvals were marred by delays and there was lack of any monitoring mechanism for these projects.
Citing the examples of Viramgam Mahesana Private Ltd (VMPL), a gauge conversion project between Viramgam and Mahesana to cater to the defence requirement, the CAG noted that the approval of Finance Ministry was not taken for build operate and transfer (BOT) mode of payment of access charge.
It added that the project sustained loss despite estimated internal rate of return (IRR) of 22 per cent. It found that the annual earning of the project was ' 6.45 crore against the annual access charge payment of Rs 15.94 cr.
The audit body claimed that the railways did not formulate any model agreement for execution of the projects within the stipulated time frame. It also stated that the railways did not adopt the model prescribed by the Planning Commission for PPP projects in infrastructure sector.
The top auditor also slammed the railways for lack of a model concession agreement, a framework of contract that sets terms for incentives and targets for the private player. Railways did not formulate model concession agreement for PPP projects, it noted.
CAG pulls up IAF over MiG-27 upgrade project
The CAG on Friday pulled up the IAF for an “unfruitful” expenditure of Rs 155 crore for developing an Electronic Warfare system aimed at enhancing capability of the Russian-origin MiG-27 fighter aircraft.
The government auditor, in its report to the Parliament, said the India-Israel joint venture to develope the system Takshak was ‘injudicious’ as it was sanctioned in 2009 by the force despite knowing that the MiG-27s would start getting phased out by 2016.
“Due to injudicious decision, the objective of enhancing operational capability of a fighter aircraft could not be achie-ved. An expenditure of '155.79 crore was rendered unfruitful,” it said.
The defence ministry had accorded sanction for the Rs 311 crore project to be developed by 2011 “to enhance the operational capability of fighter aircraft and strengthen electronic warfare industry”.
The report stated that despite delays in the programme, the IAF found that it was not fully developed and could not meet a large number of technical specifications.
