VIJAYAWADA: State Legislative Houses’ Public Accounts Committee (PAC), chairman, Mr Buggana Rajendranath Reddy suspects that the state government had shown favouritism to the contracting firm that had executed the Pattiseema Lift Irrigation project.
Talking to reporters after reviewing the CAG reports of 2015-16 on lift irrigation projects and finances of the state for two consecutive days, Mr Reddy on Wednesday observed that the government could have avoided an additional expenditure of Rs 400 crore to Rs 450 crore spent on Pattiseema project at a time when the state was reeling under severe financial crisis and every penny was important.
He questioned the rationale behind the government’s sanctioning of the escalated project cost by almost 22 per cent when there was a rule that came into effect in 2005 that stated that no EPC contractor should be given cost escalation that was more than 5per cent. Mr Reddy told reporters that he did not understand why the rule was exempted for this one particular project.
“Considering these factors, there is a feeling that the government showed favouritism to the contactor of Pattiseema project. CAG had pointed out that Rs 100 crore excess amount had been spent on constructing the intake well when Rs 40 crore of excise duty and labour cess could have been avoided. As per estimations prepared by two reputed contracting firms arranged by two time MP Mr Vundavalli Arun Kumar, motors could be bought for less than Rs 100 crore. End of the day the fact remained that these motors are of Chinese make,” said Mr Reddy.
The chairman of PAC also raised an alarm over the increasing public debt which had risen by at least Rs 1.2 lakh crore by October last year after the state was divided. Mr Reddy predicted that the debt would rise by another Rs 20,000 crore by March this year....