Hyderabad: Thanks to undue favours done by the state government, contractors have benefited by crores of rupees, according to the CAG. The CAG tested three cases for its report on the economic sector and found that contractors had got about Rs 40 crore. The CAG report was placed in the Assembly on Wednesday.
The CAG said the government had made undue benefit to the contractor of CAG report of about Rs 8.24 crore. While inviting bids, the irrigation department prepared an estimate by considering the length of canal to be excavated at 23 km. The contractor later found that the canal could be 18.975 km long by an alternative alignment that avoided some curves.
The contractor’s proposal was approved by the department and the canal work was executed accordingly. Thus, there was a post-tender reduction in the length of canal of 4.025 km, the value of which worked out to Rs 8.24 crore. The CAG said the department did not reduce the agreement value as the contract did not provide for adjustment of contract price. The CAG said the government made additional payment of Rs 5.19 crore to the contractor for controlled blasting instead of open blasting.
In another case, the CAG found that the government had passed on undue benefit to the contractor of Krishna delta irrigation and drainage system.
The CAG said that as per the tender and original agreement conditions, the prices quoted by the bidders were inclusive of VAT at the rate of 2.8 per cent. Post-tender alteration to the agreement clauses resulted in unwarranted financial commitment of Rs 12.12 crore (2.8 per cent VAT on the total value of Rs 433 crore). Out of this, Rs 9.32cr has been passed on to the contracting agency resulting in undue benefit to it.
