65 per cent cost escalation in CWG Village project: CVC

The CVC has found several discrepancies in a DDA project for construction of certain facilities in the Commonwealth Games Village that led to a cost escalation from Rs 38 crore to over Rs 63 crore.

Last Updated: Nov 14, 2010, 11:19 AM IST

New Delhi: The CVC has found several
discrepancies in a DDA project for construction of certain
facilities in the Commonwealth Games Village that led to a
cost escalation from Rs 38 crore to over Rs 63 crore.

According to an internal investigation report, the CVC`s
Chief Technical Examination Wing has also said that the
construction company has flouted government norms related to
testing, purchase and security.

As part of its different development projects, the work
for construction of swimming pool, training hall, fitness
centre and athletic track in the Village spread over 63.5
hectares area was given to Sportina Payce Infrastructure
Private Limited, a consortium of four companies especially
created for the job, by the Delhi Development Authority.

"Sportina Payce Infrastructure Pvt Ltd was the lowest
tenderer with their quoted amount of Rs 64.86 crore which was
67.39 per cent above the estimated cost of rs 38.76 crore...
Negotiations were conducted with the agency and and the agency
reduced their quoted amount to Rs 63,09,67,855 which was 62.77
per cent above the estimated cost and 11.79 per cent above the
justified amount of Rs 56.44 crore.

"As per CPWD manual which is being followed by the DDA
the work can be awarded up to 10 per cent above the justified
cost. Work Advisory Board decided to place the matter before
the Hon`ble LG for acceptance... and work was awarded to
Sportina Payce Infrastructure Pvt Ltd at their negotiated
amount of Rs 63,09,67,855," the report, which was received in
reply to an RTI query, said.

According to the finding, an application was submitted by
a consortium of Payce Consolidated Ltd and Paynter Dixon
Construction Pvt Ltd, Australia, Sportina Exim Pvt Ltd, Mumbai
and Robertson + Marks Architect Pvt Ltd, Australia.

"As per the agreement to establish a consortium, the
consortium members agreed to incorporate a limited liability
company i.e. a Special Purpose Vehicle Company (SPV) in the
name and style of Sportina Payce Construction (India) Pvt
Ltd...”

"But at the time of submitting the tender, a company was
formed as Sportina Payce Infrastructure Pvt Ltd which
submitted the tender and became L1 and finally work was
awarded to them," it said.

"In this company other partners except Sportina Exim Pvt
were not represented at all. Ultimately at site only Sportina
Exim Pvt Ltd was executing the work which does not have
expertise, experience which was considered at the time of Pre
Qualification. Thus undue favour has been shown to agency,"
the anti-corruption watchdog noticed in its report.

"Certain discrepancies were observed in the justification
of rates prepared during award of work which resulted into
higher justified cost," the report read.

Pointing out the irregularities, it said that labour
charges for fixing tiles and calculations of Value Added Tax
(VAT) was calculated twice.

The contractor also did not furnish workmen`s
compensation policy which was a mandatory requirement to
insure at his cost and expense against any damage or loss or
injury which may be caused to any person or property at site
of work, the report said.

At the time of inspection, the CVC officials noticed that
payments were being made without testing of cement concrete
cubes was not being done for seven days strength which gives
the idea of tentative strength of the concrete.

The findings are the part of one of the 16 different
Commonwealth Games-related construction works being carried
out by various departments here. Six of them are being done
by Public Works Department (PWD), three by Municipal
Corporation of Delhi (MCD), two each by Central Public Works
Department (CPWD), DDA, New Delhi Municipal Council (NDMC) and
one by RITES, a Government of India Enterprise.

Prime Minister Manmohan Singh has also appointed a high
level committee under the chairmanship of former Comptroller
and Auditor General V K Shunglu to investigate and report
within three months time its finding on irregularities in the
conduct of the mega sporting event held here between October
3-14.

Besides Enforcement Directorate, Income Tax Department
and CAG are also conducting enquiries into various alleged
financial and administrative lacunae.

PTI