Shunglu panel slams CAG official for irregularity

Last Updated: Friday, August 12, 2011 - 20:58

New Delhi: A senior official of the CAG,
which had prepared a report on the Commonwealth Games
malpractices, is himself under the scanner of a High Level
Committee that went into the irregularities of the mega
sporting event.

In its report submitted to Prime Minister Manmohan Singh,
HLC headed by former Comptroller and Auditor General VK
Shunglu has said that R S Mathrani, presently Director General
in the CAG, has followed an "arbitrary" procedure to select
Engineers India Limited (EIL) as project management consultant
during his tenure as Finance Officer in Delhi University.

Interestingly, Mathrani has contributed to CAG`s report
on Commonwealth Games irregularities which indicted Delhi
Chief Minister Sheila Dikshit and certain officials of her
government.

According to the report, in one of its notes Mathrani
recorded that EIL would be invited to make a presentation to
the Works Advisory Board and, if found suitable, price
negotiations would be carried out to finalise the consultancy
fees.

"If EIL is not found suitable then other PSUs would be
invited to make a presentation," it said.

"Having such a condition for selection of agency clearly
demonstrates that other identified agencies were not offered
equal opportunity to be selected. EIL was given preference
over others by inviting them to make presentation to Work
Advisory Board.

"No opportunity was given to other agencies -- Rites
Limited & Engineering (Projects) India Limited-- to make
similar presentations," the Shunglu panel pointed.

The Committee felt that the consultancy fee of Rs 23
crore to EIL was very high and unjustified.

The contracted fee of M/s EIL was Rs 23 crore (9 per cent
of Rs 255 crore) and additionally International Architect was
also paid Rs 2.88 crore. Thus, total consultancy fees paid was
Rs 26 crore which is 10 per cent of total project fees.

"HLC feels that the consultancy fees of 10 per cent is
very high and proper consideration should have been given to
other alternatives before awarding the contract to M/S
EIL at such a high cost," the report said.

Based on Mathrani`s recommendation, University Engineer
sent a letter to M/s Engineers India Limited informing them of
their appointment vide letter dated May 14, 2007. "The
procedure was highly arbitrary, selective & unethical," the
High Level Committee said.

The Committee, questioning Mathrani`s decision, said that
"no details were available on record for initial estimate
of Rs 100 crore by Delhi University which was revised to Rs
224.27 crore by EIL. Further no supporting documents/detailed
analysis of rates was available based on which estimate
for Rs 224.27 crore was prepared by EIL," it said.

"HLC is of the view that appointment of EIL was not
transparent & justified," the report read.

"An internal email note was found during the review in
which the EIL Project Manager acknowledged the fact that M/S
EIL was having a profit of over 50 per cent on the total
consultancy fees paid by DU for the work. This clearly
demonstrates that the fee paid to EIL was unjustified," the
report said.

The Prime Minister had in October last year formed a High
Level Committee under the chairmanship of former CAG V K
Shunglu to find out alleged irregularities in executing
Commonwealth Games held here in October 3-14, 2010.

PTI



First Published: Friday, August 12, 2011 - 20:58

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