Goa causes cost overruns on Japan-funded sewerage project

Prime Minister Narendra Modi may have managed to get a promise of USD 35 billion Japanese investment for India but in Goa revelations by the federal auditor reveal how a sloppy state government squandered Rs 166.37 crore (USD 27 million) due to delays and poor implementation of a water and sewerage project funded by a Japanese government agency.

Panaji: Prime Minister Narendra Modi may have managed to get a promise of USD 35 billion Japanese investment for India but in Goa revelations by the federal auditor reveal how a sloppy state government squandered Rs 166.37 crore (USD 27 million) due to delays and poor implementation of a water and sewerage project funded by a Japanese government agency.

The Comptroller and Auditor General`s report for 2013-14, which was tabled in the recently concluded Monsoon Session of the Assembly, suggests that the Goa government has been additionally burdened with Rs 166.37 crore due to chronic delays in implementation of projects funded by the Japan International Cooperation Agency (JICA).

"The delay in tendering of works under JICA projects resulted in additional burden of Rs 166.37 crore to the state government. Moreover, delays in tender acceptance resulted in additional liability of Rs 69.02 crore due to price escalation," the report says.

The JICA, an independent governmental agency that coordinates official development assistance (ODA), gave the Goa government, through a central government scheme, a Rs. 847.50 crore soft loan for a major water supply and sewerage project aimed at plugging leakages and bringing wasted, non-revenue water into the tax net.

The JICA project includes expansion and augmentation of three water treatment plants, which would cater to both the state`s districts and a population of about 660,000. While the state government, as its part of the bargain, was to provide for taxes, land charges and other costs, the loan was to be repaid over 30 years.

The project has suffered several setbacks and has dragged over years thanks to sloppy management and delay caused by bureaucrats as well as tentative political decision-making.

Auditing the fiscal process and costs for 22 specific packages (among others under the project) estimated to cost Rs 459.85 crore funded by JICA, the CAG said that the inordinate delay escalated the difference between estimated costs and the actual cost of tender to Rs 166.15 crore, which the Goa government will have to foot now.

"The estimated cost of the works was Rs 459.85 crore, which includes cost of the tender and expenditure incurred up to January 2014," the CAG report said.

"As against the estimated cost of Rs 459.85 crore assessed, the accepted tender cost of these packages was Rs 626 crore. The loan amount was limited to Rs 459.85 crore on these packages. The remaining amount of Rs 166.37 crore will have to be met from the state budget," it further stated.

The CAG report further pointed out that while the completion deadline is already past, only 40-60 percent of the work has actually been completed. This delay could further burden the state treasury with Rs 69.02 crore. The CAG has now called for a mid-term review of the project.

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