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J&K violates CVC Code in Baglihar, Sawlakote projects: CAG

Indicting J&K Government for giving undue financial benefits to various Contractors of Baglihar and Sawlakote hydro electric power projects, country`s auditor CAG has pulled up the government for violating Code of Conduct of CVC.



Jammu: Indicting Jammu and Kashmir
Government for giving undue financial benefits to various
Contractors of Baglihar and Sawlakote hydro electric power
projects, country`s auditor CAG has pulled up the government
for violating Code of Conduct of the CVC.
"We have observed that in contravention of the guidelines
of CVC the company (Power Development Corporation) had granted
interest free advance of Rs 405.60 crore to the contractor
executing hydro mechanical works of Baglihar project Phase-I,"
The Comptroller and Auditor General of India (CAG) said in its
report for the year ended on March 31, 2010.

It paid Rs 162.24 crore in April and December 1999 and Rs
81.12 crore in July 2000 to the Contractor of Baglihar
project, the report said.

The National Conference-led state government had allotted
a contract of 450-MW power project to J P Industry in 1999 on
turnkey basis in state sector at an estimated cost of Rs 3,495
crore and project under went revision in 2004, 2008 and 2009
and final cost was worked out Rs 5,827 crore.

Similarly, Rs 40 crore were paid in August, 2002 to the
contractors of Baglihar project which was pending for
adjustment till June, 2010, the report said.

"This resulted in huge interest losses to PDC of J&K
government besides passing of undue financial benefits to the
Contractors in violation of the CVC code," the CAG report
said.
The CVC prohibited payment of interest free advances to
the Contractors engaged for the implementation of the project
from 1999 to 2004, it said.

The management of the PDC stated in June, 2010 that
advances were granted to the contractors of Baglihar and
recovered later from the contractors in line with contractual
stipulations, the report said.

It, however, assured that mobilisation advances, if
allowed in future, shall be paid keeping in view the
recommendations of CVC in this behalf, it said.

Not only this, J&K Government also paid to the
contractors of Sawlakote hydro electric power project for
construction of 18.5 km long external access road in
September, 2002 without any interest, it said.

The government had granted construction of 18.5 km of
external access road to contractors of Sawlakote
hydro-electric power project in July, 2002.

Despite advance payment of Rs 27.40 crore to the
contractor, the work was started only in 2004, it said, adding
only 55 per cent of the work have been completed as on March,
2001.

Due to delay in work and renegotiations, there was a huge
loss of Rs 6.39 crore to the PDC and this also jeopardise the
starting of the main project.

PTI

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