The Comptroller and Auditor General of India (CAG) has rapped the State Government for showing undue favour to contractors of the 1,219 km-long South-North Road Corridor in the State connecting Andhra Pradesh border to Jharkhand border.
Notably, development of South-North Road Corridor (part of Vijayawada to Ranchi route which starts in Andhra Pradesh (236km), passes through Odisha (1,219 km) and ends in Jharkhand (177 km), was taken up from 2007-08 with the objective of socio economic development of the tribal areas and combat extremism in the bordering districts of the State.
Odisha portion of the road project comprises 239.30 km of National Highway (NH) and 979.70 km of State Highway, major district roads and other district roads. As a part of relief, the Centre approved development of 600 km out of the 979.70 km of the route in the State by March 2014 at a likely cost of `1,200 crore.
A report of the CAG on economic sector for the year ended March 2013 said the Works Department of the State is responsible for the execution of the road project, but the State succeeded to complete only 33 per cent till March 2013 though it was scheduled to be completed by March 2014.
The report said that shortfall in achievement was mainly due to default in execution by the contractors. Ten projects sanctioned by the Centre for `1,194.98 crore for development of 639.95 km targeting completion by March 2014 progressed only 53.11 km (eight percent) and none of them was completed (June 2013).
Four of them stipulated to improve 304.80 km roads in the bordering districts of Koraput, Rayagada, Malkangiri and Gajapati were either abandoned by contractors or were not commenced, it said.
The report clearly stated that non adherence to the agreement conditions and deficiencies in management of contracts caused loss to the Government. Inaccuracies and discrepancies in rates of various items resulted in undue benefits to the contractors, it added.
In case of default in execution, the report said, employer could terminate the contract at the cost and risk of the contractors with levy of penalty for 20 per cent of the value of the work not completed.
Despite issue of repeated warnings, contractors in 20 works did not execute works as per the programme. As against recoverable dues of `36.52 crore, the Executive Engineers (EEs) recovered or withheld `4.93 crore from the contractors and the balance amount was not recovered. Only `3.10 crore was recovered from the contractors after rescinding contracts which was very low, the report added.
Besides, the State paid excess amount to the contractors and also extended undue benefit of `6.72 crore for 24 projects for execution of earthwork though it was not in the provision of bidding process.