Delay in completion of 15 godown projects due to failure of the Odisha State Warehousing Corporation (OSWC) to settle land disputes, obtaining forest clearance, delay in finalisation of site resulted in A potential revenue loss of Rs4.72 crore towards storage charges, revealed A report of the Comptroller and Auditor General (CAG) of India.
The OSWC had undertaken construction of godowns with 1.125 lMT capacity at 17 locations though the Central Warehousing Corporation (CWC) at an estimated cost of Rs57.98 crore. As per the memorandum of agreement (MoA) signed in August 2010, the CWC was to complete the projects within 10 monthsfrom the date of issue of work order. But by July 2015, the CWC completed only 15 out of 17 projects.
It was observed that in violation of instruction of the FCI issued in August 2010 to finalise the tender within 62 days from the date of issue of tender notice, the CWC delayed finalisation of tender upto 100 days in respect of 11 projects. This was not properly monitored by the CWC.
Even after placement of work order to the contactor, there was a delay of 547 days in commencement of a work due to the failure of OSWC to take timely decision to shift the HT/lT line passing over the site at Deogarh.
Completion of the 15 projects were delayed by 24 to 529 days mainly due to failure of OSWC to settle land disputes, obtaining forest clearance, delay in finalisation of site, which resulted in potential revenue loss of Rs4.72 crore towards storage charges. The balance two projects were not yet started due to non-finalisation of sites by the OSWC.
In seven out of 15 completed projects, though delay in completion was attributable to contractors, penalty was not levied, collected and remitted to the OSWC by the CWC.
However, the State Government, in the exit conferce, assured that the matter would be examined by OSWC and penalty would be collected subject to force majeure clause, said the report.
As per the MoA, the OSWC was to hand over the site/land from encumbrances to the CWC for construction of godowns and to release the contact value to the CWC in phases.
In case of construction of godown of 5,000 MT at Dhenkanal, it was revealed that the OSWC, in January 2011, intimated the CWC to go ahead with tender process without obtaining forest clearance and possession of land for the site. Accordingly, the CWC entrusted the work in November 2011 the work to a contractor at a cost of Rs2.09 crore. But the same was cancelled in July 2012 on the plea of non-availability of site free from all encumbrances despite forest clearance obtained in March 2012. Subsequently, the CWC awarded the work to the same contractor through fresh tender in November 2012 at a higher value of Rs2.62 crore. The gowdown was completed in 2015. Thus, delay in obtaining forest clearance by the OSWC resulted in avoidable expenditure of Rs0.57 crore, including supervision charges of Rs0.04 crore.
Similarly, the OSWC requested in January 2011 CWC to initiate tender procedure for construction of gown at Angul, without taking possession of land and released Rs0.12 crore as advance in April 2011. Though the CWC issued work order in October 2011, the godown work could not be started due to interruptions by the villagers. Subsequently, the project was abandoned. In the meantime, the OSWC further released Rs0.40 crore tro the CWC without ensuring the progress of work. The construction was also not done at the second site due to dense forest and hilly land.
Thus, release of advances without ensuring possession of land and progress of work led to blockage of borrowed funds of Rs0.52 crore with CWC with consequential avoidable payment of interest amounting of Rs0.21crore. Similarly, delay in utilization of completed godowns resulted in loss of potential revenue of Rs1.28 crore and delay/non execution of lease deeds led to avoidable expenditure of Rs0.78 crore.