CAG report on MPRDC: Rs 137.98 crore paid as early completion bonus even before projects finished

The MP Road Development Corporation gave financial favours to the contractors causing huge losses to the state coffers, said the report of Comptroller and Auditor General (CAG). The Corporation paid early completion bonus of Rs 137.98 crore to the construction companies, without getting the project completed, said the CAG report pointing at the financial and procedural irregularities.

Flagging the non-transparent planning process, the report said that the corporation had appointed the three consultants for conducting the feasibility studies. They were asked to hand over the report within 150 days, but none of the consultants submitted the study in set time. While some came up with their report four months late, a few even 23 months.

Interestingly the Corporation made the agreement of 10 projects - which included construction of 20 roads under the Build Operate and Transfer- , in 13 to 188 days before the final report was submitted. The incident indicates opaque planning process which created doubts on transparency, the CAG report said.

The Corporation also adopted the report without verification, the consultant ignored the forest area and projected the high traffic projections. Relying on the report, the Corporation designed project on toll mode, which leads the tender failure. Later the Corporation had to adopt the toll plus annuity project, and the project delayed to 22 months.

The Corporation had selected under qualified construction companies, as a result for five out of 12 terminated project - only one company was responsible.

The MPRDC also appointed the private CA to evaluate the technical bids, which led to termination of one project and undue delay of another. The Corporation had failed to recover Rs 53.84 crore from the construction companies which had delayed in completing the work regaining from two months to 52 months.

The Corporation had paid early completion bonus of Rs 137.98 crore to the construction companies. If the company had adopted scheduled completion period of 550 days as per MCA the early completion bonus payable to 11 projects comes to only Rs 47.18 crore. The amount is paid on 11 projects which had constructed 17 roads before the scheduled completion period of 730 days.

The Corporation entered into an agreement with the companies for development of roads under BOT mode with schedule completion of 730 days, instead of stipulated 550 days as per Model Concession Agreement.

The provisional completion certificate was issued by the Independent Engineer (IE) without ensuring the completion length, of carriageway, construction of major, minor bridges, widening of minor bridges, work of bituminous concrete, side shoulders, protection work of bridges.

The Corporation had given undue financial benefit to the construction companies which were involved in 5 projects. The Corporation paid Rs 75.18 crore without ensuring construction of essential components of roads.

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