HP Govt under recovered Rs 22.57 Cr : CAG

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Image used for indicative purpose only. Source: Internet

Shimla, Mar 15
Himachal Pradesh Government affected under-recovery tune to 22.57 Cr as it could get back only 6.72 crore in 798 cases pending in different depts during 2019-20 against recovery of Rs 29.29 Cr in total 1,436 cases in the previous year, stated the report of the Comptroller and Auditor General for the year ending Mar 31, 2020.
Chief Minister Jai Ram Thakur who holds the portfolio of Finance tabled the CAG report on the Compliance Audit of Social, General and Economic Sectors in the state assembly on the last day of the budget session on Tuesday. The report said that DDOs concerned had accepted recovery of Rs 28.11 crore in 1,395 cases which showed the under-recovery of tunes to Rs 22.57 Cr in 2019-20.
The report pointed out that after the introduction of Goods and Service tax, the Himachal Pradesh Power Transmission Corporation Limited revised the contract price of Lahaul Sub Station, Chambi Sub Station, Sunda-Hatkoti Substation or Urni Sub-Station. This led to an overpayment of Rs 24.57 Cr in contravention of the provisions of the contract.
The CAG report said that the Company released retention money to a contractor prematurely, instead of retaining it till the successful completion of the contract, which led to a loss of interest revenue. The contractor for the construction of Lahal sub-station, intimated to the Company in May 2019 that he was under tremendous pressure due to bad cash flow for the contract and requested for release of interest-free retention money against bank guarantee. “Although the payments were being released to the contractor on time, the Company invoked the bid clause and released retention money of 18 crores against bank guarantee on 20 June 2019, and Rs 3.13 Cr again on 27 December 2019.,” stated the CAG report. As per the bid clause, the contractor was eligible for release of retention money against the bank guarantee for reasons attributable to the Employer, and not due to bad cash flow to the contractor. Therefore, the release of 10 per cent retention money was in contravention to the provisions of the contract and the Company had to bear avoidable interest loss of Rs 2.01 Cr on the amount released due time. The report said that HPPCL executed 41 projects during the last three years out of which 14 projects were test checked. In six projects, works were awarded between 15 and 40 months after the approval of DPRs. In one contract, contradictory provisions and insertion of price variation clause after award of work led to undue favour to the contractor of Rs 12.25 crore. There was an inadmissible payment of Rs 2 crore on the widening of the road and avoidable payment of GST of Rs 24.57 Cr.
Regarding the delivery of uniforms for school students, the CAG pointed out that the State government was unable to plan and deliver in line with its commitment of providing uniform cloth at the beginning of the session every year. Due to delay in completion of formalities and issue of supply orders, the uniform cloth was not provided to students during 2018-19 and the departmental authorities had taken more than one to 11 months in the distribution of uniform cloth during 2016-18 and 2019-20. The departmental authorities had taken time of five to 164 days in the disbursement of the stitching charges and three test-checked blocks, 200 students were not paid stitching charges during 2016-20. Assigning testing of samples of uniform cloth to the same laboratory without tenders resulted in irregular expenditure of 1.73 crores (2019-20).

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