CAG flags Rs 297.97 crore unnecessary expenditure in Maharashtra road projects under Hybrid Annuity Model, punches holes in state government projects

Mumbai: The Comptroller and Auditor General of India (CAG), in its performance audit on ‘Improvement of Roads in Maharashtra through Hybrid Annuity Model', flagged an unwarranted expenditure of Rs 297.97 crore in the period from 2018-19 to 2022-23 and punched several holes in the state government's projects.The report, which was tabled in the state legislative assembly on Wednesday, stated that the specification for ‘crust thickness' of flexible pavement, which was higher than required as per projected million standard axles in Detailed Project Reports (DPRs), resulted in unwarranted cost of Rs 297.97 crore in 18 packages.The report also flagged deficiencies in DPR preparation, including lumpsum provisioning for utility shifting without component-wise estimates and inclusion of an incorrect clause in the Request for Proposal (RFP) for DPR consultants, resulting in avoidable expenditure. As many as 78 DPRs covering 195 works were prepared at a cost of Rs 217.4 crore, and an unnecessary provision of Rs 5.55 crore was made towards land acquisition activities not undertaken, the CAG said.The report further said that prior to the execution of Hybrid Annuity Model (HAM), the state government was taking up road development through contractors for which entire payment was to be made from government funds. The state government decided in November 2017 to develop 10,576km of the total 90,608km road length, under HAM with an estimated investment of Rs 30,000 crore — an average three crore per km — in which government equity share was to be Rs 18,000 crore (60%) and private equity share was Rs 12,000 crore (40%)."In three of the 42 packages, it was observed that a major part of the road stretch which was to be widened from single lane (3.5m to 3.75m) to double lane (7m) was passing through the forest area, which required forest clearance for execution of works. However, execution of these packages was started without obtaining forest clearance due to which the work was later de-scoped or could not be executed," the CAG report stated."Audit observed significant shortfall in inspection by vigilance and quality control circles as against prescribed by the department. Targets for inspection of HAM packages were not fixed at CE/SE/EE levels. There were significant delays in appointment of Independent Engineers (in 20 out of 42 sampled packages) and safety consultants (in 29 out of 42 sampled packages). Further, the department did not appoint any IE for monitoring of projects during the Operation and Maintenance (O&M) periods of HAM works," the report stated."Unrealistic loading of insurance charges and patrolling expenses was noticed in the O&M cost of the packages. Audit observed that insurance charges were included as 0.15% of the estimated project cost in the estimates instead of actual premium payable….This has resulted in inclusion of excess insurance charges in O&M cost to the tune of Rs 34.56 crore in respect of 17 out of the selected 42 packages," the report stated.