Port developers selected without HLCA approval

Last Updated: Mon, Jan 07, 2013 19:36 hrs

Odisha has drawn flak from the Comptroller & Auditor General of India (CAG) for selecting developers and signing concession agreements for three non-major port projects- Astaranga, Subarnarekha and Chudamani without the approval of either the High Level Clearance Authority (HLCA) or the Empowered Committee on Infrastructure (ECI).

The CAG which conducted a performance audit of PPP (public private partnership) projects said in its latest report that concession agreements (CAs) of Astaranga and Subarnarekha, each with proposed investment of above Rs 500 crore were signed in January 2008 and November 2010 respectively. This was after constitution of HLCA in September 2007.

However, approval of HLCA was not sought by the commerce & transport department in both these cases while selecting the developers and signing CAs with the developers based on suo-moto application.

Similarly, in case of Chudamani port with proposed investment of Rs 72.4 crore. Approval of ECI was not taken though required under the PPP policy and MoU (memorandum of understanding) was signed in October 2009 with the private developer, said the CAG report.In case of Dhamra port, with proposed investment exceeding Rs 500 crore, though the CA was signed in April 1998 prior to constitution of HLCA but the commencement date of CA (September 2008) was after the constitution of HLCA. This matter was not put up to the HLCA while fixing the commencement date as September 2008 by the commerce & transport department.

"As selection of developers for Astaranga, Chudamani and Subarnarekha ports were not routed through the HLCA/ECI, checks like due diligence in selection of developers, uniformity in CAs, timely execution of projects, ascertaining financial soundness and capabilities of the developers were not exercised properly”, the CAG report stated.

The state commerce and transport department secretary stated that as the port policy empowers Odisha Maritime Board (OMB) to enter into MoUs and CAs with the approval of the government, the department in the absence of OMB, the department entered into MoUs and CAs with the developers after due vetting by law and finance departments.

However, the CAG did not find the reply tenable as HLCA, the apex policy making and approving body for MoU based projects were never consulted.

More from Sify: