Implementing agency defends cost escalation

Last Updated: Fri, Oct 19, 2012 19:41 hrs

The Vidarbha Irrigation Development Corporation (VIDC), being probed for extraordinary rises in project costs, has defended its record.

VIDC was the nodal agency for 37 projects now under the Maharashtra government’s scanner for alleged irregularities. The rise in costs being probed was of the order of nearly Rs 18,000 crore. The original cost was slated to be a total of Rs 6,670 crore.

Of the 37 projects, 32 were cleared between June 2009 and August 2009. Five, whose estimates were filed prior to 2005, received revised administrative approval (RAA) from the state government. VIDC has listed 16 reasons for cost escalation — change in scope, cropping of new items, shortage of funds due to restriction on the budget size and so, delays in construction, increase in rehabilitation grant to project affected people and so on.

The cost of the Lower Wardha project rose to Rs 2,356 crore (August 2009) from Rs 950 crore (August 2006), Upper Wardha to Rs 1,376 crore (July 2009) from Rs 951 crore (March 2006) and Bembla to Rs 2,176 crore (August 2009) from Rs 1,278 crore (August 2006). Lower Painganga shot up to Rs 10,429 crore (August 2009) from Rs 1,402 crore (June 1997).

VIDS has also pointed to increases in the schedule of rates, rise of land acquisition costs, rise of royalty charges for minor minerals, increase in quantities in some items due to changes in design details and so forth. In some cases, it says, environmental clearance took two to three years. Alternative afforestation rates also surged from year to year.

A VIDC official, who did not want to be identified, told Business Standard: “The increase in the costs are technically assessed by the superintending engineers and chief engineers. The precise increases by various causes are identified and all are accommodated and the revised estimates finalised and submitted with the recommendation to the VIDC office. After the approval of the competent authority the order of sanctioning is issued.”

The report for 2010-11 by the Comptroller & Auditor General did not point to any adverse remarks or objections regarding the RAAs, he said.

The revised costs were approved when Nationalist Congress Party leader Ajit Pawar was the minister for water resources. He resigned last month as deputy chief minister in response to the allegations.

VIDC’s explanation comes at a time when the state has ordered an inquiry against 45 of its officials. It has also been told to file an affidavit in this regard to the Nagpur bench of the high court by mid-November on a petition filed by Jan Manch, a non-government body.

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