CAG detects irregularities of Rs 150-cr in wheat export by FCI

Government auditor CAG has found a number of deficiencies and irregularities, worth about Rs 150 crore, in wheat export by the Food Corporation of India (FCI).
Among various irregularities, CAG said FCI did not enter into separate agreement/MoUs with public sector trading firms for export operations, resulting into MMTC withholding Rs 60.99 crore worth export sales realisation.
The chances of recovery of proceeds of export sales withheld by MMTC were "remote" in absence of any agreement/ MoU between the two companies. MMTC has withheld this amount as adjustment in respect of very old dues receivable from FCI pertaining to 1991.

"A number of deficiencies and irregularities were noticed in the export of wheat by FCI," CAG said in its report.
The audit covered exports of 30.59 lakh tonnes of wheat by FCI from four ports in west zone during 2012-13 and 2013-14 (extended up to June 30, 2014) period.
While finalising tenders for export of wheat, FCI did not compare the rates offered at different ports that resulted in short realisation to the tune of Rs 13.75 crore.

"The corporation also incurred avoidable expenditure of Rs 20.67 crore due to bulking of stock at ports and the balance stock not exported was transported back to various depots," the report said.

"Excess payment of Rs 6.22 crore was also made to handling and transport (H&T) contractors due to application of wrong clause. Unjustified payment of Rs 8.01 crore was also made to clearing and handling agents (CHAs) for work under their scope but not carried out by the CHAS," it added.
The failure to pursue claims timely and vigorously resulted in non-receipt of service tax refund from CPSUs amounting to Rs 20.10 crore, the report said.
The Centre had in July 2012 approved export of 65 lakh tonnes of wheat to clear excess stocks from the FCI godowns.
Of this, 57.98 lakh tonne was exported in two phases and more than 50 per cent of the exports was shipped from four ports located in the western region.