CAG pulls up I&B for early release of funds to NBCC for NMIC

The Information and Broadcasting Ministry has been pulled up by the Comptroller and Auditor General for prematurely releasing funds to National Buildings Construction Corporation for construction of National Museum on Indian Cinemas (NMIC), even before the state-run builder achieved the specific milestones.
In a report tabled in Parliament today, the CAG said the I&B ministry had in 2010 initiated a project to build the NMIC in Films Division complex in Mumbai.
At an estimated cost Rs 101.20 crore, the project was expected to be completed in June 2012. As per a contract between the Films Division and NBCC, payments were to be made on completion of various milestones.

The auditing body in its report said that the ministry in contravention of the terms of the contract, released funds to NBCC without specific linkages and also did not ascertain actual progress before making payments.
It observed that the ministry had released more than 85 per cent of the estimated project cost even before obtaining of the statutory required approval from the Municipal Corporation of Greater Mumbai.
The CAG said that NBCC could incur expenditure of only Rs 36.72 crore out of the released amount of Rs 88.11 crore as of December 2014, resulting in blocking of substantial sums for different durations during the period from March 2010 to December 2014.

The I&B ministry told the CAG that as the project was to be completed before the centenary celebration of Indian cinema in 2013, the ministry had relaxed or modified the milestones of construction before releasing funds through the Films Division.
It added that the NBCC, which is a government enterprise, had opened a separate bank account for the project and the bank interest was being credited to that account. The ministry also informed that as per the revised timeline, the museum was to be completed and handed over by December 2015.
The CAG, however, observed that the reply of the ministry does not address the issue of premature release of funds without synchronising the payments with the progress of the work.