CAG slams JKPCC for lack of commitment in achieving targets

The Comptroller and Auditor General today slammed Jammu and Kashmir Projects Construction Corporation (JKPCC) for "lack of commitment" and its failure to achieve the desired objectives as a "specialised" construction agency in the state.
"The company had no infrastructure in place to undertake the activities like architecture, designing, surveyors, estimators and various other activities provided in the Memorandum of Association of the company."
"This resulted in the dependence of the company on the sole activity of construction defeating the objective of creation of the company as a specialised construction agency," the CAG said in its performance audit report.
It said the corporation was set up for execution of civil construction works for the state and central governments and public sector undertakings and to curb monopoly of private contractors in constructions works by providing healthy competition between private and public sectors.

However, the corporation's functioning has actually "stifled competition", the report noted.
The report criticised the company for non-finalisation of accounts, saying it is fraught with the risk of financial irregularities remaining undetected.

"The company finalised its accounts upto the year 1994-95 only and accounts thereafter were in arrears, diluting accountability to stakeholders, indicating "lack of commitment" on part of the company, CAG said.
It said the company remained totally dependent upon the state government for allotment of works.
"Out of 350 projects taken up by the company during 2007-08 to 2011-12, only three projects were secured through competitive bidding and the rest were allotted by the project authorities to the company on cost plus basis," the report said.

"Hence, there was no competitive price discovery and no assurance of costs being reasonable," it added.
The report noted that 192 works were completed against 318 works required to be completed by March 31 last year.
Out of these, 80 completed works suffered time overrun ranging between one and 73 months and 17 works witnessed cost overrun of Rs 21.22 crores.
Among the ongoing works 30 suffered time overrun ranging between three and 172 months and cost overrun of Rs 75.80 crores, the report said.
"An amount of Rs 57.72 crores was outstanding against 51 project authorities in respect of the completed projects, indicating that the works were executed in anticipation of receipt of funds from project authorities," the report said.

The CAG report said the company was able to utilise only 53 to 68 per cent of funds available for execution of works and the unspent balances ranging between Rs 91.93 crores and Rs 313.51 crore during the period of 2007-12 was mainly due to delay in completion of the projects.