Civic bodies awarded contracts to ineligible agencies,says CAG

Comptroller and Auditor General of India (CAG) has found that estimation of works under Chief Minister's special grant of Rs 100 crore each to seven city corporations had been prepared without proper investigation and split up to avoid sanction of higher authorities.
The tendering process lacked transparency as controls prescribed for ensuring competitive bidding had been overridden and contracts awarded to ineligible agencies, said a report of the CAG, tabled in the Karnataka Assembly today.
The contract management was ineffective as many items of work had been executed in disregard of the Indian Roads Congress guidelines, without justification. Payments to contractors had been made in several instances without following due procedures resulting in excess expenditure of Rs 1.88 crore, it said.

Karnataka government had approved (August 2008) release of Rs 100 crore to each of the seven city corporations over a period of two years during 2008-09 and 2009-10 to promote these cities as emerging growth centres and to reduce pressure on Bangalore city. The government approved (August 2010) release of another Rs 100 crore to each of them during 2011-14.
A committee headed by the Minister-in-charge of the district was to prepare an action plan for implementing works designed to deliver important municipal services. As the committees only reacted to the recommendations coming from the city corporations, there was no clear articulated minimum threshold measure for the cities' growth expected to be achieved by works to be taken up.

"Road works dominated the action plans prepared by committees and these constituted 58 to 68 per cent of the works taken up", the CAG report said.
"Several works like construction and improvement of parks and village roads costing Rs 16.65 crore had also been included in the action plans and executed, though not permissible", it added.