MEA gets flak from CAG over Rome Chancery building hiring

The CAG today rapped the External Affairs Ministry for failure to purchase Chancery building in Rome despite approvals, resulting in committed liability of Rs 41.71 crore due to continued hiring of the property in absence of exit clause.
According to the CAG, the Mission and the Ministry failed to purchase building for Chancery in Rome despite requisite permission by the Committee on Non-Plan Expenditure in July 2011 and availability of funds.
The Ministry in its reply to CAG in May last year explained that since the report by the Structural Engineer (Projects) mentioned that the structural stability of the building seemed to be doubtful and also because the owners of the property indicated that they were unwilling to go with requirements of the Mission, it was decided to drop the proposal for purchase of the property.

The Ministry stated that before taking the decision, they had examined the reasonableness of the enhanced rental of 850,000 pounds per annum based on Mission's inputs including the option of hiring alternative Chancery premises.
"Ministry, however, accepted that the Mission erred in not including an exit clause which is routine/standard clause in all lease agreement executed by Government of India," the CAG said in its Compliance Audit Observations presented to Parliament today.
It added that the reply of the Mission/Ministry highlights "poor planning" in view of the fact that the structural engineer was deputed after a considerable delay (March 2012) from the date of approval of the proposal (July 2011).

It also said the issue of structural soundness was raised at a much later stage, whereas it should have been ensured before sending the case to Committee on Non Plan Expenditure.
"Further, omission to include exit clause in the current lease agreement may result in continuance of present agreement till December 2018 and payments of Rs 41.71 crore," the report said.