Fix liability for loss in electrification contracts: Parl panel to Railways

A parliamentary committee has directed the Railway Ministry to fix responsibility of officers for a financial loss of Rs 9 crore in electrification work contracts in the South East Central Railway Zone in 2017-18.

It has also favoured bringing in a provision for the recovery of financial loss to the exchequer along with penal interest consequent to the fixing of responsibility.

The matter pertained to the execution of Overhead Equipment (OHE) work in the SCR zone, for which two contracts were awarded worth Rs 35.36 crore in 2017-18.

However, the audit report found that the prerequisite civil works were not ready before awarding the contract because of a lack of coordination between the civil and electrical departments of the SECR, leading to inefficiencies and financial losses.

It noticed that the contractors supplied materials worth Rs 9.0 crore during the contract period (2017-18) but could not execute works due to the non-availability of a clear worksite.

"This led to the short closure of contracts without any progress in the execution portion. Supplied materials worth Rs 9.0 crore could not be fully utilised for the intended purpose," the Committee on Public Accounts said in its report submitted to the parliament recently.

The Railway Ministry, in its action taken reply, said that it would ensure strict adherence to a comprehensive compliance checklist for the tendering process.

Dissatisfied with the Ministry's response, the Committee expressed regret and said, "At this stage, the Committee can only recommend that an inquiry be conducted to fix responsibility for such lapse. Resultantly, material worth Rs.9.0 crore could not be fully utilised for want of a clear site."  "In the opinion of the Committee, the Ministry has not befittingly responded to the pinpointed recommendations of the Committee nor has undertaken any analysis of the factors which hindered or delayed the completion of the civil work," the report said.

The report also highlighted the Committee's concern regarding the Ministry's lack of efforts to mitigate the financial losses that occurred owing to a lack of coordination and resource management practices, despite concerns raised by the Audit.

"In order to ensure timely execution, the Committee urge that there ought to be a provision for recovery of financial loss to the exchequer along with penal interest consequent to the fixing of responsibility," the report said.

It added, "The Committee are unhappy to note the perfunctory manner and callous disregard with which the Ministry have furnished action taken replies on such an important observation/recommendations of the Committee, which was meant to streamline procurement process and award of contract in a time bound manner."  Asking the Ministry to pay adequate attention to operation and maintenance in the procurement process so that slip-back instances could be minimised, the Committee urged that in order to avoid instances of delay and cost overruns, it needs periodical evaluation of monitoring and reporting mechanisms insofar as management of funds is concerned.