Sloppy IFCD punitive measure causes Rs 1.32 crore loss to exchequer: CAG

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IMPHAL June 18: Failure of the Irrigation and Flood Control Department (IFCD) to execute a bank guarantee regarding supply of iron rods has led to the loss of Rs 1.32 crore to the state exchequer.

Reports of the auditor general states that test records of the Dolaithabi Barrage division number 1 has revealed that a supply order for Rs 6.99 crore was placed to M/s Steel Authority of India Ltd. (SAIL), Guwahati for supply of 1237 metric tonnes of steel bars of different sizes for the Dolaithabi Barrage Project and 100 % of the value of materials was paid to the company in the same month as per terms and conditions of the supply order.

The job of transportation of the material from Guwahati to the consigned office i.e. Project Store Division, Lamphelpat was awarded to a local transportation firm namely M/s L.S. Enterprises,Kanglatombi by the division.

Further, according to the terms and conditions of transportation , the transporters were to haul 1237 MT of steel bars at a cost of Rs 44.63 lakhs at the rate of Rs 3,608 per MT on execution of bank guarantee (BG) for 100 percent of the cost of the material

In the event of failure to transport the material within a period of ten days stipulated in the terms and conditions, the BG was liable to be forfeited.

However, instead of executing the bank guarantee for Rs 6.99 crore for the full value of the material, the transporters were allowed to execute a guarantee for Rs 50 lacs only instead with validity upto August 2008 only.

Reasons for limiting the bank guarantee to Rs 50 lacs instead of Rs 6.99 crore is still not explained. Further, the validity of the bank guarantee was not extended beyond the deadline stated the report.

The transporters lifted 441.40 MT of steel bars from SAIL, Guwahati by July 2008 of which 187.89 MT was delivered to the department and the balance quantity of 253.51 MT comprising of 28mm,25mm and 16 mm steel bars valued at Rs 1.39 crore was yet to be delivered as of November 2010.

The amount paid to the transporters for transportation though called for could not be furnished by November 2010, stated the report.

Despite several notices tendered to the responsible authorities, the balance quantity of 253.51 MT of steel bars has yet to be delivered.

As such, the IFCD on July 2009 cancelled the contract agreement for transportation of the material by the transporter.

Further, out of the remaining quantity of 795.60 MT of steel bars, only 547.33 MT has been delivered on August 2010 through alternative arrangement made by the IFC Department.

Thus, the AG report stated that inaction of the department to execute the bank guarantee for the full value of the material to be transported and allowing the BG to lapse without any action has led to a loss of Rs 1.32 crore. The matter was referred to the State government on August,2010 and reply still has not been received since November 2010, it added.

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