CAG raps GAIL on telecom project

New Delhi, May 19 | Updated: May 20 2006, 05:30am hrs
The Comptroller and Auditor General of India (CAG) has rapped GAIL India for faulty implementation of its ambititous telecom business, the GAIL Tel project, which resulted in a projected revenue loss of Rs 442.19 crores.

In its 2005 report, on the functioning of various PSUs under administrative control of different ministries, the CAG criticised the way GAIL started the GAIL Tel Project without preparing a detailed project report.

This resulted in delays, ranging from nine to 19 months, in completion of various phases of the project.

It said that in view of telecom sectors current scenario there was a need for the company to strengthen its internal systems to aviod delays in Phase III of the project.

CAG, which undertook an audit of the first two phases of the project, found that GAIL went ahead with the first phase without even preparing a detailed project report. This resulted in delays and additional investment of about Rs 36.58 crore. The first phase of the project involved purchase and laying of telecom equipment including OFC and HDPE ducts.

In the second phase of the project also, the Cag report said, delays and losses occured as the PSU went ahead with expansion of network without considering actual performance in the earlier phase.

Tele trouble

GAIL started the GAIL Tel Project without preparing a detailed project report
This resulted in delays and additional investment of about Rs 36.58 crore
GAIL Tel unable to fully utilise their network having designed capacity of upto 160 GBPS

Apart from delays in tender processing and purchase order placement, CAG found that GAIL Tel was unable to fully utilise their network having designed capacity of upto 160 GBPS.

Moreover, the PSU could not acheive capacity sales and revenue targets during any of the four years ended March 2005, said the report.