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CAG slams Orissa govt over minor port projects

Dec 03 2012, 02:15 IST
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Summary‘No bidding done, financial stability of developers not checked’

The Comptroller and Auditor General (CAG) has pulled up the Naveen Patnaik government for awarding at least four minor port projects to developers without competitive bidding despite the law and the finance department objecting it.

The report says that except Gopalpur port in Ganjam, four other PPP port projects - Dhamra, Subarnarekha, Astaranga and Chudamani - were awarded without any bidding.

The CAG report (a copy which is available with The Indian Express), to be tabled in the state assembly later this month, reveals that such a move goes against the state's port policy of 2004. The policy has provisions for international competitive bidding and even the law department had recommended for it.

The report says the commerce and transport department accepted suo-motu offer of private firms and signed MoUs. For Astaranga port, it signed a pact with Navayuga Engineering Company Limited, Essel Mining and Industries Limited for Chudamani port, Orissa Stevedores Limited for Gopalpur port, Creative Port Development Limited for Subarnkarekha port and a consortium of Tata Steel and L&T for Dhamra port.

The department had argued that the MoU route was better as bidding process would take more time. It said the port policy was available in public domain since January 2004 and two investor meets were held at New Delhi during 2004-06 where tentative location of ports were highlighted. But the CAG said investor meets are not substitute for competitive bidding.

“While investor meets are mechanism for making possible bidders aware about the offer, a tender for competitive bidding expresses the intention of the government to get into legally valid and enforceable contractual relationship. Besides, no effort was made to ascertain availability of other interested parties...,” the CAG said.

It noted that the finance department in October 2011 had argued that mere provision of a port policy is not an adequate reason to opt for MoU route. In the case of Chudamani port, finance secretary Jugal Mohapatra did not vet the concessionaire agreement stating that it would violate the provisions of Orissa General Financial Rules. The report also revealed how members of the consortium of several ports left the management before the lock-in period.

A case in point is the Dharma port project which started in May 2011. One of the two partners of the consortium supposed to develop the port, International Sea Ports Private Limited, exited in April 2012, within the lock-in period. ISPL left its partner

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