In what would be a first for public-private partnership (PPP) projects in the road sector, the Comptroller and Auditor General of India (CAG) has commenced performance audits of 100-odd highway projects awarded during the tenure of two former ministers of road transport & highways (TR Balu and Kamal Nath) and the incumbent CP Joshi.
Sources said CAG will conduct audit of the projects awarded since 2007. The auditor has sought details of identification and prioritisatisation of road projects under the PPP model awarded for the II, III, IV and V phases of the national highway development programmes. CAG is also expected to examine model concession agreements for PPP projects.
A senior official confirmed the development: ?It is the first time that CAG is looking into PPP projects. Already, a team is embedded in the ministry of road transport and highways, which is studying past files and clearances.? There is also a CAG team at the headquarters of the National Highways Authority of India (NHAI), the official said.
Officials of CAG, road ministry and NHAI have met at least thrice since December. ?Initial meetings dealt with familiarisation of the projects and the awarding process. CAG officials are now going through various decisions taken by both the ministry and the Cabinet regarding the awarding process for these PPP projects,? a senior road ministry official said. ?A team in each zone is working on this as the projects are pan-India. They are expected to compile their report soon,? the official said.
The CAG’s scathing reports on 2G spectrum and coal block auctions came as an embarrassment for the UPA government, whipping up public anger and leading to critical observations by the Supreme Court.
The auditor’s report on irregularities in coal block allocations sparked a debate over whether a CAG audit, beyond the statutory audit, is necessary for PPP projects.
CAG Vinod Rai had said the national auditor’s mandate should be expanded to bring all public expenditure, including those under PPP, under its purview.
In its foreword to its document on Public Auditing Guidelines for PPP projects, CAG said: ?PPPs, while bringing in private capital and experience, also involve transfer of valuable public assets as well as foregoing future revenues in the form of concessions… The role of public auditors, therefore, becomes critical in assessing whether such arrangements are truly in public interest and are also fair and balanced in sharing of risks as well as rewards.?
According to sources, the CAG performance audit of road projects will cover the issues leading up to the award of such PPP projects, the costing and finances involved in them, the tendering process, short-listing, qualification/disqualification of applicants, current performance of such projects among others. Projects entailing investments of R90,000 crore would be covered under the CAG audit.