Crores wasted in Hidco flop show, says CAG

Written by Economy Bureau | Kolkata, Mar 28 | Updated: Mar 29 2008, 05:58am hrs
West Bengal Housing Infrastructure Development Corp (Hidco), the government agency implementing the Rajarhat New Town project to the north-east of Kolkata, seems to have succeeded on only one front: charging high prices for the land it gets developed.

That is the impression conveyed by the report of the Comptroller & Auditor General (CAG) of India for the year to March 31, 2007. The CAG notes that Hidco's poor planning, haphazard functioning and irregular payments have delayed the project and led to steep increases in costs.

The CAG's findings indirectly buttress the case of IT major Infosys and others who have been complaining that Hidco is demanding prices that are out of this world. Infosys, which has been looking for land in Kolkata since 2003, was quoted a price of Rs 2.16 crore an acre.

With other states offering land at Rs 20-50 lakh an acre, Infosys had almost walked out of West Bengal before it was offered an alternative location at an adjacent area yet to be developed.

Hidco had said it offers land at fair prices given the development costs.

The CAG report has exposed the 'costs': misdemeanors ranging from a lack of focus and slow implementation to irregular payments to contractors and short payments to oustees.

While Hidco has been quoting sky-high prices, the CAG notes that only 52% of the projected land has been acquired and the delay in acquisition led to an extra cost of Rs 78.76 crore.

After eight years of existence, Hidco is yet to acquire and develop 3,075ha in three phases as it has not prepared detailed project reports or annual work plans.

Hidco also incurred a loss of Rs 78.98 crore because of delays in awarding contracts for land development, unrealistic estimates, selection of non-qualified contractors and failure to arrange earth required for land filling.

Meanwhile, while Hidco began land acquisition in 1999, till March 2007 it had rehabilitated only 17% of the ousted families.

Hidco, the CAG said, had not fixed fair and reasonable market prices for land to be acquired under the Land Acquisition Act of 1894, leading to short payment of Rs 50.34 crore as compensation to land owners. At the same time, it made excess payments of Rs 67.58 crore to some land owners.