January 14, 2020


Idle expenditure, revenue loss and untenable excuses


Gangtok, 13 Jan:

Reports of idle expenditure by government departments or misplaced priorities leading to loss of revenue or the presenting of untenable excuses to explain delays are not rare. In fact, they are too common. It is rare, even for the somnolent bureaucracy, to deliver embarrassments in which all three factors are amplified and exposed. One such project finds ignominious mention in the Report of the Comptroller and Auditor General of India on Economic, Revenue and General Sectors for Sikkim for the year ended March 2018.

The ambitiously titled, “Restoration, Renovation and Modernisation of Lower Lagyap Hydel Project” in East district on dodgy credentials in November 2012 when the Energy & Power Department managed to convince the Land Revenue Department to divert nearly Rs 44 crore from the Rs 1,000 cr sanctioned by the Government of India for reconstruction of infrastructure damaged by the 18 Sept 2011 earthquake.

The central assistance was not meant for renovation or modernization of any infrastructure and was sought and sanctioned explicitly for restoration of damages caused by that calamitous temblor. For restoration, renovation and modenisation, the Power Department should made a separate project and applied for funding or included it in its budget projections. That, however, would have required foresight and planning and follow-up, skills which appear to be in short supply in the department as the Lower Lagyap HEP adventure reveals.

The diversion was sanctioned, and one cannot help but wonder which desperate repair and restoration was put on hold to provide Power Department Rs 44 cr to waste. As for the Power Department, it justified the diversion on the ground that a modernized Lower Lagyap HEP would generate “substantial revenue” to the tune of Rs 20 or Rs 30 crore for the State. The irony of this fantastic claim convincing the diversion of desperately-required funds for earthquake repairs is stark.

Be that as it may, the funds were diverted in Sept 2012 and the Power Department displayed some urgency in expediting the project when it issued a Notice Inviting Tenders in November 2012 itself and on 23 May, 2013, awarded the project comprising of civil works, electromechanical and hydro-mechanical works for a “negotiated lump-sum” of Rs 43.22 crore. The project was to be completed within 18 months – latest by 03 December, 2014.

However, even as of Feb 2019, the “Restoration, Renovation and Modernisation” of Lower Lagyap Hydel Project had still not been completed.

The delay was noticed on the first deadline itself when two days before the scheduled date of completion, the contractor requested the Power Secretary for a time extension of 10 months [upto 11 Oct 2015].

This time, the contractor explained, was sought because work could not progress as scheduled due to hindrances by local public in the laying of water conductors. This was a hydel project, and the water conductors are clearly a crucial component without which no power can be generated. This should have been obvious to the engineers in the Department but was overlooked.

The 11 Oct 2015 deadline came and went, and this time neither the contractor seek time, nor did the engineer in-charge bother to check or authorize an extension. This, the CAG auditors view as “failure in exercise of due rigour in execution of the project.”

An inspection by CAG auditors revealed that the contractor had completed installation of electr-mechanical components of the project which means that the power house was ready for a trial run by November 2015 itself.

Remember the water conductors which have still not been laid? The water conduit pipes, the only components of the project which had been damaged by the 18 Sept 2011 earthquake, had not been completed and without water gushing to the power house, the electro-mechanical components could not be checked.

When CAG auditors checked again in June 2018, the electromechanical components, installed at the cost of nearly Rs 20 crore, were still sitting idle, never having been tested and their warranty of two years having expired.

But why could the water conduit pipes not be laid?

The Department explained in August 2018, six years after the project was begun, that the people of the area had raised objections to the laying of head race pipes due to lingering fears of the 18 Sept earthquake. Officials in the Department claimed that the hindrance cause by the people was beyond its anticipation.

This excuse is patently false because residents of the area had petitioned the State Government through the CM, Speaker and the Department, in February 2013, barely three months since the work was awarded, seeking adequate protective measures to ensure safety of the villages lying below the are axis of the water conductor pipes.

“The EPD [Energy & Power Department] was thus aware of the concern of the public of the area right from the commencement of the work but had failed to address the issue effectively in time leading to loss of huge revenue to the State,” the CAG Report concludes.

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