The Indian Comptroller and Auditor General highlights mis-governance in the Railway Ministry during the UPA (read Manmohan Singh and Montek Ahluwalia) administration

The New Indian Express reports on 

CAG Report on Railway Pacts Another Smirch on UPA

at http://www.newindianexpress.com/thesundaystandard/CAG-Report-on-Railway-Pacts-Another-Smirch-on-UPA/2014/06/01/article2256593.ece#

Author: YATISH YADAV

Published Date: Jun 1, 2014 10:47 AM

Last Updated: Jun 1, 2014 10:47 AM

After the 2G and coal scam-fuelled fires, a Comptroller and Auditor General (CAG) report on the railways could well trigger a deluge of debates over some ad hoc decisions taken by the UPA regime.

NEW DELHI: After the 2G and coal scam-fuelled fires, a Comptroller and Auditor General (CAG) report on the railways could well trigger a deluge of debates over some ad hoc decisions taken by the UPA regime. According to sources, the CAG audit report examining public-private-partnership (PPP) projects cleared by the previous regime is almost ready. It is learnt that while concession agreements were found signed with different private parties, there was “no uniformity” in the agreements. Sources said CAG has audited six projects under Special Purpose Vehicles (SPV) and found glaring loopholes in the pacts.

 “At the moment I can say the report would be damning, exposing the ad-hoc policy adopted by the UPA government while signing concession agreements,” a source said.

In 2008, during UPA-I, the Manmohan Singh-led government had decided to invite PPP in the non-core railway sectors for setting up of logistic parks, wagon investment schemes, wagon leasing schemes and also for setting up new factories for production of wagons, coaches and locomotives. Due to lack of resources, the government, while drafting the 12th five year plan (2012-2017) identified a number of areas including private freight terminals, redevelopment of stations, logistics parks, port connectivity, an elevated rail corridor (Churchgate-Virar), high speed corridors (Mumbai-Ahmadabad), dedicated freight corridor (Sonenagar-Dankuni) and loco and coach manufacturing units. The government had expected investment to the tune of `80,000 crore for all these PPP projects.

An official said CAG is also giving final touches to a compliance audit report on defence for Navy and Air force. This will be followed by another CAG report on Stressed Assets Stabilization Fund (SASF) which was constituted by the government in 2004 to purge non-performing assets of Industrial Development Bank of India (IDBI). A total `9,000 crore of zero-interest special securities loaned to SASF by the government were given to IDBI in lieu of the NPAs transferred. Two CAG reports on direct and indirect taxes are also complete and likely to be tabled in the next session of parliament. However, sources said that telecom  audit on 3G & 4G is still in progress and likely to be ready before the winter session. “Another controversial audit of Delhi Discom is also in the process, a source said. The Aam Aadmi Party-led government had ordered audit of accounts of three power companies in January 2014. On May 13, CAG Shashi Kant Sharma had pointed out that in many audits reports involving private parties, the national auditor found evidences that fall into a pattern of private players trying to distort competition, upset free market fairness and cause loss to both public exchequer and competitors. He advised the government to make sensible and simplified changes in the design of contracts so that incentives to fudge revenue are systematically removed.

However, the previous regime may find solace in Prime Minister Narendra Modi’s recent statement that CAG reports should not be used for political gains. During his farewell speech in Gujarat Assembly on May 21, Modi had said CAG reports must not be used as a weapon to target political opponents but should be utilised to find solutions.

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