Shoddy job by civic bodies incurs large losses: Government report

Municipal corporations in the Mumbai Metropolitan Region, including the BMC, often award contracts without following government rates

Several municipal corporations in the Mumbai Metropolitan Region (MMR), including Mumbai, Navi Mumbai and Thane, do not follow government norms while inviting work tenders. This gross neglect could be causing losses with thousands of crores of rupees to the state exchequer.

Municipal corporations in the Mumbai Metropolitan Region, including the BMC, often award contracts without following government rates

An internal audit paper of the state government, yet to be released but of which mid-day, has a copy, has also revealed how arbitrary rules are applied while inviting tenders and giving work orders by urban municipal corporations in the region, including Mumbai. The audit has observed that there is no uniformity in procurement of supplies and services, implementation of various works contracts and PPP projects.

The audit also found that corporations do not applying uniform policy in acceptance of tenders and awarding of contracts. Often, contracts are being awarded ‘over and above estimates or without proper completion'. The audit points out that government rate contracts are not followed by corporations, repeat orders are given beyond limit and new works are undertaken without finishing earlier projects.

Further, it points out that losses are incurred by the state kitty by making changes in detailed project report (DPR) after the approval is given. ‘In several works, corporations have entered into work contracts without acquisition of land for the project,' reads the report. On the financial aspect, the reports points out to weak banking regulations in place at the corporations. Most corporations do not conduct proper bank reconciliation, making investments at low interest rates, and proper control is not exercised over bank accounts.

Finally, the report recommends some changes be made to acts governing the corporations, including Mumbai Municipal Corporation Act 1888, Maharashtra Municipal Corporation Act and Maharashtra Municipal, Nagar Panchayat and Industrial Township Act, 1965. "The report clearly shows that there is a need to have detailed rules and procedures regarding municipal corporations to maintain financial and structural discipline and have better governance in local bodies," said a senior government official on condition of anonymity. "We have recommended a single act for governing all municipal corporations in the state," he added.