Nagpur metro project: CAG flags various issues, says MMRCL could not monetise land parcels

Prime Minister Narendra Modi takes Metro ride from Freedom Park Metro station to Khapri Metro Station, in Nagpur. File Pic/PTI

The Comptroller and Auditor General of India (CAG) has flagged various lapses in the implementation of the Nagpur Metro Rail project and said the Maharashtra Metro Rail Corporation (MMRCL) could not monetize the land parcels which would have generated revenue.

The performance audit was conducted covering planning, implementation, monitoring, and operations of the Nagpur Metro Rail project by MMRCL during the period 2015-16 to 2020-21.

Prime Minister Narendra Modi on December 11 inaugurated the remaining reach 2 and reach 4 routes of Nagpur Metro and laid the foundation for phase 2 which is the extension of phase 1 of Nagpur Metro.

The report was tabled in Parliament on Thursday.

In the report, the CAG observed, as per the detailed project report, the commercial operation of phase 1 was to be achieved by April 2018 but only two out of four Reaches have begun commercial operation.

The report stated at the time of the award of key civil works, the MMRC was aware that the envisaged commercial operation would not materialize in April 2018 as the scheduled completion dates of key civil works began in October 2018 and went on till February 2021.

Yet, no revised target was laid down for the commercial operation of the entire project, with the result that the construction work lingered on and is yet to be completed (March 2022), it stated.

The CAG also mentioned the MMRCL did not publish tenders on the central public procurement portal as stipulated by the department of expenditure, Union Ministry of Finance, and lost the opportunity to ensure wide publicity for the tenders to obtain competitive rates.

MMRCL tendered the work of installation of a ballast-less track in Reach 1 and Reach 3 without conducting a proper survey and assessing the actual items required for the work. It engaged a track advisor for the purpose. Due to the improper framing of the work estimate, the estimated cost put to tender was inflated by Rs 14.45 crore, i.e., by 24.13 per cent, as per the report.

Also Read: Nagpur Metro ridership tops 1 lakh on day two after inauguration by PM Modi

It said the tender evaluation lacked transparency as bidders who did not submit the required documents to verify qualification criteria were awarded contracts in two cases.

On the operational performance, CAG said the MMRCL could earn only Rs 0.27 crore from property business and advertisement, which was 0.28 per cent of the estimated revenue (Rs 97 crore) as per the Detailed Project Report.

"The land acquired for stations was more than double the requirements projected in the Detailed Project Report (73,497 sq. mtr of land was acquired against the projection of 32,752 sq. mtr). The MMRCL planned property development through the monetization of land parcels and identified four land parcels. However, it could not monetize the land parcels and as a result, no revenue could be generated," it said.

The CAG said the MMRCL constructed two-level basements for the parking facility at the Kasturchand Park land parcel near Kasturchand Park Metro station at Rs 24.75 crore. The construction of a parking facility costing Rs 24.75 crore for a station that cost Rs 41.22 crore without the development of a commercial complex lacks justification and is not a financially prudent decision.

The total surplus generated by MMRCL from 2015-16 to 2020-21 was Rs 13.14 crore and the instalment amount due to be paid to the external agencies during 2021-22 was Rs 377.79 crore, it said.

"Therefore, the surplus generated is only a fraction of the amount required for servicing of debt (total loan amount: Rs 4,521 crore) raised by the Government of India for the project from external funding agencies," it stated.

The CAG also said the MMRCL did not ensure that the stamp duty was paid at the prescribed rate as per The Maharashtra Stamp (Amendment) Act, 2015 while entering into agreements with contractors, resulting in a loss of revenue of Rs 4.76 crore to the state exchequer.

The CAG also found that MMRCL adopted 25 kV AC traction system for the project despite the suggestions for the adoption of 750 V DC system, in view of more suitability and potential cost saving of Rs 719 crore.

The project consists of two corridors for a total length of 38.478 km (33.078 elevated and 5.40 km at-grade) with 38 stations. The two corridors viz. North-South Corridor and East-West Corridor were further divided into two Reaches each, out of which one Reach in each corridor and 23 out of 38 stations have been made operational till March 2022.

This story has been sourced from a third party syndicated feed, agencies. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability and data of the text. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever.