Advance payment to contractor led to non-completion of project: CAG

By our Staff Reporter

GUWAHATI, April 7: A shocker! The Dokmoka Town Committee Chairman made undue advance payment to a contractor leading to the non-completion of the project. After receiving the amount, the contractor abandoned the work. What is even more shocking is that no pelty was also levied on the erring contractor.

The report of the Comptroller and Auditor General (CAG) of India, in its report on  local bodies for the year ended on March 31, 2016, said: "The chairman of Dokmoka Town Committee paid the full amount of Rs 3.06 crore in advance to the contractor prior to the completion of the project. The project remained incomplete as the contractor abandoned the work after getting the full amount. Besides, pelty of Rs 30.56 lakh was not levied on the contractor for not completing the work."

As per rule 328 of Assam Public Works Department (APWD) Manual, advances to contractors are prohibited and payment for work should be made only after the work is done and measurements for works are made. Further, clause 2 of the contract agreement says that the contractor is liable to pay a compensation amount equal to one per cent or such smaller amount as the chairman may decide on the estimated cost of the whole work – for every day that the due quantity of works remain incomplete, provided that the entire amounts of compensation to be paid under the provisions of the clause shall not exceed 10 per cent of the estimated cost of the work – as shown in the tender.

In September 2006, the Union Ministry of MoHUPA sanctioned the project for the construction of a business centre at Dokmoka Town Committee under ten per cent pool fund at an estimated cost of Rs 4.61 crore. The technical sanction of the project was accorded by the Director, T & CP, Assam in January 2007.

Dokmoka Town Committee issued the work order (civil works) to a contractor on May 29, 2007 for an amount of Rs 3.06 crore with the instruction to complete the civil work within six months. However, ignoring the provision of APWD Manual the Chairman of the Town Committee made full payment of Rs 3.06 crore to the contractor between June 2007 and April 2010 through 12 advance payments.

In March 2015, test check of records of the accounts of the Dokmoka TC chairman revealed that though the contractor had started the work in June 2007, he abandoned the work in April 2010 without any reason. Once he got the full amount of the contract, the work remained incomplete till March 2016. As the cost of the project was Rs 3.06 crore, the contractor was liable for a compensation of Rs 30.56 lakh for delay/non-completion of the project. "Neither any action was taken to pelize the contractor, nor was any step initiated to complete the remaining work. On being asked to produce the records against which payments were made, the present chairman couldn't produce any records and stated that the measurement book was lost in 2007. The chairman couldn't furnish any reason for paying the full amount as advance to the contractor and that too without measuring the previous works. Moreover, details of expenditure of Rs 3.06 crore were not produced to audit in March 2015, even after subsequent requisitions on March 2016," the CAG report said.