Congress demands JPC in KG basin as CAG picks other holes in Gujarat’s development

The latest CAG report on Gujarat has highlighted many such gaps in PSU projects in the states as well as development schemes, raising doubts about the 'Gujarat model'.

Written by Avinash Nair | Ahmedabad | Published: April 6, 2016 6:17 pm
KG basin, krishna Godavari basin, cag KG basin report, CAG gujarat model, cag report gujarat, cag GSPC report, cag gspc, india news, CAG report, gujarat model development, gujarat news, ahemedabad news Reliance Industries KG-D6’s facility located in Andhra Pradesh is pictured in this undated handout photo. (Source: Reuters/Files)

A decade ago, one of Gujarat’s blue chip public sector firms, Gujarat State Petroleum Corporation (GSPC), had announced, “India’s biggest gas find in 30 years” when it struck gas in the Krishna Godavari (KG) off the coast of Andhra Pradesh. Narendra Modi who was then the chief minister of Gujarat had announced the find of 20 trillion cubic meter (tcf) gas at a press conference in Ahmedabad, June 2005.

Ever since, issues connected with GSPC and the KG basin have generated ripples across political circles in the country, the latest being CAG’s rap to an “inexperienced” GSPC for investing Rs 19,576 crore till March 2015 in the KG block. Since 2012 CAG has been pointing out how the cost of exploration of gas there has been higher than the outcome.

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The latest CAG report on Gujarat has highlighted many such gaps in PSU projects in the states as well as development schemes, raising doubts about the ‘Gujarat model’.

When the CAG reports were tabled in the Gujarat Assembly towards the end of the budget session last month, the Congress MLAs had been suspended and were not present. CAG not only criticised GSPC for surrendering 37 of the total 64 oil and gas exploration blocks during the four year period between 2011-15, it also found loopholes in the working of several other state PSUs including Gujarat State Road Transport Corporation (GSRTC), Gujarat State Warehousing Corporation and another big ticket project, MEGA (Metro Link Express for Gandhinagar and Ahmedabad Company).

The auditor has devoted almost 15 pages to GSPC in its report on Public Sector Undertakings. Regarding the company’s exploration activities in KG block, CAG stated: “The company did not properly address the risks associated with cost and technology which has resulted in uncertainty regarding the future prospects from the block when an investment of around Rs 19,576 crore has been made as on March 2015.”

The Congress party has taken CAG’s criticism as an opportunity to get back at Modi under whom GSPC had started exploring the KG basin. However, back then, the then Union Petroleum minister Mani Shankar Iyer had not reacted negatively to the 20 tcf gas find. The Congress on Tuesday demanded a Joint Parliamentary Committee probe and said “nearly Rs 20,000 crore” has been squandered away” under Modi’s watch in Gujarat.

It is not the first time CAG has found fault with the way GSPC functioned.

In a similar report submitted in March 2012, CAG rapped GSPC for “numerous faulty investment and destructive administrative decisions” that led to a loss of Rs 7,000 crore to the company. It observed how the company’s exploration cost in the KG basin was 12.81 times higher than the estimated cost and the outcome much below that claimed. GSPC was also criticised for drilling wells “without obtaining approval of management committee/GoI for the field development plan.”

This year, apart from GSPC, CAG also picked on a few other PSUs in Gujarat. Critisising the famed PPP (public-private-partnership) model that Gujarat government has been using to build modern “bus-ports” that are a mix of plush bus stations built alongside commercial structures by GSRTC, CAG pointed out the “undue favours” being dished out to private developers involved in building such central bus stations across the state.

It also took on the state for the “infructuous expenditure” —totalling to Rs 445 crore — incurred after the present management of the Ahmedabad metro rail project redrew the metro routes in 2014. This was the fourth time the metro route was altered.

Apart from the public sector units, the country’s top auditor also picked holes in the state’s healthcare system. CAG said that the state government’s hospitals were short of essential drugs like insulin and Hepatitis B vaccine and the drugs supplied by Gujarat Medical Service Corporation Ltd were found to be substandard.

CAG has also pointed out loopholes in several skill development schemes running in Gujarat. Talking about the Craftsman Training Scheme (CTS) — a flagship scheme of Ministry of Labour and Employment, the auditor noted: “The Directorate of Employment and Training failed in its objective to train more youths under CTS despite initiating new ITIs and increasing intake capacity in existing ITIs.” It pointed out that the “high drop-out rate (of about 40 percent) may be attributable to non-availability of adequate machinery, manpower, etc in ITIs, which also adversely affected the quality of training.”

According to CAG, the Gujarat government was not taking adequate steps to protect its wetlands and other natural tourism sites. The watchdog came down heavily on the state government for uncontrolled poaching at Nal Sarovar bird sanctuary near Ahmedabad and others parts of the state.

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