Non-recovery of money and non-repayment of loans increased GMADA’s debt: CAG report

Report says the authority spent Rs 289.88 crore on the works which did not fall within GMADA’s purview

Written by Jagdeep Singh Deep | Mohali | Published: March 26, 2018 5:17:23 am
gmada, greater mohali, cag report, non repayment of loans, indian express GMADA office in Mohali. (Express)

THE GREATER Mohali Area Development Authority (GMADA) failed to recover the money it gave to various departments which added to its growing debt. The audit report of the Comptroller and Auditor General (CAG) found that whereas GMADA raised a loan of Rs 1,694 crore in the last five years to carry out its works, it spent a whopping Rs 289.88 crore on the works which did not fall within GMADA’s purview. These works also include the Progressive Punjab Agro Summit which was held at Chapparchiri in 2014.

The CAG report pointed out that on the directions of Punjab government, GMADA released Rs 638.33 crore in December 2014 to various Municipal Corporations, Public Works Department (PWD) and Punjab Health Systems Corporation for execution of various developmental works. Out of the released money, Rs 289.88 crore was either transferred to other departments or spent on the acquisition of land for airport and conducting the agro summit which were outside the scope of GMADA.

The CAG report said that since GMADA resorted to incremental borrowing every year to finance its operations, funding of activities outside its scope further increased its debt burden.

The report stated that GMADA raised term loans of Rs 1,694.70 crore during the period of 2012-16, out of which only Rs 244.50 crore was repaid during 2012-13. GMADA had not repaid the loan during 2013-14 to 2015-16. As a result, the debt liability of GMADA had almost doubled during the period of 2012-16.

According to the CAG report, GMADA had raised a loan of Rs 709.90 crore in 2013-2014, Rs 181.58 crore in 2014-2015 and Rs 803.22 crore in 2015-2016.

The CAG report also found that for the funds transferred for the developmental works which come under the jurisdiction of GMADA, utilisation certificates (UC) for Rs 347.95 crore were not obtained from the Municipal Councils concerned to ensure that these funds were actually utilised for the purpose for which these were released. GMADA has told CAG that funds amounting to Rs 289.88 crore were transferred for developmental works with the approval of GMADA chairman and it will obtain UCs soon.

CAG also raised questions on the internal developmental work carried out by GMADA in the new area which were being developed for the residential purposes. These areas include Eco City at Mullanpur.

The CAG report stated that the works of internal development which include the construction of roads, public health, electrical and horticulture services were allotted to an agency at a cost of Rs 154.71 crore with a time limit of 18 months. As many as 32 parks were to be developed in the project area along with providing and fixing of 110 playways.

The CAG report observed that as per instructions of Superintending Engineer of GMADA, 59 playways were procured and fixed in the parks and payment of Rs 36 lakh for 20 playways had been made to the contractor so far. During the site visit, it was noticed that this area had not been developed and no resident had started residing and using this facility. As the playways were likely to deteriorate with time, their installation prior to the completion of the project and much prior to the area being inhabited, was unjustified.

The CAG report also pointed out that GMADA did not conduct the internal audit during the period between 2012-2017. The report mentioned that no internal audit of GMADA was conducted during the year 2012-17 by any internal and external agency. The report says that without the audit, an important tool for assessing effectiveness of controls in place was overlooked.

GMADA, however, told the CAG that the internal audit could not be conducted due to the shortage of staff.

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