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Multi-crore irrigation scam: Irrigation contractor evaded crores in govt levy, says CAG

Auditor blames officials for evasion, contractor already faces allegations

Written by Sandeep Ashar | Mumbai |
April 18, 2016 5:33:17 am

In a fresh twist to investigations in the multi-crore irrigation scam, the Comptroller and Auditor General (CAG) of India has accused a controversial irrigation contractor of evading government levy worth crores and also blamed government officials for facilitating the evasion.

The CAG has found that FA Enterprises, who was awarded a contract to build a dam over the Balganga river in Raigad, had underpaid the royalty he was entitled to for excavation of the sand used for the project to the tune of Rs 3.44 crore. The issue of the dam and awarding of the contract to FA Enterprises has been surrounded by controversy for several months now. Owners of FA Enterprises — Fateh Mohammed Khatri, Nisar Fateh Mohammed Khatri, Jaitun Fateh Mohammed Khatri, Abid Fateh Mohammed Khatri and Jahid Fateh Mohammed Khatri — are already facing the charge of cheating and misconduct in the dam project, with the state’s Anti Corruption Bureau (ACB) alleging that the public exchequer was put to a loss of over Rs 92 crore.


The government has accepted the CAG findings. Sources said that the government should now make this evasion too a part of the ACB’s investigation.

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A CAG report that was presented to the state legislature on April 13 has found that the contractor had excavated 3.44 lakh brass of ordinary earth for the dam project in June 2010. According to the auditor, he was entitled to pay Rs 6.88 crore in royalty at per rates that had been revised in February that year.

But the audit found that the then executive engineer of Raigad’s Kolad irrigation division considered outdated rates for the levy, which were half the prevalent rates. “It was noticed that the executive engineer of the Kolad irrigation division deducted royalty at pre-revised rates for 3.44 lakh brass of ordinary earth used for the work of Balganga River medium project,” the CAG has remarked.

It has further stated, “This has resulted in short recovery of royalty of Rs 3.44 crore. An amount of Rs 6.88 crore was due but only Rs 3.44 crore was charged to the contractor.” The CAG also further observed that only Rs 1 crore from the amount had so far been credited to the government account, leaving an amount of Rs 5.88 crore outstanding.

The auditor has similarly rapped the state machinery for underrecovery of royalty in 22 other water conservation projects. Following the audit objection, the government has said that it would initiate recovery proceedings in all such cases.

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