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This is an archive article published on August 5, 2011

Even PSUs inflated CWG costs: CAG

ECIL procured 176 PEDs at cost of Rs 38.55 cr, found 42 PEDd still in packed condition.

It was not private companies alone that tried to make money through lucrative Commonwealth Games contracts but a prestigious PSU also joined the race in pocketing huge amounts. The Comptroller and Auditor General CAG on Friday pointed fingers at the Electronic Corporation of India ECIL for making an 8220;exhorbitant8221; profit of Rs 126 crore by 8220;highly inflating8221; costs for a security system.

The CAG rapped ECIL for inflating the cost for providing Integrated Security System for the Games,recommending that final payments be made to the PSU only after a detailed examination of actual costs. In a stinging observation,the CAG said the 8220;inflated estimates8221; prepared by the ECIL and approved at Rs 345.70 crore 8220;did not reflect8221; the true market rates and allowed it to make 8220;exorbitant profits of at least Rs 126.28 crore.

Such conduct by a PSU appointed on nomination basis by the government amounts to breach of trust. 8220;Considering the unreliability of the estimates and variation between the estimated and actual costs,we recommend that final payments may be released to ECIL only after detailed examination of actual costs and an appropriate certification by ECIL8217;s statutory auditors after allowing a profit margin of upto 20 per cent,8221; the report tabled in

Parliament said Friday.

The auditor noted that despite being informed by Delhi Police that Portable Explosive Detectors should be removed from its list of procurement as they were being procured separately,it went on to buy them.

In March 2010,ECIL procured 176 PEDs at a cost of Rs 38.55 crore We found 42 PEDd still in packed condition in JLN stadium ECIL procured 18,700 Radio Frequency ID tags but only 3,610 tags were used and the remaining were lying unutilised at the ECIL. 8220;This indicates that the Bill of Quantities was not realistically prepared by ECIL,8221; the CAG said.

 

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