NHAI gave ‘undue benefit’ of Rs 203 crore to developers of 4 highway projects in Maharashtra, finds CAG | India News – Times of India

NEW DELHI: The Comptroller and Auditor General (CAG) has found that NHAI extended “undue benefit” of little over Rs 203 crore to developers of four highway projects in Maharashtra by imposing lesser damages than the norm provided in the contract agreements.
The federal auditor has found deficiencies and violation of rules, including poor construction quality and maintenance, in another seven projects, which has caused revenue loss to the National Highways Authority of India (NHAI) and blocked public money.
The CAG’s findings are part of its “Compliance Audit Report (Commercial)” which was tabled in the Parliament this week. The report has also flagged that the NHAI’s actions to reduce the damage charge for faults of private highway developers violated Central Vigilance Commission (CVC) guidelines in the case of four projects in Nanded and Thane districts.
As per the report, in March 2018, the NHAI had awarded these projects to a consortium of four firms. But the contractors could not achieve any progress and later the NHAI project director, in July 2020, recommended termination of the contract. Following the request of the consortium’s lead member, the highways authority gave approval for change of ownership of the consortium in September 2020 and January 2021.
The CAG observed that against Rs 252 crore damages recoverable as per the contractual provisions, the NHAI actually imposed Rs 49 crore penalty. “In fact, deviation from contractual terms was irregular and also violated CVC Guidelines concerning award of contracts and guidelines for improvement thereof, which discouraged post-contract amendments/ modifications having financial implications,” the report said.
As per the report, the NHAI also failed to pursue the refund and adjustment of the land compensation with landowners, establishment and contingency charges paid to Bihar for a part of Patna-Buxar highway development project, which led to blocking of Rs 534 crore since last six years. The highway authority, in the case of Poonamalle-Walajahpet section of NH-4 in Tamil Nadu, failed to maintain the stretch properly, prompting the Madras High Court to order a 50% reduction in toll, which caused a revenue loss of Rs 57.6 crore and also caused undue hardships to road users.