by Minhaj Masoodi
SRINAGAR: In its 2021 report, the Comptroller and Auditor General (CAG) focusing on the Prime Minister’s Development Package (PMDP) has revealed that Rs 501.86 crore released for high-end security and law and order systems in Jammu and Kashmir from 2016 to 2019 has been spent to the tune of only 52 per cent (Rs 261.96 crore). It has highlighted certain lapses made in the procurement of various security vehicles.
Revealing the financial details, the report said that for the year 2016-17, Rs 18.30 crore was released while the expenditure incurred was only Rs 15.53 crore. Rs 2.77 crore were left unutilized.
In 2017-18, the major chunk of Rs 311.69 crore funds was released. However, only 50 per cent of the expenditure was incurred. A staggering 157.35 crores remained unutilized.
In fiscal 2018-19, as against Rs 171.87 crore released, only Rs 92.09 crore was incurred as an expenditure. Rs 79.78 crores remained unutilized.
The report further said that the Government of India sanctioned an amount of Rs 119 crore for 2019-20. However, an expenditure of only Rs 29.77 crore was incurred by the Home Department, leaving an amount of Rs 89.23 crore unutilized as of March 31, 2020. In 2020-21, up till August 2020, an additional Rs 25.15 crore was released by the Government of India but no expenditure was incurred.
The report while giving details said that under the project 56 items/works were to be procured/installed out of which only 59 per cent of the work was completed (33 against the sanctioned 56), as of August 2020.
Among them, the audit report said, 668 vehicles of various types (Bullet Proof Bunkers, Rakshak Vehicles, Gypsy, Anti-Riot Vehicles, Hydraulic Crane, JCB and Tractor) were sanctioned of which 547 vehicles had been procured and 499 delivered as on August 2020. It also said that procurement of 413 CCTV Cameras was under tendering process as of August 2020 while integrated command centres and their linked components had not been taken up for execution as of August 31, 2020.
The audit report noticed deficiencies in the procurement. The report said that the Police headquarters (PHQ), Jammu and Kashmir purchased vehicles worth Rs 100.27 crore on a repeat order basis or from original manufacturers without ascertaining the reasonability of the rates by inviting tenders.
Referring to Rule 8.4 of the Jammu and Kashmir Financial Code, the report said that purchase of stores should be made in the most economical manner and in accordance with definite requirements of public service. It additionally mentioned that as per Rule 166 of the General Financial Rules, 2017, Government of India, procurement from a single source can only be done if it is in the knowledge of the user department that only a particular firm is the manufacturer of the required goods or in the time of emergency, the goods are necessarily to be purchased from a particular source. However, the reason for such a decision is to be recorded and approval of the competent authority is obtained.
PHQ in its reply had stated that it had purchased Bullet Resistant Vehicles directly from the original manufacturers/authorized dealers, as a proprietary item to meet its “urgent requirement for law-and-order situations and anti-militancy relations”. They had also stated in their response that the procurements had been made after approval of the State Level Purchase Committee (SLPC).
The reply had further stated that the purchased items from original manufacturers on lowest company rates available to government departments as proprietary items and the vehicles were not available on Government e-marketplace.
However, the audit report of the CAG found the reply as “not tenable”, stating that reasonability of the rates even from authorized dealers/firms was not ensured by the Department.
The audit report additionally stated that Department’s purchases from a single source/firm had resulted in “avoidable expenditure of Rs 9.20 crores”.
Giving further details, the audit report mentioned that the Government of India granted sanction to Rs 18.60 crore for 40 Bullet Proof Vehicles to be purchased which included 15 Medium Bullet Proof Vehicles (MBPV) for which the Police Headquarters sent a proposal to the Home Department of the then State Government in August 2016. Seven MBPVs with Bharat Stage III Engine from M/s Ashok Leyland at the price of Rs 54.16 lakh per vehicle and eight Tata Light Armoured Troop Carriers, also Bharat Stage III from M/s Tata Motors Limited for 48.09 lakh per vehicle.
The Home Department of the Government of Jammu and Kashmir consequently gave the sanction of Rs 18.60 crore in October 2016 for the purchase of 15 MBPVs and released the amount in favour of the Director-General of Police, Jammu and Kashmir on the condition that the procurement of the vehicles is made at the “most economical rates”.
The report mentioned that the manufacture and sale of BS III vehicles were prohibited after March 31, 2017. The Government of Jammu and Kashmir had then asked the firms to manufacture vehicles with engines that were BS-IV compliant, which led to the modification of supply order in favour of M/s Ashok Leyland Limited in August 2017 from Rs 54.16 lakh per vehicle to Rs 56.32 lakh per vehicle. The report said that the supply order of M/s Tata Motors Limited was although not modified. They offered a rate of Rs 50.12 lakh per vehicle with BS-IV engines. “However, the firm made supply of eight vehicles at a rate of Rs 41.83 lakh per vehicle.”
The report said that the rates of vehicles provided by Tata Motors Limited were Rs 14.49 lakh lesser than those provided by Ashok Leyland Limited. It said that despite lesser prices, Department only procured eight such vehicles and bought the remaining vehicles from Ashok Leyland Limited at a cost of Rs 3.94 crores while Tata Motors supplied eight vehicles at a cost of Rs 3.35 crores in March and April of 2018.
It said that a balance payment of Rs 62.15 lakh after adjustment of Rs 9.83 lakh on account of delayed supply was made in favour of M/s Ashok Leyland Limited in April 2018, while balance payment of Rs 7.63 lakh in favour of M/s Tata Motors Limited was not made due to delayed supply of vehicles.
The report noted that Department’s decision to purchase the seven MBPVs from Ashok Leyland Limited incurred an extra expenditure of Rs 1.01 crores.
With regard to the purchase of Medium Bullet Proof Vehicles for the Central Reserve Police Force (CRPF), the report said that the Government of India had sanctioned an amount of Rupees 34.75 crore. 125 vehicles were to be procured with this amount under the project. The Home Department of the Government of J and K accorded sanction in favour of DGP, Jammu and Kashmir for advance withdrawal of Rs 15.20 crore for purchase of 30 MBPVs on the condition of reasonability of rates and codal formalities of manufacturers.
Two firms, Ashok Leyland Defence Systems and Tata Motors Limited offered their rates, at Rs 58.11 lakh per vehicle and Rs 50.12 lakh per vehicle respectively.
“Two firms offered (February 2018) their rates for supply of 30 Medium BP vehicles. Instead of purchase of these Medium BP vehicles on the most economical rates offered by M/s Tata Motors Limited, the PHQ, J&K placed (February 2018) order for the supply of 26 Medium BP vehicles with M/s Ashok Leyland Defence System Limited at a higher rate (Rs 58.11 lakh) per vehicle and thereafter requested (April 2018) MHA, GoI to accord post facto sanction for purchase of these vehicles within the approved budget of Rs 15.20 crore,” the audit report said.
The report further said that MHA, GoI informed (April 2018) the DGPof Jammu and Kashmir that purchase of vehicles of a particular make was discussed in SRE Standing Committee Meeting (February 2018) wherein it was decided that the Government of Jammu and Kashmir should procure items as per their laid down procedures within the sanctioned amount by MHA, GoI.
“The DGP, J&K however, placed (February 2018) the orders at higher rates in favour of M/s Ashok Leyland Defence System Limited and made (June 2018) advance payment (90 per cent of the value of the supply order) of Rs 13.60 crore to the firm,” the report read.
The purchase of 26 MBPVs at rates higher thus led to an extra expenditure of Rs 2.08 crores.
The report said that after flagging the matter to the Government, the Home Department in its reply had stated that the PHQ had made the purchase of MBPV, BS-IV as a propriety item, after recommendations from CRPF on the basis of the decision of their Board of Directors. It also stated that approval had been taken from a competent authority/SLPC.
“The reply should be viewed in light of the fact that lowest rates offered by another reputed firm M/s Tata Motors Limited for a similar type of Medium BP vehicles had been ignored by the Department and that recommendations of CPRF made at the behest of the decision of their Board, were neither on record nor produced with the reply,” the report noted.
The report added that the GoI in October 2017, sanctioned the procurement of 63 Bullet Proof Bunker Vehicles at a cost of Rs 22.05 crores and 100 Bullet Proof Bunkers for Police Stations at a cost of Rs 50.67 crores. However, during the audit in September 2018 and 2019, the records revealed that for MBPVs, a rate of Rs 58.11 lakh per vehicle was offered by Ashok Leyland Defence Systems and Rs 50.12 lakh per vehicle by Tata Motors Limited. “The Home Department, J&K accorded (March 2017) sanction for purchase of 38 BP Bunkers (Ashok Leyland Medium BP Vehicle) at a rate of ` 58.11 lakh per vehicle and released (March 2018) ` 22.08 crore to DGP, J&K. However, the funds lapsed at the end of the financial year 2017-18 which were revalidated by the Home Department and released (March 2019) in favour of DGP, J&K. Thereafter, the PHQ, GoJ&K without obtaining offers from the registered manufacturers placed (February 2019) order for the supply of 38 BP Bunkers at a rate of Rs 57.06 lakh per vehicle in favour of M/s Ashok Leyland Defence System Limited on the basis of proforma invoice (February 2019) of the firm. The PHQ, GoJ&K released (February 2019) advance (90 per cent) payment of ` 19.52 crore in favour of the firm. Thus, by ignoring the offer of M/s Tata Motors Limited and instead procuring BP Bunkers from M/s Ashok Leyland Defence System Limited at higher rates, an additional expenditure of Rs 2.64 crore had been incurred by the Department.”
The report said that Department in its reply in August 2020 had informed that the purchase of 38 BP Bunkers was made as proprietary items from Original Equipment Manufacturer (OEM), M/s Ashok Leyland Defence Systems Limited on reasonable/ approved rate and the due procedure was followed in the instant procurement. The report however remarked on the Department’s response as: “The reply should be viewed in light of the fact that offer of M/s Tata Motors Limited was not deliberated upon and purchases had been made at higher rates from M/s Ashok Leyland Defence Systems Limited.”
For the procurement of 100 BP Bunkers, the Home Department in January 2018 sanctioned an advance withdrawal of Rs 50.67 crore by the DGP. Meanwhile, the Police Headquarters had sought approval for the purchase and procurement of another 94 BP Bunkers in January 2018 within an approved budget of Rs 50.67 crore which was not approved.
“However, the PHQ placed (February 2018) order for the supply of 50 Medium Bullet Proof Vehicle (MBPV)31 at a cost of Rs 58.11 lakh per vehicle with M/s Ashok Leyland Defence System Limited, Chennai to be supplied within four months while no supply order was placed with M/s Tata Motors Limited.”
Thereafter PHQ requested the Home Ministry to accord post facto sanction under the approved budget for the purchase of these vehicles. However, Home Ministry in its reply informed that after discussing the issue with SRE Standing Committee Meeting, it was decided that items should be procured by the State Government under the laid down procedures within the amount sanctioned by it.
The sanction was then revised by the Home Department to procure 50 Ashok Leyland Medium BP Bunkers at Rs 58.11 lakh per vehicle at a total cost of Rs 29.06 crore. The supply order was thus partially modified in favour of Ashok Leyland Defence Limited by the PHQ in January 2019 at a rate of 57.06 lakh per vehicle after which advancement of Rs 25.68 crores was released in favour of the firm.
The report said that Department had thus procured the BP Bunkers at an additional cost of Rs 3.47 crore. After the matter was referred to the Government, it was informed by the Home Department that the purchase of 50 BP Bunkers of the approved 100 had been made as a propriety item and the due procedure had been adopted.
The audit report concluded that the purchases were not made in an economic manner and termed the process of supply orders with both firms as “self-contradictory”. “The fact remains that purchases were not made in economical manner after ascertaining reasonability of rates by way of involving M/s Tata Motors who had offered rate of Rs 50.12 lakh for the same vehicle. Although the Department had taken the plea that MBP Vehicles are a proprietary item, the process of placing supply orders with both the firms was self-contradictory.”
It urged the Department to adopt a streamlined approach in future. “Thus, considering the nature of urgency in such purchases, the Department may adopt a streamlined procedure, consistent with the objectives of high-end security.”
