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The Public Accounts Committee on Thursday came down heavily on errors made by various government departments in contractual agreements with private players and said the Centre needs to ensure that public money and resources are safe.
In two separate reports tabled in Parliament on Thursday, the PAC said such errors are what led to problems at the GVK-controlled Chhatrapati Sivaji International Airport (CSIA), Mumbai, and the production sharing contracts with Reliance Industries for the Krishna-Godavari Basin block. The PAC has urged the Centre to be careful about such agreements.
The report on CSIA, handed over to Mumbai International Airport Ltd from May 3, 2006, found several shortcomings in the operationalisation of the joint venture model and implementation of the Operation, Management and Development Agreement (OMDA), and the State Support Agreement (SSA). It said the issues are similar to those found by the PAC in the case of Delhi International Airport Limited.
The panel said OMDA and the SSA did not specify any cost estimate for the project. “The initial cost was ₹5,826 crore as on 2006 which was revised by MIAL in 2008, 2010 and finally in 2011 to ₹12,380 crore, that is, an increase of more than 100 per cent of the original cost estimate,” the report said.
PSC contracts In another report on hydrocarbons production sharing contracts, the PAC expressed dissatisfaction at the reply of the Ministry of Petroleum and Natural Gas (MoPNG) on the KG contract. It asked why the Ministry could not quantify the impact on the exchequer because of non-adherence of PSC provisions and asked why it did not find any “affiliated transaction or fraud” to invalidate the integrity of procurement.
It took a serious view of the MoPNG’s reply that in absence of any quantification, action cannot be taken against the contractor and said that the Ministry has been vested with the resources of the country “in fiduciary capacity and therefore has the inherent responsibility to ensure that they are exploited in the interests of the country”. The PAC said the MoPNG should develop a robust monitoring mechanism within the existing PSC framework to ensure that a fully transparent and cost-effective process is adopted by the operator.
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