Comments
The Employees State Insurance Corporation (ESIC), under the Ministry of Labour, has been pulled up by the Public Accounts Committee (PAC) for delays in almost all 21 medical education projects, leading to cost overruns of ₹3,385.21 crore.
“All the medical education projects taken up were behind schedule, except for two projects at Rohini (Delhi) and Ayanavaram (Chennai). Extensions ranging from one year and two months to four years and nine months were granted to these projects,” said the 67th report of the PAC on the performance audit of ESIC, tabled in Parliament recently. The PAC, headed by KV Thomas, observed that ESIC’s capital commitment on 21 medical education projects had increased from ₹8,611.49 crore to ₹11,997. 15 crore (March 31, 2015), leading to cost overruns of ₹3,385.21 crore.
“Against the revised cost of ₹11,997.15 crore, the ESIC has incurred expenditure of ₹5,955.03 crore on 21 medical education projects,” said the report.
Six out of the 21 projects had a cost overrun of more than ₹200 crore, the important ones being PGIMSR & Medical College at Basaidarapur, Delhi, with an original estimate of ₹730.82 crore and revised cost of ₹1,470 crore (March 31, 2015) indicating a cost overrun of ₹739.18 crore, said the report. The work at Bhubaneswar has been deferred.
While the ESIC cited delays in obtaining permission from authorities, shifting of sites, handing over parts of building under occupation etc, the PAC blamed the lack of due diligence and adequate planning on the part of ESIC for the huge cost overruns.
Commenting on the frequent revision in the costs of these projects, from two to 12 times, the PAC noted that the income of ESIC, which was required for its core function of providing medical and cash benefits to insured beneficiaries was instead being spent on incomplete projects.
The PAC has, therefore, recommended that “liquidated damages may be imposed on the contractors who caused delays in completion of works and responsibility be fixed on concerned officials.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.