CAG chides Defence Ministry for not driving PSUs to supply equipment on time

In a report on “inventory management in ordnance services”, the Comptroller and Auditor General has castigated the Defence ministry for not taking “proactive steps” to ensure supplies adhere to timelines which otherwise weighs heavily on public exchequer and operational preparedness of forces.

Pointing out a single case of Central Ordnance Depot (COD) of Agra, the CAG report tabled in Lok Sabha on Monday said supply orders of over ₹700 crore have not been met over 19 years. Of the total 1,942 outstanding orders, 86 were from foreign vendors. But, the maximum order of 1,324 was from various defence public sector undertakings (DPSUs).

CAG sought replies from the MoD after noticing that 364 indents or orders for tanks placed on ordnance factories by Central Armoured Fighting Vehicle Depot (CAFVD), Kirkee, remained undelivered for the last more than a decade, starting from 2004.

The MoD stated to auditors in February of 2021 that “due to non-civil end use items and availability only through PSUs/DGOF(Director General Ordnance Factories), the supply orders were not cancelled for criticality of these items in Indian Army”.

The CAG report, however, lamented that “the ministry’s supply was silent on the cases pertaining to COD Agra, which in its reply to auditors stated that the orders were not cancelled as they are the only sources of procurement”.

“The reply of the ministry is not tenable as both Ordnance Factories and DPSUs are under the jurisdiction of the Ministry,” and it “should have taken proactive steps to ensure that the supplies get materialised within the stipulated delivery period,” rebuked the auditors.

UN Missions

Another serious issue that has emerged from the audit finding is that the MoD lost $549.11 lakh over a period of six years from 2013 due to non availability or unserviceability of equipment used for UN missions. The UN reimburses costs incurred on services of major military equipment used by the contingent in peacekeeping missions. Surprisingly, “audit noticed that Indian Army contingents deployed to UN missions were not adequately equipped with major equipment,” commented the CAG. Further, an amount of $808,21 lakh was also deducted from reimbursable amount to ministry for troops deployment, said the CAG.

Under the audit scanner were reimbursements of Mission MONUSCO (Congo) and UNMISS (South Sudan) for period 2017-18 and 2018-19. It revealed that UN deducted $108.21 lakh from reimbursements since the Indian contingent did not have major equipment for operations and could not service some other major equipment it troops had.

Similarly, the UN had deducted $440.90 lakh during earlier period from April 2013 to December 2016 for the same reasons. Equally embarrassing is the CAG comment that UN withheld US $ 98,150 for deploying truck not matching the required specification/capacity in the mission area.

Protracted delays

The government had sanctioned procurement of five equipment, which has not been specified in the report, in January 2017 for which supply orders were placed in April of 2018. Another equipment’s supply order was placed in February of 2019 after a government nod in May 2018. Between January and August, the COD Mumbai had received all the equipment but the audit has identified delays ranging from 27 to 83 weeks in placing supply orders as well as for receipt of equipment. This is not good for the country’s image since India is one of the largest troop contributor for peacekeeping operations, believe defence experts.

The serious issue the report flags is over the delays in placing orders and receiving of supplies in case of critical items was an inherent problem affecting operational preparedness of Army. Twenty-three weeks is the prescribed time limit in the Defence Procurement Manual but auditors have come across delay up to 301 weeks in some cases.

The CAG performance audit report covered activities of Class ‘A’ stores of electronics & engineering and all types of vehicles at Army headquarters and their spares at three central depots at Agra, Dehuroad and Kirkee for five years from 2014-15 to 2018-19.

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