CAG nails ECIL for inflating cost of bomb detectors
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It was not private companies alone that tried to make money through lucrative Commonwealth Games contracts but a prestigious PSU also joined the race in pocketing huge amounts.
The Comptroller and Auditor General (CAG) today pointed fingers at the Electronic Corporation of India (ECIL) for making an 'exhorbitant' profit of Rs 126 crore by 'highly inflating' costs for a security system.
The CAG rapped ECIL for inflating the cost for providing Integrated Security System for the Games, recommending that final payments be made to the PSU only after a detailed examination of actual costs.
In a stinging observation, the CAG said the 'inflated estimates' prepared by the ECIL and approved at Rs 345.70 crore 'did not reflect' the true market rates and allowed it to make 'exorbitant profits of at least Rs 126.28 crore'.
"Such conduct by a PSU appointed on nomination basis by the government amounts to breach of trust.
"Considering the unreliability of the estimates and variation between the estimated and actual costs, we recommend that final payments may be released to ECIL only after detailed examination of actual costs and an appropriate certification by ECIL's statutory auditors after allowing a profit margin of upto 20 per cent," the report tabled in Parliament said today.
The auditor also noted that despite being informed by Delhi Police that Portable Explosive Detectors should be removed from its list of procurement as they were being procured separately, it went on to buy them.
"In March 2010, ECIL procured 176 PEDs at a cost of Rs 38.55 crore.... We found 42 PEDd still in packed condition in JLN stadium.... ECIL procured 18,700 Radio Frequency ID tags but only 3,610 tags were used and the remaining were lying unutilised at the ECIL.
"This indicates that the Bill of Quantities was not realistically prepared by ECIL," the CAG said.
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