DI pipes not delivered; Rs 7.10 cr outstanding as water rent
Source: Hueiyen News Service

Imphal, July 19 2015 : The firm responsible for supplying Ductile Iron (DI) pipes worth Rs 1.53 crore has not delivered even after three years of receiving full payment.

Misappropriation of Galvanised iron (GI) pipes worth Rs 53.08 lakh is suspected as the same were not delivered even after 63 months of making payments.

Moreover, water charges to the tune of Rs 7.10 crore is outstanding as a result of the Public Health Engineering Department's (PHED) failure to collect the same.

These are some of the revelations made by the Report of the Comptroller and Auditor General (CAG) of India in its report for the year ending March 31, 2014 placed in the State Assembly last month.

The CAG report while picking holes in the PHED's working said the audit of records (December 2013) of the Executive Engineer, Water Supply Maintenance Division-I (the Division) showed that six supply orders were issued (October 2010, December 2010 and March 2011) to M/s Electro Steel Castings Limited, Kolkata for supplying 20,051 Running Meter (RM) of Ductile Iron (DI) pipes of varied sizes ranging from 100 - 300 mm diameter (dia) at a cost of Rs 4.43 crore for six water supply schemes.

The pipes were to be supplied within three months from the date of issuing supply order.

The Division paid the full amount of 'Rs 4.43 crore (November 2010 and March 2011) as advance to the firm without obtaining any bank guarantee.

Till October 2012, the PHED received only 12,355.50 RM of DI pipes worth Rs.2.91 crore.

CAG report found out that as on date of audit the remaining 7695.50 RM of DI pipes worth Rs.1.53 crore had not been received even after three years from the date payment was made.

Moreover, dispatch documents, pre-inspection reports, transit insurance, etc.

as required by the codal provision were not available.

Thus, due to non-enforcement of delivery schedule even after three years of making payment, Rs 1.53 crore of public fund remained blocked besides entering into a risk of loss of public money as mandatory safeguards in the form of bank guarantee from a scheduled bank was not obtained.

The inaction of the PHED had also affected implementation/completion of six water supply schemes sanctioned in 2010-11 which were scheduled for completion within 2013-14 thereby depriving the intended beneficiaries.

The matter was referred to the Department/Government (July 2014).The Department in its reply (September 2014) stated that the delivery of pipes could not be completed in time due to refusal of the transporter to deliver the pipes.

Another transporter had been engaged and an additional 5015.50 RM worth Rs 1.11 crore had been received.

The Department's claim of having received additional DI pipes was not acceptable as supporting documents for the additional material claimed to have been received, the safeguard obtained against undelivered material and the action taken for their early delivery though called for (September and October 2014) had not been received (December 2014), said the report.

Non-realisation of outstanding water charges .

Section 23(a) (v) read with Section 2(g) of the Manipur Water Supply Act.

1992 provides that the PHED Executive Engineer may cut off the connection of any premises to which water was supplied under this Act or may turn off such supply if the owner of the premises refuses or neglects to pay a bill of water charges within fifteen days from the date of the receipt of the bill.

Moreover, section 27 of the Act also provided for imprisonment of one month which may be extended to six months or a fine of Rs 500 which may extend to Rs 3000, on a person who contravenes any provision of the Act.

Despite this Audit of records (July 2013) of the Project Construction Division, PHED, Imphal East and audit (December 2013) of the records of the Executive Engineer, Water Supply Maintenance Division-I, PHED, Imphal West showed that during the period 2011-12 to 2013-14, the Divisions had an outstanding water rent amounting to Rs 1.31 crore and Rs 5.79 crore respectively.

CAG said major defaulters were domestic users, office, school/college, hostel, hotel, department tankers, public hydrant, etc.

It was noticed in audit that both the divisions had not initiated action against the defaulters in accordance with the provision of the Act on account of which an amount of Rs 7.10 crore (Rs 1.31 crore plus Rs 5.79 crore) remained outstanding as water rent.

The Department in its reply (December 2014) attributed the reason for outstanding water to unwillingness of the defaulters to pay the water rent and lapse of the Divisions while distributing the bills to the consumers.

GAC however stated that the reply was not acceptable as the Department could have taken legal action against the defaulters as per the Act.

Suspected misappropriation .

Audit, of records (May 2013) of the office of the Executive Engineer, Public Health Engineering Department (PHE-D), Senapati Division (the Division.) showed that a sum of Rs 53.08 lakh was paid to M/S Skipper Steel Limited, Kolkata (the firm) as interest free advance for supply of 11,164.00 Running Meter (RM) of GI pipes meant for augmentation of water supply scheme of Purul Atongba .

Though the pipes were to be supplied within 60 days from the date of payment (March 2009 and September 2011), no delivery was made till date of audit (May 2013) and hence the full amount of advance had remained unadjusted.

There was no record of safeguards in the form of bank guarantee and other provision for the advance paid.

Therefore, the payment of Rs 53.08 lakh as advance was irregular and amounted to undue benefit to the supplier.

Moreover, beneficiaries of augmentation of water supply scheme of Purul Atongba were also deprived due to non-receipt of pipes, On further scrutiny of records, audit observed that the supply order at SI.

No 1 issued in January 2009 was amended vide the supply order at SI, No 2 issued in September 2011.As the supply was required to be made as per amended supply order at SI, No 2, the cost of pipes should have been adjusted from the amount already paid against supply order at SI.

No 1.As the firm was paid for the quantities in both the supply orders, there was excess payment of Rs 39.89 lakh.

The matter was referred to the Department (July 2014).The Department in its reply (September 2014) stated that the materials were supplied against another supply order for which no payment was made.

Further, the Department claimed that 10510.60 RM of pipes worth Rs 55.11 lakh had been received between June 2009 and July 2012 .

The reply was not acceptable as the materials stated to have been received by July 2012 was not accounted for in the stock of the Division till the date of audit (May 2013).Moreover, relevant supporting docu ments though called for (July 2014, September 2014 and October 2014) were not furnished (December 2014), pointed out the report.

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