main report_report on city infrastructure

Third Report of HLC - City Infrastructure

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Contents

Chapter Particulars Page No.

Acronyms 2

Executive Summary 4

1 Introduction 9

2 Elevated road over Barapullah Nullah 22

3 Ring road Bypass 34

4 Covering of portions of Sunehari Nullah & Kushak Nullah

47

5 Upgradation of Streetlighting 54

6 Streetscaping 90

7 Signage 123

8 Bus Queue Shelters 149

9 Tourist Infrastructure 158

10 Grade Separator at Raja Ram Kohli Marg and Shastri Nagar Intersection at East Delhi

173

11 Construction of 3 level grade separator at Ghazipur crossing on NH – 24 bypass & road No. 56 at Ghazipur on NH – 24 Delhi

178

12 Millennium Park Bus Depot 181

13 International Broadcasting Centre & Press Centre in Pragati Maidan

187

14 Naraina T Point Flyover 193

15 Main Findings 197

16 Recommendations 229


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Acronyms

ASI Archaeological Survey of India AA&ES Administrative Approval & Expenditure Sanction AGL Above Ground Level ASTM American Society of Testing Materials BSES Bombay Sub-urban Electric Supply CGV Commonwealth Games Village CGD Commonwealth Games Division CGF Commonwealth Games Federation CFO Chief Financial Officer. CM Chief Minister, GNCTD CPWD Central Public Works Department COS Committee of Secretaries CMD Chairman & Managing Director CRRI Central Road & Research Institute CWG Common Wealth Games DDA Delhi Development Authority DCE Delhi College of Engineering DIMTS Delhi Integrated Multi –Modal Transit System DJB Delhi Jal Board DMRC Delhi Metro Rail Corporation DTC Delhi Transport Corporation DTDC Delhi Tourism Development Corporation DUAC Delhi Urban Arts Commission DWAB Delhi Works Advisory Board EC Estimated cost EFC Expenditure Finance Committee GOM Group of Ministers GNCTD Government of National Capital Territory of Delhi HLC High Level Committee IIT Indian Institute of Technology IRC Indian Roads Congress ITPO International Trade Promotion Organization ITDC Indian Tourism Development Corporation L 1 Lowest Bidder LG Lieutenant Governor, Delhi L&DO Land & Development Office


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MCD Municipal Corporation of Delhi MoI&B Ministry of Information & Broadcasting MoU Memorandum of Understanding MORTH Ministry of Road Transport & Highways NDMC New Delhi Municipal Council NTPC National Thermal Power Corporation NIT Notice Inviting Tender OC Organizing Committee PB Prasar Bharati PE Preliminary Estimate PIB Press Information Bureau PWD Public Works Department RE Revised Estimate ROB Road Over Bridge


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Executive Summary 1. Government of NCT of Delhi (GNCTD), a signatory to the Host City Agreement, was

obligated to improve road transport infrastructure to ease traffic congestion observed

during Bid Evaluation (August 2003). “Mobility within Delhi is currently difficult and

congested and accordingly transport is seen as a risk area by the Evaluation Committee”. “A

significant improvement is planned (including 74 flyovers & development of metro lines)

and provision of dedicated lanes / escorts, as planned, will be necessary to achieve the

projected travel times”.

City Infrastructure Projects 2. The Govt. of National Capital Territory of Delhi (GNCTD) took up an ambitious

programme to upgrade city infrastructure, especially road and transport sector for the

Commonwealth Games, 2010. The works taken up included elevated roads, flyovers, street

lighting, street scaping, bus parking areas, bus queue shelters etc. However, there does not

seem, to have been any plan for construction of 74 flyovers.

3. GNCTD gave to the HLC a list of 25 projects which were called ‘CWG Projects’ and

another list of 51 projects which were labeled as ‘city improvement’ projects. The HLC

identified 52 city infrastructure and Games Infrastructure Projects executed by the GNCTD,

MCD and NDMC at a cost of 7156 crore with PWD expending 76% of the total. The break

up of cost is at Table 4, Chapter 1.

4. The HLC selected 19 city infrastructure projects for detailed scrutiny. These projects

involving an expenditure of 3054 crore and are listed at Table 6, Chapter 1. Files and

documents pertaining to these projects were studied. Interviews were held with officers

and field inspection of works was undertaken.

Period of Inactivity 5. There was a three year period of inactivity (end 2003 to end 2006) except two

projects (Geeta Colony fly over and Munak canal bridges), which had been on the anvil for

some time. This delay, unintended or otherwise, compromised every subsequent stage of

planning and execution. During 2006, an Empowered Committee was constituted to


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monitor and by the end of 2006, 6 projects out of 47, for which “in principle” approval had

been given, were launched. This delay of three years in launching infrastructure projects,

which require three to four years for completion from date of approval, led to cascading

problems / difficulties, which have been outlined in this report.

Road Link from Games Village to JLN Stadium 6. In order to provide a fast link between the Commonwealth Games Village at

Akshardham Temple and Jawahar Lal Nehru stadium, a tunnel project was conceived, but

had to be dropped and replaced by the elevated road over Barapullah Nullah. This project

has been completed at a cost of 390 crore (approximately). Work started very late and the

project was completed in a hurry. The project was split into two packages and ultimately

both packages were awarded to the same agency.

7. One of the major projects undertaken was the link road by pass between Velodrome

road and Salimgarh Fort. The project was delayed by 19 months. It was split into two

packages but both packages were awarded to the same contractor. A premium of 25% was

paid to the contractor on labour and machinery cost due to compressed time schedule.

Bus Parking near JLN Stadium 8. A project was undertaken to cover a part of the Sunehri and Kushak Nalas to create

space for parking buses and vehicles. As in earlier cases, this project was also marred by

undue delay. As against the contracted amount of 303.97 crore, the work has been

completed with a likely saving of about 7 crore, which indicates that administrative

approval and sanctions were given to badly prepared and ill conceived estimates.

‘City Image’ Improvement Projects

Upgradation of Streetlights In order to improve the ‘city image’ and provide safety and security to motorists and residents, a major project was undertaken for modernization of Delhi’s streetlighting system. For unexplained reasons restricted tendering system was adopted, which was patently flawed. About 807 kms of road length coming within the jurisdiction of MCD, NDMC and PWD was taken up for upgradation. Administrative approval was given for a total sum of 465 crore and the contracted amount was 285 crore. Unknown practice of involving a luminaire manufacturer as the leading partner was introduced and a provision was made for fixing only imported luminaire on certain stretches. Successful parties imported luminaire at a much lower price than quoted


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and cited in the tender bid. While street lighting system has no doubt been modernized, expenditure has been far beyond what was necessary and called for.

Streetscaping 9. Another important sector, in preparation for the CWG, was street scaping and

beautification of selected Delhi roads. A sum of 324 crore was committed for improving

about 77 kms of roads. The project envisaged expenditure ranging from 0.80 crore to 12

crore per km. and the average expenditure works out to 4.20 crore per km! Huge

amounts were paid to the selected consultants. A few contractors managed to bag the

entire work. Unrealistically high estimates were prepared and even then there were large

variations in the estimated and actual quantities. There are serious reservations about the

surfaces used for the foot paths and strong doubts about the quality of work executed.

Horticulture intervention has been of a temporary nature as many plants have already

withered.

Signage 10. It was also desired by the GNCTD to have State-of-the-art signage for the entire city

of Delhi. The work was undertaken by the PWD and the NDMC and the total outlay was

98 crore. Competition was restricted. The high cost of sheets was justified on grounds of

the long life and low maintenance cost. However, installed signage is already getting worn

out in NDMC area. There were anomalies in the NIT and instances of over-payment have

come to light. The signage installed does not conform to standards set by the Indian Roads

Congress.

Bus Queue Shelters 12. Another project examined by the HLC was the construction of Bus Queue shelters

(BQS). Three packages for construction of 500 bus shelters were evolved but eventually

only one package for constructing 157 BQS was taken up at a cost of 18.97 crore. There

were wide variations in the bids made by the three bidders. The work was not completed

by the time the CWG started and even in December, 2010, five BQS had yet to be

constructed.

Tourist Infrastructure 13. The HLC is of the view that the tourism infrastructure schemes were ill-conceived.

Under the pretext of “shortage of hotel rooms in Delhi”, the entire exercise undertaken was


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reduced to the auction of hotel plots on a “fast track” basis by DDA. DDA did not monitor

activities to ensure completion of the hotel projects ahead of the CWG. Only one hotel with

243 rooms was completed. Similarly, the objective of making available alternative tourist

accommodation of 5009 rooms at the Vasant Kunj flats was not achieved and only 778

rooms could finally be made available. The plan to upgrade the Vasant Kunj flats to 3 star-

level was prohibitively expensive and ill-founded. Based on the 7554 nights accommodation

eventually provided to 671 national technicians, the upgradation cost worked out to 1.43

lakh per person per night. Besides, this accommodation did not add to the tourist

infrastructure as legacy investment.

Other Projects 14. The findings of the HLC on four other projects are as follows:-

a) Grade separators at Raja Ram Kohli Marg and Shastri nagar intersection –

delayed due to late clearance by the DDA and unusually long delay in shifting

of 11 KVA and 33 KVA lines.

b) Ghazipur three level grade separator – delay in acquiring land from DDA, in

shifting IGL gas pipeline, shifting of 66 KVA line and shifting of storm water

drain.

c) Millennium Park Bus Depot – has come up on 63 acres of precious land.

There is confusion about whether the structures are temporary or this will be

a permanent location for the DTC Bus Depot.

d) International Broadcasting Centre and Main Press Centre in Pragati Maidan -

ITPO overestimated the cost of renovation and ended up with an unspent

balance of 25.90 crore, which should be immediately refunded to the

Ministry of I & B. The ITPO has wrongly billed electricity and water charges of

5.95 crore on the project.

e) Naraina T-point Flyover – the cost of delay is estimated at 6.89 crore and

excess payment of 62.71 lakh has been made to the consultant M/s EIL.

Main Findings 15. Scrutiny of selected projects shows that:


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i. design consultants were given very little time for preparation of design,

estimates and bid documentation – Barapullah Nala, Salimgarh by-pass;

ii. tenders were invited and, at times, accepted even before AA&ES of the project;

iii. instead of specific pre-qualifications for high value projects, a general panel of

prequalified contractors were allowed to bid;

iv. high value packages were split to enable existing prequalified contractors to bid;

v. arbitrary additions were made to the list of prequalified contractors;

vi. four contractors captured 60% of PWD work by value, on their terms, to the

detriment of economy and efficiency.

vii. It is likely that the conduct of key Members of Works Advisory Board, including

its Chairman, was complicit in causing ‘undue gain’ to contractors. The

magnitude of gain / loss has been quantified vis-à-vis those projects examined by

HLC in Chapter 15.

16. PWD could well have resorted to alternative methods for accelerated construction

e.g. design, build, turn-key, ‘fixed cost, fixed time’, lump sum etc. but it failed to do so.

Monitoring of projects by PWD was inadequate and ineffective. The collapse of ‘foot over

Bridge’ adjacent to JLN stadium was an example of inadequate supervision. Despite

additional payments, amenities legally due to workers were generally denied by contractors

and labour laws, in general were ignored.

17. Efforts of the Empowered Committee were by and large ineffective. Many projects

were monitored and abandoned, on going project issues could not be resolved; by and large

value addition of this initiative was limited. GNCTD also used this opportunity to launch

projects not connected to its declared objective, in particular streetscaping and street-

lighting projects. Poorly conceived and executed signage project added to cost and caused

undue gain to two suppliers.


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Chapter 1: Introduction

1.1 Government of NCT of Delhi was a signatory to the Host City Contract signed on 13th

November, 2003 at Montego Bay, Jamaica along with Government of India, Indian Olympic

Association and Commonwealth Games Federation.

1.2 As the Host City, Government of NCT of Delhi had, inter alia, made the commitment

to upgrade city infrastructure especially road and transport infrastructure and the same had

been noted by the Evaluation Commission of CGF. Even though, city infrastructure was

‘adequate’ for hosting the CWG 2010 even in 2003, Delhi Government embarked on an

ambitious programme to upgrade city infrastructure at a considerable cost.

1.3 While undertaking the aforesaid task should have been welcome, the manner in

which and the cost at which the task was accomplished, raised several questions. As a part

of the enquiry into all CWG related projects especially with reference to time, cost, quality

and legacy value, the HLC through its team of experts /consultants examined several works

related to city infrastructure. Based on the reports of individual projects, which have been

Box 1: Extracts from Report of CGF Evaluation Commission

The Evaluation Commission of Commonwealth Games Federation (CGF) made the following observations about the city infrastructure in its Report sent to all Member Associations before the crucial vote for selection of Host City for CWG 2010:

“With a fast growing population of 13.8 million, Delhi is a mega city experiencing rapid economic expansion…. Delhi’s city infrastructure is adequate; however some road and transport infrastructure will need to be improved:

(i) A plentiful supply of good quality hotel rooms exist; (ii) Mobility within Delhi is currently difficult and congested, and accordingly

transport is seen as a risk area by the Evaluation Commission. A significant infrastructure improvement is planned (including 74 flyovers and development of the metro lines) and provision of dedicated lanes /escorts, as planned, will be necessary to achieve the projected travel times.”

It is evident that Govt. of NCT of Delhi had committed to expand the metro network as well as construct 74 flyovers across the city before the Commonwealth Games in 2010 and the same had been noted by the Evaluation Commission.


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reproduced in the later chapters of this Report, an attempt has been made to throw light on

shortcomings from planning to implementation stage and lessons for the future.

CWG Projects 1.4 GNCTD provided to the experts of HLC two lists of projects which were stated to be

the list of projects undertaken for the CWG 2010. The first list contained names of 25

projects with an approved cost of 3752.98 crore and was titled "Commonwealth Games

Projects"1

Table 1: List of Commonwealth Games Projects

. The projects approved by GNCTD under this category are shown in Table 1.

S.N. Name of the Project Agency Amount Sanctioned ( In Crore)

1 Thyagraja Sports Stadium PWD 297.00 2 Chhatrasaal Sports Stadium PWD 100.00 3 Ludlow Castle Sports Complex PWD 20.00 4 Talkatora Indoor Sports Stadium NDMC 150.00 5 Shivaji Sports Stadium NDMC 180.00 6 Purchase of 574 low floor air-conditioned buses for Games family DTC 354.00

7 Bus parking opposite Millennium Park for CWG PWD 60.00 8 Bus Parking at Raj Ghat for CWG PWD 19.00 9 Bus parking at Safdarjung Airport for Park & Ride facility for

CWG/utility structures/lighting/security systems NDMC 40.00

10 Bus parking at Barapullah Nallah & Sunehri Nallah for CWG MCD 324.00

11 Bus parking at R.K. Puram Nallah for CWG MCD 15.00 12 Water Treatment Plant(1 MGD) DJB 35.00 13 Sewerage Treatment Plant(1 MGD) at Games Village DJB 28.00

14 Barapullah Elevated Road for CWG PWD 549.00 15 Ring Road Bye-Pass for CWG PWD 654.39 16 RUB at Vivek Vihar for CWG MCD 11.48 17 RUB at Sewa Nagar for CWG MCD 26.00 18 Street Scaping Works around CWG Stadium:

PWD PWD 269.69 MCD MCD 160.00 NDMC :- NDMC (A) Streetscaping of Brig. Hoshiyar Singh Marg 5.17 (B) Streetscaping of Aurobindo Marg 6.48 (C) Streetscaping of Mandir Marg 6.56 (D) Streetscaping of Park Street & Old R.K. Ashram Marg( Park Street to Mother Teresa Crescent)

2.56

(E) Streetscaping of Old R.K. Ashram Marg (Park Street to Kali Bari Marg)

2.52

1 See Relevant Document 1 A


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(F) Streetscaping of Udyan Marg

1.81

19 U.P. Link Road for easy access to U.P. for CWG PWD 334.00 20 Tetra Communication system for secured communication for CWG

– monthly rental for two months IT, GNCTD

8.60

21 Construction of Fire Station at Mayur Vihar for CWG PWD 3.42 22 Cultural events ( to be held during the Games) Art and

Culture Deptt.

28.30

23 Greening of Games Venues by using potted plants to project Green Games

PWD / DDA / NDMC / MCD / Env / DPGS

28.00

24 Equipment for Polyclinic in Games Village DHS 23.80

25 Centralised Accident Trauma Services(CATS) and Advance Life Support(ALC) Ambulances at various CWG venues

DHS 9.20

TOTAL 3752.98

1.5 The second list contained 51 projects having an approved cost of 24,849.31 crore

and was titled "City Improvement Projects"2

Table 2: City Improvement Projects

. The projects approved by GNCTD under this

category are shown in Table 2.

S.No. Name of Project Agency Amount Sanctioned ( In

Crore)

1 Geeta Colony Bridge PWD 129.07 2 Bridge at Neela Hauz PWD 46.57 3 ITO Chungi PWD 81.77 4 R.R. Kohli Marg PWD 230.00 5 Shatsri Nagar Pusta PWD 6 BJ Marg/RTR Marg PWD 59.64 7 Nelson Mandela/Vivekanand Marg PWD 104.30 8 Aruna Asaf Ali/Africa Avenue marg PWD 82.60 9 Corridor improvement of Road No.56 PWD 200.00 10 Flyover on NH-24 byepass near Gazipur PWD 245.56 11 ROB on road No. 63 PWD 34.15 12 Mukerba Chowk PWD 195.22 13 RUB on Road No. 58-64 PWD 37.70 14 Naraina PWD 119.76 15 Mangolpuri PWD 31.24

2 See Relevant Document 1 A


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16 Azadpur PWD 153.60 17 Behra Enclave PWD 54.66 18 Nangloi NH-10 PWD 77.99 19 Shyam Lal Collge PWD 98.32 20 Apsara Border PWD 226.47 21 ROB on Road No. 68 PWD 107.00 22 IGIA terminal 3 Runway and Associated works-

resolution of sewer discharge DJB 18.00

PWD 181.00 MCD 7.24

23 Widening of Roads PWD 108.00 24 Strengthening & Resurfacing of Roads

1. PWD PWD 260.00 2. NDMC NDMC 19.38

25 Signages

1. PWD PWD 72.00 2. MCD MCD 3.25 3. NDMC NDMC 18.90

26 Street Lighting

1. PWD PWD 198.00 2. MCD MCD 95.27 3. NDMC NDMC 53.42

27 Beautifcation of Flyovers 1. PWD PWD 3.60 2. MCD MCD 3.00

28 Connaught Place Restoration / Redevelopment NDMC

29 Gole Market Redevelopment NDMC

30 Bus Q Shelters DTC 20.00

31 Augmentation of DTC Fleet DTC 1,455.00

32 Construction of Depots

(A) Ghumanhera DTC 81.63

(B) Dwarka Sector-2

(C) Dwarka Sector-8 (D) Okhla-3 (E) Narela (F) Kanjhawla - | (G) Kanjhawla - || (H) Rohini -4

33 Dadri NTPC Thermal-980 MW

Power Deptt. NTPC Project

34 Aravalli JV NTPC and Haryana - 750 MW

Power Deptt. 429.00

35 Damodar Vallley Corporation-1800 MW out of 2500 MW

Power Deptt.


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36 Bawana Gas Based - 1500 MW Power Deptt. a. 860.00 - Loan from PFC b. 1100.00 - Equity of GNCTD c. 300.00 - IPGCL Savings 2,260.00

37 Munak Lined Canal DJB 360.00 38 New Delhi-Railway Station - IGI Project DMRC 16,887.00 39 IGI - Dwarka Sector 21 DMRC 40 Dwarka Sector 9-21 DMRC 41 Central Sectt. To Badarpur DMRC 42 Central Sectt. To Gurgaon DMRC 43 Shadara to Dilshad Garden DMRC 44 Indraprashta - Yamuna Bank DMRC 45 Yamuna Bank - New Ashok Nagar DMRC 46 New Ashok Nagar – Noida DMRC 47 Yamuna Bank - Anand Vihar DMRC 48 Vishwavidyalaya – Jahangirpuri DMRC 49 Inderlok – Mundka DMRC 50 Kirti Nagar to Ashok Park DMRC 51 Underpass at Shanti Path DMRC TOTAL 24,849.31

1.6 The cost of the projects included in the two lists works out to 28,602.29 crore. This

does not include many projects, which were pursued for a considerable time but eventually

abandoned (e.g. East West corridor, Mahipalpur bypass, signal free intersection at Noida

More), and some others, which were undertaken and completed but their cost was not

included in the two lists (e.g., improvement of Connaught Place and Gole market areas at

S.N.28 and 29 of Table 2, corridor improvement at ISBT Anand Vihar, and widening of Minto

Road). If their cost is included, the total cost of projects undertaken by GNCTD, MCD and

NDMC, will be much more than 28602.29 crore indicated in Tables 1 and 2 above. In the

absence of firm data on the cost of these projects, the cost of CWG projects can be put as

30,000 crore even according to very conservative estimates.

1.7 The figure of expenditure by GNCTD as appearing in the brochure published by

MOYAS is 16,560 crore, the break up of which is produced in Table 3 below:


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Table 3: Approximate Cost of Project of Government of Delhi

S. No. Name of Project Cost ( in crore)

1 Flyovers & Bridges 3700.00

2 ROB/RUB & IGI Terminal Work 450.00

3 Stadia 670.00

4 HCBS (Ambedkar Nagar to Delhi Gate) 215.00

5 Augmentation of DTC fleet 1800.00

6 Construction of Bus Depot 900.00

7 Widening, Strengthening & Resurfacing of roads 650.00

8 Street lighting 650.00

9 Streetscaping 525.00

10 Improved road signage 150.00

11 Metro connectivity 3000.00

12 Power plants 2800.00

13 Water supply (STP, WTP, Munak Canal etc.) 400.00

14 Health 50.00

15 Parking facilities by covering nallahs 400.00

16 Communication & IT 200.00

Total 16560.00

The expenditure indicated above is essentially the same as indicated in Tables 1 and 2 but

for expenditure on metro projects, which is shown as 3000 crore in Table 3 above as

against 16, 887 crore in Table 2.

Expenditure on City infrastructure including Games infrastructure 1.8 Excluding the expenditure of 1809 crore on acquisition of low floor buses by DTC

(S.6/ Table1 and S.N.37/ Table2); 2689 crore on power infrastructure (S.N.34 and 36/

Table 2); 16,887 crore on DMRC (S.N. 38 to 51/ Table 2) and 61.30 crore on some

miscellaneous items (S.N. 22,24,25/ Table 1), the total cost of 52 city infrastructure and

Games infrastructure projects executed by GNCTD, MCD and NDMC was 7155.99 crore.


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This comprised 47 city infrastructure projects and 5 sports stadia. The agency wise break up

of expenditure is presented in Table 4 below:

Table 4: Agency wise break up of expenditure

S.N Agency Level of expenditure ( crore)

Percent of total

1. PWD 5444.72 76.1% 2. MCD 645.24 9% 3. NDMC 486.79 6.8% 4. DJB 431.00 6% 5. DTC (excluding Acquisition of buses) 101.63 1.4% 6. Others (IT, Art & Culture, DHS) 46.61 0.7% Total 7155.99 100%

Major projects handled by various agencies 1.9 PWD: The major projects handled by PWD, apart from three Games & Training

venues (Thyagaraja, Chhatrasal and Ludlow Castle), included Barapullah elevated corridor,

Ring Road Bypass, UP Link Road, Streetscaping, Street Lighting, Signage and 21 flyovers.

1.10 MCD: Covering of Sunehri and Kushak Nallahs was the main project handled by MCD

apart from the projects of streetscaping, street lighting and signage.

1.11 NDMC: The main projects handled by NDMC were Talkatora and Shivaji stadia,

streetscaping, street lighting and signage. NDMC also handled the project relating to

development of Connaught Place and Gole Market areas, the cost of which has not been

provided in the lists mentioned above.

1.12 DJB: Munak lined drain was the main project handled by DJB.

1.13 DTC: The main projects undertaken by DTC (apart from acquisition of buses) were

construction of 8 bus depots and Bus Q shelters.

1.14 DDA: DDA undertook development of tourist infrastructure in the city which

included, inter alia, construction of Vasant Kunj Flats with 3 Star Facilities; auction of Hotel

sites etc.


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Governance Structure PWD

1.15 PWD, GNCTD was responsible for implementation of most of the City Infrastructure

Projects. It followed the CPWD Works Manual 2007 in respect of delegation of technical and

financial powers while approving tenders for sanctioned works. The power for sanction of

works was delegated to the Expenditure Finance Committee (EFC) and the Council of

Ministers. The position is briefly stated below.

Table 5

January 2003 till October 2007

Above 1.2 crore upto 100 crore

EFC chaired by Finance Minister

Ref No. F8/2/97/A/cs/4804-15 dated 9.1.2003

Above 100 crore Coucil of Ministers after EFC approval

October 2007 till January 2009

Above 5 crore upto 100 crore


Ref No.: F8/2/2007/AC/Fi/07/9659 dated 17.10.2007

Above 100 crore Council of Ministers after EFC approval

January 2009 till July 2009

Above 5 crore and upto 50 crore


Ref.No.: F3/30/CS/2007/Pr(Fin)/10 dated 14.01.20093

Between 50 and 100 crore EFC chaired by Chief Minister

Above 100 crore Council of Ministers after EFC approval

July 2009 till Games

Between 5 and 100 crore EFC chaired by Chief Minister for all Games Projects

Ref.No.:3/30/CS/2007/PSF dated 15.07.20094

Above

100 crore Council of Ministers after EFC approval

3 See Annexure 1 A 4 See Annexure 1 B


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1.16 As regards tender approval, the provisions of CPWD Works Manual 2007 as applied

to GNCTD, specify that the power of approval of tenders upto 4 crore rests with the Chief

Engineer, beyond which it is approved by Delhi Works Advisory Board (DWAB) which has

unlimited powers. DWAB is headed by Principal Secretary, PWD and has Engineer-in- Chief

and the concerned Chief Engineer of PWD as Member, besides a Chief Engineer from some

other Department and a representative from Finance Department as Members.

1.17 As indicated in Table 5 above, the powers of Expenditure Finance Committee are

stipulated in orders issued with the approval of LG. Order dated 15th July, 2009, which has

been issued by the Finance Department, specifies that all CWG projects with an estimated

cost of between 5 to 100 crore would be put up before the EFC headed by the Chief

Minister and those beyond 100 crore before the Council of Ministers. Thus, after 15th July,

2009, the power to consider and clear all CWG projects has been granted to the Chief

Minister.

1.18 The Works Manual provides that tenders below the ‘estimated cost’ are to be

approved. In case the tenders are beyond 10% of the estimated cost, a ‘justified cost’ of the

work has to be worked out on the basis of current market rates and the tenders compared

with the justified cost. A tender in excess of upto 5% of the justified cost is to be ignored,

upto 10% can be approved, and beyond 10% has to be rejected. PWD, GNCTD follows the

provisions of the Works Manual in toto. The estimates are not revised if the tender is below

10% of the justified cost.

MCD

1.19 In Municipal Corporation of Delhi (MCD), the powers of administrative approval for

projects of upto 25 lakh vests with the Municipal Commissioner; the Ward Committee

exercises similar powers for projects between 25 lakh and 1 crore and all other projects

need to be approved by the Corporation. All proposals are routed through the

Commissioner and the Works Committee in case of projects of more than 1 crore.

1.20 As far as approval of tender is concerned, the Municipal Commissioner has powers

to approve tenders of upto 25 lakh; all other tenders are approved by the Standing

Committee comprising of of 18 councillors.


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NDMC

1.21 In case of NDMC, all works of more than 1 crore have to be placed before the

Council for approval. The Engineer- in- Chief has powers to accord administrative approval

to residential projects of upto 50,000 and non-residential projects of upto 2 lakh and

approve tenders of upto 50 lakh. Chairman, NDMC has powers to accord administrative

approval and award works of works in the range between 50 lakh and 1 crore. Thus, for

all practical purposes, major CWG related projects were approved by the Council.

Monitoring Mechanism devised by GNCTD 1.22 GNCTD constituted an Empowered Committee under Chief Secretary, GNCTD for

reviewing and monitoring the projects. The Committee held 27 meetings between 26th

October 2006 and 12th August 2010. The Minutes of these meetings were provided to the

HLC Team.

1.23 A former Chief Secretary of GNCTD was appointed Special Adviser for

Commonwealth Games. He inspected and reviewed individual projects and sent his

inspection reports to Chief Secretary with copies to concerned officers.

1.24 In addition to their own monitoring mechanism, GNCTD was part of the overall

monitoring of Commonwealth Games by Group of Ministers (GoM), in which CM, GNCTD

and LG, GNCTD were Special Invitees. Chief Secretary and other senior officers of GNCTD

also attended the meetings of Committee of Secretaries (COS), chaired by Cabinet

Secretary.

Scope of Report 1.25 This Report reflects the findings and conclusions of the High Level Committee (HLC)

on various aspects relating to the development of city infrastructure with special reference

to construction of flyovers, bypasses, elevated corridor, improvement and upgradation of

street lights, streetscaping, street furniture, tourist infrastructure etc.

1.26 The HLC through its team of officers / experts examined the CWG projects of the

GNCTD, MCD, NDMC and DDA against the Terms of Reference of the Committee, with

special focus on:


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• Planning and execution of city infrastructure projects – execution and delivery with

reference to time, cost and quality;

• The effectiveness of the organizational structure and governance, in particular,

within GNCTD, MCD, NDMC and DDA;

• Weakness in management, alleged irregularities, wasteful expenditure and

wrongdoing in performance of the tasks assigned to various agencies.

Criteria 1.27 The HLC evaluated the management and performance of the key functions carried

out by Departments like the PWD of GNCTD, MCD, NDMC and DDA in the background of

reasonable timelines for initiating and completing the projects in accordance with

established standards, generally accepted best practices and conformity to good

governance.

Methodology 1.28 The key procedures followed for the purpose of review were:

a. Identification and examination of relevant file notes of the concerned Works

Divisions of GNCTD, MCD, NDMC, DDA, Public Works Department of GNCTD, extracts

of the Notes for Cabinet, records of the meetings of EFC, GoM, and correspondence

on the subject matter.

b. Interview with officers and functionaries responsible for planning, execution and

monitoring of the city infrastructure projects.

c. Examination of reports from the Chief Secretary and other senior officers of different

Departments of GNCTD; MCD, NDMC and DDA.

d. Cross checking information provided with data available from other Departments of

Government of India.

e. Field inspection of works selected for detailed scrutiny.

Projects selected by the Committee for detailed scrutiny 1.29 The HLC selected 13 City Infrastructure Projects of varying size and cost range for

detailed scrutiny. The projects selected are presented in Table 6 below. The aggregate cost

of these projects is 3053.83crore (approximately 42.7% of the total infrastructure cost of

7155.99 crore including Games infrastructure). Three of these projects (streetsacping, street


20

lighting and signage) were implemented by three agencies, viz, GNCTD, MCD and NDMC in

their respective jurisdictions. Thus, in all 19 projects/ sub projects were examined.

Table 6: Projects selected for detailed scrutiny

S.N. Name of Project Approved Cost (crore)

Project owner

1. Barapullah Elevated corridor (Package I and II) 498.00 GNCTD 2. Ring Road Bypass

Package I Package II

654.39 GNCTD

3. Covering of Sunehri and Kushak Nallahs 325.50 MCD 4. Ghazipur Grade Separator 245.56 GNCTD 5. Naraina T Point 119.76 GNCTD 6. Raja Ram Kohli Marg 229.68 GNCTD 7. Streetscaping 269.00

160.00 25.10

GNCTD MCD NDMC

8. Street lighting 198.00 95.27 53.42

GNCTD MCD NDMC

9. Signage 72.00 3.25 18.90

GNCTD MCD NDMC

10. Bus Parking at Millenium Park 60.00 DTC 11. Sewa Nagar RUB 26.00 MCD 12. Tourist Infrastructure – Vasant Kunj Flats DDA 13. Facilities for Media in Pragati Maidan 75.00 ITPO Total 3053.83

1.30 The cost range of these projects is as follows:

No. of projects of more than 500 crore: 1

No. of projects between 200-500 crore: 5



No. of projects upto 50 crore: 4

Total: 19


21

1.31 Self contained chapters on various projects executed by different agencies which

were inspected by the Teams of HLC have been included in this Report. An attempt has

been made to cover all aspects of these projects from planning stage to execution and also

highlight the major findings on each of these projects.

1.32 Certain patterns and ‘method in the madness’ which have come to light and which

are visible in a slew of projects executed by different agencies have been included in the

Chapter captioned ‘Main Findings’. The recommendations of HLC are contained in the last

chapter of the Report.

Box 2: Metro Expansion in run up to CWG 2010

Government of NCT of Delhi undertook an ambitious programme under Phase II of construction of Metro Rail network. As against approximately 65 kms constructed during the previous eight years ending October 2006, it was decided that under Phase II, 85 kms of Metro lines would be constructed through financing by GNCTD and others.

While this was way beyond what had been accomplished in the past, it did not deter GNCTD to undertake two additional lines, viz. Central Secretariat – Badarpur Station line (20.4 km) and Airport Express Line (22.7 km). For these lines, in the name of the Games, Government of India provided 3000 crore which has been displayed in MYAS publication as expenditure connected with conduct of CWG, 2010.

It is another matter that this ambitious programme led to the following consequences:

a) A further strain on the construction industry in Delhi which was burdened, in any event, by the numerous projects approved by GoI, GNCTD and others for the Games. This led to cost overruns and eventually to time overruns;

b) Decline in the quality of work; witness the Laxmi Nagar incident (19.10.2008) and Jamrudpur (12.7.2009 /13.7.2009);

c) Significant increase in the number of fatal accidents at various Metro and CWG sites due to inadequate safety measures, night shifts and poor supervision. In reply to a Rajya Sabha Question, it was acknowledged that 109 deaths had taken place of which 93 workers died at different sites of Delhi Metro.

Unfortunately, most of the targets could not be met; Badarpur Line was completed upto Sarita Vihar; Airport Express Line remained incomplete and, thus, the objective of assisting the GNCTD to complete two additional lines in time for CWG 2010 was not accomplished.


22

Chapter 2: Elevated Road over Barapullah Nullah Introduction 2.1 The elevated road constructed over Barapullah Nullah provides a direct link between

Ring Road near Sarai Kale Khan and Jawahar Lal Nehru Stadium. It was constructed to

provide seamless and shortest possible road link between JLN Sports Complex and the

Commonwealth Games Village that was constructed by DDA near Akshardham Temple. The

road alignment was approved as late as 09-04-2008 though work had been initiated on 12-

06-2006. This was largely because GNCTD was initially in favour of construction of a tunnel

link from Ring road to Lodhi road and the Chief Minister of Delhi had even gone on record to

state that the elevated road over Barapuliah Nullah did not have much legacy value5

. The

work of providing connecting links to the Elevated Road from and to Lala Lajpat Rai Marg

was also taken up at a later stage.

2.2 In order to enhance the legacy use of this project, GNCTD proposes to take up the

construction of links between JLN Stadium and Aurobindo Marg near INA and between Star

City Mall on the eastern side of river Yamuna and Ring Road near Sarai Kale Khan in phases

at a future date.

Project at a Glance S.No. 1 Sanctioned Cost (26.08.2008) –

Elevated Road 498 Crore

2 Sanctioned Cost (08.07.2009) – for connecting links

51 Crore

3 Name of the Division Commonwealth Works Division – 111, PWD, GNCTD

4 Name of Consultant M/s Tandon Consultants Pvt. Ltd 5 Date of issue of Tenders 02-07-2008 6 Eligibility criteria for contractors Contractors of Category ‘A’(for Flyover works

costing more than 100 Crore) borne on the empanelled list of GNCTD dated 19-05-08)

7 Name of Contractor for both Packages M/s DSC Ltd. , 8 Date of commencement of work 11-09-2008 (for both Packages) 9 Date of award of work for connecting

links 14-07-2009

5 See letter of Delhi CM dated 17th March 2008 addressed to Minister, HRD at Relevant Document 2A


23

10 Stipulated date of completion (for both Packages)

10-03-2010

11 Actual date of completion (for both Packages)

22-09-2010

12 Likely date of completion of connecting links

May , 2011

13 Awarded cost of work (for both Packages)

433.71 crore

14 Likely Completion cost of Elevated Road

390 crore

15 Cost per sqm - 56,000 16 Likely Cost of Connecting links 50 crore 17 Cost per sqm - 46,300

Master Plan 2.3 To facilitate the movement of players during CWG from Games Village to JLN

Stadium, Elevated Road on Barapulla Nullah has been provided between East Delhi and

South Delhi based on MPD-62 (Master Plan of Delhi – 1962). This link is a part of the main

link which consists of 3 parts i.e.

(i) the portion from Star City Mall on the East of river Yamuna to Ring Road near Sarai Kale Khan on the West of the river;

(ii) the portion from Ring Road to JLN Stadium; and

(iii) the portion from JLN Stadium to Aurobindo Marg near INA.

Clearance by Regulatory Authorities 2.4 An alignment proposal was made on 12-06-2006 and submitted to various

Regulatory Authorities. After considering various alternatives, the present alignment was

cleared on 20-06-2008. The formal approval by the Governing Body of Unified Traffic &

Transportation Infrastructure (Planning & Engineering) Centre (UTTIEPC), under the

Chairmanship of the L. G. Delhi, was accorded on 20-03-2009.

Preparatory Work 2.5 A preliminary estimate was prepared and submitted for approval on 10.06.08 for

499 crore. This was revised to 498 crore based on tenders received which were considered

reasonable and justified. The preliminary estimate stipulated a total period of 24 months

including 02 months for preparatory works. It was stated that the Consultant had already

been appointed for preparation of NIT. Rates adopted in the estimate were based on


24

approved tendered rates of flyover at Mukarba Chowk, Ghazipur, Raja Ram Kohli Marg and

other such works of DMRC during the last quarter of 2006-07, modified by adding 10% to

bring them at par with the market rates and also to take care of other cost influencing

factors like:

• A factor of 7.5% was applied for limited time available for construction, investment

required for shuttering, temporary works, establishment costs, T&P and machinery.

• Pier height significantly high

• Alignment crosses major roads requiring obligatory clearances

• Central span length as long as 100m in continuous modules; and

• Two contractors will be required to complete the project within the available time

frame; this increased the establishment and T&P costs of the project

• Cost also included costs for shifting of services, works contract tax, computerization

of records, and purchase of software, traffic diversion scheme and contingencies.

M/s Tandon Consultants Pvt. Ltd. were the Design Consultants for this project.

2.6 Sanction for 498 crore was accorded in terms of approval by EFC in its 6th meeting

of the year 2008-09 held on 30.07.08 and by the Council of Ministers vide Cabinet Decision

no. 1437 dated 18.08.08. Sanction of the project was conveyed to PWD on 26.08.08.

2.7 Tenders were issued on 2.7.08 to firms of category A (for flyover works costing more

than 100 crore) borne on the empanelled list of GNCTD dated 19.05.08.

Contract Details 2.8 For tendering purposes, the work was divided into two packages namely, Package 1

and Package 2. The sanctioned detailed estimate of both Packages stipulated that the

estimate was based on market rates. The analysis of rates adopted was of MoRTH wherever

applicable otherwise based on assessment. The coefficients of MoRTH were suitably

modified considering the difficult site conditions, foul conditions, height of the road,

squeezing of time period i.e. time period of 18 months for execution etc. The tendering

process was initiated in anticipation of A/A & ES.

2.9 The detailed estimated cost put to tender was reduced by 10% (as discussed with

Finance Secretary, GNCTD) to eliminate the enhancement over 2006-07 rates adopted in the


25

preliminary estimate. Justified rates based on market rates were prepared by Consultant

and checked by the Department.

Justified Rates 2.10 The procedure for arriving at justified amount was discussed in the Delhi Works

Advisory Board meeting held on 20.08.08. During the meeting of experts of HLC with the E-

in-C, PWD, it was stated that the justified cost had been worked out taking into account

various elements viz., time constriction, extra height, extra mobilization of plant /

equipment / support system, difficult working conditions, combination of various modern

technologies etc. Though the lowest bidder in both the packages was the same, separate

agreement had been signed for each package. It was stated that stringent provisions had

been kept to ensure quality of construction and timely completion of the project. The

package wise details are given in Annexure 2 A.

Delay in commencement 2.11 The alignment proposal was initiated on 12-06-2006. The proposal remained adrift

with various alternatives being proposed, turned down, examined and re-examined by

Government until a final decision was taken to construct the Elevated Road over Barapullah

Nullah on 09-04-2008. The chronology of events has been given in Annexure 2 B.

Reasons for delay in completion of works 2.12 The project with stipulated date of start as 11th September, 2008 was scheduled to

be completed by 10th March, 2010. It was put to use for CWG 2010 on 22.9.2010, just ahead

of the commencement of Commonwealth Games, after missing several deadlines set by the

Chief Minister, Delhi. The HLC was informed that the delay had occurred mainly due to the

following reasons:

• Non availability of land (to be made available by PWD as per Agreement) from DDA

for preparatory works like casting yard etc. DDA was requested for allotment of land

on 25.08.08 and the land was allotted by DDA on 13-1-09. In the meantime, the land

belonging to Delhi Transco limited was made available on 24.10.08 / 17.11.08 i.e.

one and half to two months after award of work.

• Delayed receipt of various approvals from Ministry of Railways. Drawings were

submitted to Railways for approval on 1st June, 2008 but the approval came on 17th


26

July, 2009. Approval from the Commissioner of Railway Safety was received on 20th

September, 2009 i.e. 12 months after award of work. A chronological history is at

Annexure 2 C.

• In January 2010, Railways informed that the construction of cast-in-situ span

between Piers 32 and 33 should not hamper the construction of their Road Under

Bridge which was taken up by them while the work on Barapullah Elevated Road was

in progress. Railways suggested that in view of this requirement, the PWD should

bridge their cast-in-situ span instead of supporting the proposed cast-in-situ

construction from ground as per normal practice. This change forced redesigning of

support system of cast-in-situ construction and rescheduling of the work in this span

and adjoining two spans and delayed the work further by 60 to 75 days.

• Thereafter, traffic blocks for launching the precast segments over railway tracks

were issued for working during night hours only in May 2010.

Due to above delays, the officers reported that the construction period stretched into the

rainy season of the year 2010 which resulted in further delays.

Additional Work

2.13 Even when construction of Elevated Road over Barapulla Nullah had commenced,

the Delhi Traffic Police, in the first quarter of 2009, demanded provision of connectivity to

the Elevated Road from & to Lala Lajpat Rai Marg by providing loops on either side of the

Elevated Road before the CWG at all costs6

Request made by Delhi Traffic Police for two connectivities

. The chronological history of the same is given

below:

21-01-09

PWD informed Empowered Committee that the work can be taken up in Phase-II only .

02-04-09

Delhi Traffic Police requested PWD for reconsideration 22-04-09

Preliminary Estimate submitted by PWD to Govt. 09-06-09

Sanction accorded by Govt. of Delhi for 51 Crore 08-07-09

Permission given by the Government for getting the work executed under deviation in the existing Agreement of Package-II of Elevated Road over Barapulla Nullah

14-07-09

6 See letter dated 24.04.2009 at Relevant Document 2B.


27

2.14 The additional work was executed under the existing Agreement of Package-2 of

Elevated Road over Barapulla Nullah due to the following considerations:

• To avoid loss of time in the formality of calling of tenders etc.

• Difficulty in finding suitable casting & fabrication yard for such an agency near

the works site as the two loops pass through heavily built up area.

• With two different agencies working side by side there would have been

several logistic problems including coordination and matching of precise time

schedules in various interlinked activities.

2.15 However, this additional work could not be completed before the CWG on

account of the reasons cited as under:

• 800 mm diameter sewer line was causing obstruction to the Moolchand side

connectivity. During discussions, the EE informed that in June, 2010 the Delhi

Jal Board expressed its inability to remove / divert the said sewer line and

desired that the PWD itself should get it done. The shifting of sewer line could

be completed only in September, 2010.

• High Tension Electric line and some other utilities causing obstruction were

shifted during May, 2010.

This work is now likely to be completed by May 2011.

Likely Completion Cost of the Work

2.16 Based on present status of work and an analysis of the pending bills, it is

estimated that the final cost of construction of main work would be about 390 crore.

The average cost per square metre would in that case be about 49,872 (say, 49,900).

The final cost of additional work in Package II is expected to be about 50 crore with

average cost per square meter being 46,300.

Contract Management

Consultant’s contract with M/s Tandon Consultant Pvt. Ltd. 2.17 Professional Indemnity Insurance Policy, which was to cover the period from


28

26.03.2008 to 25.03.2009 was actually issued on 3rd September, 2008.. Thus, there was

no insurance between 26.03.2008 to 02.09.2008 although it was covered in the policy

issued on 03.09.2008.

2.18 The Consultant, M/s Tandon Consultant Pvt. Ltd. is reported to be the one who

had designed Pier No 76 of DMRC near Jamrudpur that had collapsed resulting in

fatalities. They were reportedly blacklisted by DMRC. The EE clarified during

discussions that the said incident had occurred after the award of consultancy contract

for this work. It was not explained whether any rechecking of the design of this work

was sought or done after the said incident had occurred near Jamrudpur.

Construction Contract 2.19 Item No. 1.6 of the BOQ provides for lateral load test of piles. No such test was

conducted in either of the two Packages. The reason for dispensing with this test and

the authority who directed to dispense with the same was not forthcoming. However,

the EE intimated that two sets of lateral load tests were carried out in the portion

coming over Railway tracks and found to be as per norms and it is also contemplated to

carry out lateral load test for the piles provided for the work of connecting links

(Additional work being executed under Deviation) as the strata is the same and the test

results will be representative of the entire stretch. The fact remains that a contractual

obligation was not carried out.

2.20 The Third Party Quality Assurance Agency (TPQA) {Delhi College of Engineering

(DCE)} was required to regularly inspect the work and submit monthly consolidated

report. Though they carried out regular inspections and issued inspection reports from

time to time, they did not submit these reports in consolidated manner at the end of

the month. On issuance of show cause notice on 27th January, 2010, the TPQA (DCE)

started submitting reports.

2.21 Maintenance of Site Records is an essential feature of any construction work.

However, Inspection and Hindrance Registers were not found maintained. The EE

informed during discussions that the purpose was achieved through letters.

2.22 BOQ Items 6.4.3 & 6.4.4 of Bituminous Macadam and Dense Bituminous

Macadam, respectively, had apparent errors in their nomenclatures which could give


29

rise to disputes. This appears to have happened due to lapses of the Consultant who

prepared the BOQ. The EE informed that the Consultant has been warned that if these

errors result in undue payment to the contractor the cost will be recovered from the

Consultant.

Conclusions 2.23 Based on examination of documents, files related to the Project and interviews

with engineers, the major observations of the HLC are as under:

Cost of Delay 2.24 The site for Games Village near Akshardham Temple was decided in 2003 itself.

The need for a direct link between the Games Village and the Jawahar Lal Nehru Sports

Complex was known since that time. Various alternative alignments were being

explored since 2006. The process could have been started in 2004 itself and an

alignment decided much earlier. In that case it would have been possible to appoint a

consultant, frame estimates, call tenders and award the work on contract, following a

normal time frame, in 2005. The work, including connecting links to Lala Lajpat Rai

Marg, could easily have been completed in 2008. The cost of the work, including

connecting links, would in such a scenario have been about 331 crore as against the

present cost of 440 crore i.e. at a staggering saving of 109 crore. Thus, the delay in

decision making cost the Government dear.

2.25 During the intervening period from June 2006 to January 2008 the matter

remained under correspondence / consideration / approval by various Regulatory /

Government agencies i.e. ASI, DUAC, Zoo Authority, Traffic Police, DDA, Delhi Wakf

Board etc. In fact, the commitment of GNCTD to this project till the year 2007 was also

wavering at best.There was undue delay in the approval of alignment. The process

started on 12-06-2006 and decision was finally taken on 09-04-2008. Due to delay in

Box 1: Non compliance with Quality Control measures

The contractor, M/s. DSC Ltd., did not comply with Quality Control measures such as conducting lateral load test of piles, which were extremely important keeping in view that the entire stretch was an elevated corridor. PWD officials also did not insist on the same.


30

approval of the road alignment, the Estimation and Tendering processes for the work

could start only in 2008, resulting thereby in late start of work and crashing of time for

execution of the work to 18 months and consequent escalation in cost of work

including connectivities at a likely cost of 440 crore.

2.26 Similarly, though the Railways were being constantly approached for according

various approvals they were neither prompt nor showed a sense of urgency in the

matter.

Poor Monitoring mechanism 2.27 It was observed that the Monitoring Committee under the Chairmanship of the

Chief Secretary, GNCTD failed in its responsibility of monitoring and taking prompt

decisions, as seen from the delays in approval by various Authorities. Perhaps the

Monitoring Committee did not have any proper and effective monitoring mechanism.

Poor planning & coordination 2.28 Notwithstanding the insistence of Delhi Traffic Police on completion of the two

connecting links to and from Lala Lajpat Rai Marg before the commencement of CWG

2010 at all cost, authorities should have known that it was almost impossible to do so

since the shifting of High Tension Electric Line and 800 mm diameter DJB Sewer Line

was likely to take time. The connecting links could not be completed before CWG 2010

and are now expected to be completed only by May 2011.

2.29 In view of the twin constraints mentioned above, it would have been more

appropriate and prudent to call for separate tenders for this additional work and

provide normal construction period. This would have resulted in fair competition and

cost savings of about 3.49 crore.

2.30 On the other hand, if this additional work had been part of the main work and

Box 2: GNCTD’s first choice was ‘tunnel’ link

It is evident from the records of the GoM that Chief Minister, GNCTD, was in favour of construction of a tunnel link starting near Millennium Park on Ring road to Lodhi Road. This project was opposed tooth and nail by ASI and ultimately had to be abandoned. But not before a good two years were lost in the process.


31

taken up in the year 2007 with a 3 year period of completion, the cost saving within the

component of this additional work itself would have been 8.85 crore.

2.31 HLC is of the view that the decision to take up the additional work of two

connecing links under the existing contract was not a prudent and well thought out

decision. The work could not be completed in time and Government has also had to

bear the additional cost due to its categorization as ‘emergency’ work.

No rationale for Two Packages 2.32 No records are available to show the reason why both the packages were

awarded to a single contractor! Why was a condition not incorporated that a single

agency would not be awarded both the packages and why, in the alternative, an option

was not given to the tenderers that they could offer a discount for being awarded both

the packages. Any prudent person would have sought and obtained discount for

awarding the second package to the same agency on the ground that there would be

savings on the establishment, T&P, machinery etc. Loss due to aforesaid lapse is

assessed at 4% of the cost of Package 2 i.e. 6.32 crore.

2.33 Had timely action, as detailed in foregoing paras been taken, the work would

have been taken up for construction latest by August, 2007 enabling normal

construction time of 3 years required for a work of this magnitude and nature. This

would have resulted in much lower tendered costs as there would not have been any

necessity of increase in men and material costs @ 10% over 2007 rates and further

enhancement of the rates by 7.5% for limited time available, for completion of work by

August 2010 i.e. much before October, 2010, the month during which the CWG were to

be held. Further award of two packages to a single contractor had resulted in saving in

establishment costs to the said contractor as considered by the Department itself. This

cost is assessed to be 4% of the cost of the work. Thus the saving effected, would have

been 74 crore as detailed below:

i. Total likely cost of the work including connectivities 440 crore

= (390 + 50) crore

ii. Saving in cost had the work been taken up in 2007 37.44 crore

instead of 2008 = 10% of the total cost i.e. 440/1.175 crore plus


32

iii. Saving in cost for limited time available @ 7.5% of 28.09 crore

the total cost i.e. 7.5% of 440/1.175 plus

iv. Saving in Establishment cost @ 4% of

(i) Package 2 = 390/(205+201)x201x1/1.175x0.04/1.04 6.32 crore

(ii) Additional work of connectivities = 50x0.04/1.04 1.92 crore

Total = (a+b+c+d) 73.77 crore

Say 74 crore

Likely Savings if work had commenced early 2.34 Further, if the work had been taken up in the year 2005 as detailed in para

2.24 or in the year 2006, the saving, based on approved Cost Indices (approved by

Director General, CPWD) would be as below:

Year Cost Index Cost i/c connectivities Likely Saving

2008 114 (in 4/08) Actual Cost 440 crore -

2007 (440 – 74) Crore= 366 crore

74 crore

2006 90.77 (in 4/06) 440x90.77/114= 350 crore

90 crore

2005 85.77 (in 4/05) 440x85.77/114= 331 crore

109 crore

Box 3: Responsibility for Delay

The inspection reports of Special Advisor, CWG indicates that the contractor delayed the projects and went on revising the project milestones in every review, mainly because his own failures, like delay in fabrication and mobilisation of launching girders, labour problems due to non-payment, problems with his suppliers who were not paid in time, contractor’s reluctance to put in additional efforts like night working.

This is all the more astounding because the Contractor had quoted a higher price assessed at 28 crore only on account of compressed time frame for completion.


33

Undue Gains to Contractor 2.35 It is observed that on account of bidding being confined to a set of prequalified

contractors and acceptance of ‘higher’ tenders, the contractor has received “undue benefits’

as his quoted price was considered justified and accepted. In Barapullah Project, the price

quoted was 23-24% higher than the estimated cost. Since the rates for most of the items in

this project were analysed on the basis of MORTH Data Book, which provides for the

coefficients for labour, material and machinery, and the Department had input the prevailing

market rates for arriving at the cost estimate, there was no justification for such high rates,

especially because the time gap between estimates and the tenders was only 2-3 months.

Assuming that the contractor might have factored in the risks involved in executing this high

profile time bound project to the extent of 5% (say for example liquidated damages for delay)

and costs involved in accelerating the project by another 6 or 7%, (actual cost considered in

Barapullah project is 7.5%), the maximum justification for the rates, prima facie, appears to be

of the order of about 12%. Thus, the contractor of this project has got ‘undue gains’ to the

extent of at least 12%, if not more. This works out to about 53 crore.

Legacy Use 2.36 The HLC notes that the project does not have any significant legacy use at present. Since

during the period of the Games, Delhi Traffic Police had reserved a dedicated lane for

movement of Games related vehicles on major arterial roads leading to various Games venues

from the Games Village, the objective of ferrying athletes and officials to JLN Sports Complex

in the shortest possible time could have been served through use of dedicated CWG lane. This

would have avoided blocking of capital of 440 crore unnecessarily till a new bridge on river

Yamuna linking East Delhi with this road and the portion linking it to Aurobindo Marg as per

approved Plan are taken up and completed.

Box 4: Cost of Delay & ‘loss’ to Government

If work on this project had commenced in 2005, the cost saving has been assessed at 109 crore. Even if work had commenced in 2007, there would have been savings of 74 crore.

Since the work of both packages was awarded to the same contractor, PWD should, through negotiation, have sought and obtained discounts from the contractor of 8.24 crore on account of lower establishment cost etc. This can be construed as ‘loss’ to Government.

The undue gain to contractor is estimated at about 53 crore.


34

Chapter 3: Ring Road Bypass

Background

3.1 In May 2006, the GNCTD decided to construct a Ring Road Bypass between

Velodrome Road and Salimgarh Fort. The approval from the various authorities was finally

obtained by 7th December, 2007.

3.2 The Preliminary Estimate for the project was 661.40 crore and the same was

approved on 5th May, 2008 for 654.39 Crore. The estimated date of completion for the

project was before October 2010 as per the AA&ES.

3.3 The contract for the construction was awarded for Package I and II on 7th January,

2009 and 5thDecember, 2008 respectively. Both the contracts were awarded for a period of

18 Months. Though the project was in use during the Commonwealth Games, they have not

yet been handed over to PWD as some finishing and touch-up works are in progress.

Project Details

3.4 The details of the project are given in the table below:

Table 1: Details of the project Particulars Details Date Preliminary Estimate prepared

661.4 crore 09.01.08

AA&ES 654.39 crore 05.05.08 Participants in bids for Engineering Consultant

1. B&S Engineering Consultants 2. Tandon Consultants Pvt. Ltd. 3. L&T Ramboll Engineering Consultants

Winning bidder for engineering consultant

B&S Engineering Consultants 1.24 crore

07.05.08

Participants in bid for construction of Package I First Call

1. Gammon India Ltd. 2. Simplex Infrastructure Ltd. 3. DSC Limited 4. Afcons Infrastructures Ltd. 5. ITD Cementation India Ltd.

-

Participants in bid for construction of Package I Second Call

1. Simplex Infrastructure Ltd. 2. Gammon India Ltd. 3. DSC Limited

-

Successful Contractor Simplex Infrastructure Ltd. - Appointment of Contractor for Package I

194 crore 07.01.09

Estimated time for completion

18 Months -


35

Stipulated date of completion July 2010 - Cumulative amount billed till last RA bill

161 crore -

Participants in bid for construction of Package II

1. Simplex Infrastructure Ltd. 2. DSC Limited 3. L&T Ltd. ECC Division

-

Successful Contractor Simplex Infrastructure Ltd. - Appointment of Contractor for Package II

214 crore 05.12.08

Estimated time for completion

18 Months -

Stipulated date of completion July 2010 - Cumulative amount billed till last RA bill

133 crore -

Summary of Findings # Observation

1 There was a time gap of 19 months in obtaining ‘no objection’ certificate from various agencies.

2 An extra premium of 25% for labour and machinery was paid to the contractor on account of time compressions. The additional cost implication attributable to this is to the tune of 13 crore

3 The project was divided without citing any reason for the same. Eventually both contracts were awarded to same contractor. But the negotiating officers did not ask for any rebate for award of both packages on the lower of the two rates which could have led to possible savings of 24 crore

4 An additional two months was taken in inviting bids for Package II as compared to Package I

5 The tender for Package I was recalled as the rates quoted by the lowest bidder were more than the justified cost which was 14% above Detailed Estimate. The NIT for second call was floated one month after Lowest bidder refused for further negotiation. It was observed that in the second call the Justified cost increased from 14% above Detailed Estimate in the first call to 17 % in the second call though time gap was only 3 months.

6 The Justified cost for both the packages appears to be inflated by about 23.34 crore in comparison to the DSR rates of 2007, after adjusting for the cost indices for the year 2008.

7 The tenders for both the packages were approved two months after rate negotiation 8 The cost implication of delays in the start of the construction is 35 crore. This is a

notional calculation, based on assumptions. 9 Back dated changes made in the Hindrance Register after the observations by CVC’s

Chief Technical Examiner


36

Main Observations

Delay in obtaining ‘no objection’ certificate

3.5 In the meeting held at the Office of Chief Secretary Govt. of NCT on 16th May, 2006 it

was decided to go ahead with the proposal and seek the approval from various authorities7

1. High power Samadhi Committee

.

Agencies which were approached for providing ‘No Objection Certificate’ (NOC) were as

under:

2. Working Group (Road alignment) constituted by Ministry of Urban Development

3. Delhi Urban Arts Commission on 10th September, 2007 vide letter

no.19(12)2006/DUAC

4. Yamuna Samiti on 31st January, 2007 vide letter no.16/1/YC2006 BP 1/49-68

5. Yamuna - Removal of Encroachment Monitoring Committee

6. Traffic Police and security unit of Delhi on 27th October, 2007 vide letter no.

M/1/125/02/19641/X-III(A) DHQ

7. Approval by ASI on 12th December, 2007 vide letter no. 12/445/2206-NOC-9979

8. Technical Committee of DDA

The date by which all the approvals were available was 12th December, 2007.

Preliminary Estimates (PE)

3.6 The office of Chief Engineer CW-1 submitted on 9th January, 2008 the Preliminary

Estimate of 661.40 crore for approval of Govt. of Delhi. The estimated time completion for

the project as per the PE was 30 months. (6 months was for getting AA&ES and award of

contract; plus 24 months for the construction)

Administrative Approval and Expenditure Sanctions

3.7 The EFC8 of the Govt. of Delhi accorded the AA&ES for an estimated cost of 654.39

crore on 05th May, 2008 vide Sanction no.II/10/2008-09 F 4(8)/2006/PWD-III/489-99.

7 DUAC, Yamuna Encroachment Removal Committee, Samadhi Committee, ASI, Traffic Police etc 8 Expenditure Finance Committee


37

Detailed Estimate and NIT

Appointment of Engineering Consultant

3.8 M/s B&S Engineering Consultant was appointed the Engineering consultants on 7th

May, 2008 for a tendered amount of 1.24Crore.

Splitting of the project in two packages

3.9 The project was split into two packages while preparing the detailed estimate and

floating the NIT. However there is no document or record on files to justify the need for

splitting the work into two packages

Approval and Press Notice

3.10 The relevant facts regarding the bidding process is given in the table below:

Table 2: Approval and Press Notifications Details Details Package I Package II

Date of preparation of Detailed Estimate

10th July, 2008 05th September, 2008

Date of approval of NIT

11th July, 2008 04th September,2008

Date of publishing of NIT

07th July, 2008 08th September, 2008

Eligibility for bidding

Contractors pre-qualified under Category A list of P.W.D, GNCTD for the construction of Flyovers/Bridges/ROBs costing more than 100 crore

Contractors pre-qualified under Category A list of P.W.D, GNCTD for the construction of Flyovers/Bridges/ROBs costing more than 100 crore

Date of Pre-bid meeting

08th October, 2008 23rd September, 2008

Date for submission of bids

13th October,2008 29th September,2008

Cost mentioned in the NIT

157 crore 183 crore

Awarding of contracts

Contract details of Package I

3.11 The Pre-bid meeting was held on 25th July, 2008 and, as per the request of all the

applicants, the last date of tender submission was extended from 29.07.2008 to 05.08.2008.

The financial bids were opened on 05.08.2008. The details of the bids received are given in

the table below:


38

Table 3: Status of Bidders for Package I first call Contractor Name Value Comments

L1 M/s Gammon India Ltd. 206 Crore 31% above the EC

L2 M/s Simplex Infrastructures Ltd.

210 Crore 34% above the EC

L3 M/s DSC Limited 233 Crore 48% above the EC

L4 M/s Afcons Infrastructures Ltd.


L5 M/s ITD Cementation India Ltd.


3.12 As the rate quoted by Gammon India, L1, was more than 10% above the EC, justified

cost was prepared which worked out to be 14% above the estimated cost of 157 crore.

M/s Gammon India Ltd.’s bid was 17% above the justified cost and they were called for

further negotiation to the Office of Chief Engineer.

3.13 The negotiation meeting was held at the Office of Chief Engineer on 22.08.2008

wherein they refused to consider any reduction in the rates for the said work. The same was

confirmed in writing through their letter no. P/9365 A dated 26.08.2008.

3.14 As per the decision of DWAB in the meeting held on 23.09.2008, the tender was

recalled. The Notice for recall was posted on the website of the Department on 24.09.2008

and the press notice for the same was published on 26.09.2008.

3.15 The Pre-bid meeting for the second call was held on 08.10.2008 which was attended

by the bidders. The financial bid was opened on 13.10.2008 and the standing of the bidders

was as under:

L1 M/s Simplex Infrastructure Ltd. 195 crore 24% above the EC

L2 M/s Gammon India Ltd. 206 crore 31% above the EC

L3 M/s DSC Limited 227 crore 45% above the EC

3.16 As the amount quoted by the L1, M/s Simplex Infrastructure Ltd, was more than 10%

above the estimated cost, a fresh justified cost was prepared, which came out to be 17.62%


39

above EC, as against the justified cost of 14% above EC in the First call. The following reasons

were given by the Project Manager and EE for the increase in the justified cost:

• Increase in the rates of Aggregate since July 08 rates based on which the previous

justification was prepared

• Increase in the rates of Bitumen since July 08 rates based on which the previous

justification was prepared

• Increase in the minimum daily wages to labour from August 08

3.17 As per the recommendation of the Project Manager and Executive Engineer, a

negotiation meeting was held with M/s Simplex Infrastructure Ltd. on 16.10.08. Item no.7.6

(Manhole chambers) and 7.7 (Extra depth for Manhole chambers) were agreed to be

removed from the scope of Contractor as the rates quoted were very high and not agreeable

to PWD.

3.18 The confirmation of the acceptance, eliminating the two items, was sent to M/s

Simplex Infrastructures Ltd. on 7th January, 20099

Table 4: Details of Contractor - Simplex

.

Name of the contractor M/s Simplex Infrastructures Limited

Address “Vaikunth” (2nd Floor), 82-83,Nehru Place , New Delhi- 110019

PAN No./ TIN No. AAECS0765R / 07830225201

Date of Award 7th January, 2009

Estimated Cost (Detailed Cost) 157 crore

Value of Contract signed 194 crore

Period of Contract 18 months

Contract details relating to Package II

3.19 The Pre-bid meeting was held on 23rd September, 2008 and based on the request of

the bidders, the last date for filling the tender was extended from 25th September, 2008 to

29th September, 2008. The Pre-bid meeting was attended by all the three contractors who

9 Confirmation sent vide letter no. 54(17)/RRB1/EE-121/PWD/2009/10 dated 07 January,2009


40

purchased the tender namely M/s Simplex Infrastructures Ltd., M/s Larsen & Toubro Ltd. and

M/s DSC Limited.

3.20 After opening the tender on 29th September, 2008 the status of the contractors was

as under:

L1 M/s Simplex Infrastructure Ltd. 214 crore 24% above the EC

L2 M/s DSC Limited 252 crore 46% above the EC

L3 M/s Larsen & Toubro Ltd. 272 crore 57% above the EC

3.21 The justified rates worked out were found to be 200 crore i.e. 16.30% above the

estimated cost of 172 crore. The amount mentioned in the press notice was approximately

183 crore.

3.22 As per the opening of bid and the worked out justified rates, the recommendation

was sent by the Project Manager and Executive Engineer to the Office of Chief Engineer for

further negotiations on 7th October, 2008.

3.23 The acceptance for the contract was confirmed to the Contractor on 5th December,

2008, i.e. 1.5 Months after the final negotiation meeting and after the meeting of DWAB was

held on 1st December, 2008.

Table 5: Details of contractor Package II Name of the contractor M/s Simplex Infrastructures Limited

Address “Vaikunth” (2nd Floor), 82-83,Nehru Place , New Delhi- 110019

PAN No./ TIN No. AAECS0765R / 07830225201

Date of Award 5 December 2008

Value of Contract 2,14,73,63,432

Period of Contract Package 2- 18 Months

Delay in completion of procedural formalities

3.24 As is evident from the chronology of events given in table below, it was observed

that there was a time gap of nineteen months in the start of the project on account of time

spent in seeking the No-Objections and clearance from various authorities as mentioned in


41

Para 0. Subsequently there were delays in according AA&ES and in preparation of detailed

estimate for Package II.

Table 6: Chronology of events leading up to the commencement of construction Events Date Time taken

Conceptual approval by Chief Secretary 16th May, 2006 Approval by various authorities 12th December, 2007 19 months Preparation of PE for AA&ES 9th January, 2008 Administrative approval & Expenditure Sanction

5th May, 2008 4 Months from the date of submission of PE

Appointment of Engineering Consultant 7th May, 2008 Preparation of detailed estimate and NIT for Package I

10th July, 2008 2 months from appointment of Engineering Consultant

Preparation of detailed estimate and NIT for Package II

5th September, 2008 4 months from the date of appointment of Engineering consultant

Opening of Bids for Package I 5th August, 2008 Forwarding memo to CE 12th August, 2008 Negotiation with Gammon India Ltd. 25th August, 2008 Start of retendering process 24th September, 2008 1 month after the rejection of

the tenders in first call Recall for Package I 26th September, 2008 Opening of Bids for Package I 13th October,2008 Negotiation with Simplex 16th October ,2008 Award of tender to Simplex 7th January, 2009 2.5 months after the

negotiations Opening of Bids for Package II 29th September ,2008 Forwarding memo to CE 7th October,2008 Negotiation with Simplex 13th October, 2008

16th October, 2008

Award of tender to Simplex 5th December, 2008 1.5 months after the negotiations

Chronology of the delay in obtaining NOC 3.25 The entire process of obtaining NOCs from various agencies took 19 months i.e. from

16th May, 2006 to 12th December, 2007.

3.26 HLC carried out an analysis of the delay in decision making and the time taken by

respective agencies in giving NOC. This analysis is tabulated below. As can be seen, the

proposal for NOC was with PWD for almost 9 months and with ASI for 10 months.


42

Table 7: Time taken by PWD and ASI in giving NOC

# Date Description Duration Duration Attributable to

(in days) PWD ASI

1 16-May-06

Conceptual approval to the project was provided by Chief Secretary, GNCTD

2 30-Aug-06 PWD sent the proposal and details to all the agencies for NOC

106 Days from date of conceptual approval

106

3 19-Sep-06 DDA letter asking to get NOC from Yamuna Samiti and ASI first

19 days from the date of proposal

4 25-Oct-06 ASI raised queries and requested for drawings and site inspection

56 days from the date of proposal

56

5 1-Nov-06 Reply from PWD and request for confirming site visit date

7 days from the letter from ASI

7

6 10-Nov-06 Discussion between ASI and PWD

7 17-Nov-06 Reply from ASI asking again for drawings and joint inspection

16 days from reply from PWD

16

8 20-Nov-06 Drawings from PWD with necessary clarification

19 days from the request from ASI

19

9 15-Dec-06 Letter from CS,GNCTD to ASI requesting faster resolution of the matter

107 days from the date of proposal from PWD

10 4-Jan-07 Letter from CS,GNCTD to PMO seeking intervention for faster resolution of the matter

127 days from the date of proposal from PWD

11 31-Jan-07 Clearance from Yamuna Samiti 154 days from the date of proposal from PWD

12 7-Feb-07 ASI asked PWD to redraft the proposal as in present situation road alignment is too close to Salimgarh fort

79 days from date of detailed drawings from PWD

79

13 29-Jun-07 Revised proposal from PWD 142 days from the date of refusal from ASI

142

14 11-Jul-07 Presentation on the revised proposal and ‘in principle’ approval from ASI

12 days after the submission of redrafted

12


43

proposal

15 30-Jul-07 Revised proposal to DDA,DUAC for approval

19 days from the date of presentation to ASI

16 1-Aug-07 DUAC letter asking for model of the project along with revised drawings

2 days from the date of redrafted proposal from PWD

17 14-Sep-07 ASI asking for more copies of drawings 65 days from date of revised proposal from PWD

65

18 17-Sep-07 Reminder and additional copies of drawings sent by PWD to ASI

3 days from date of request for more copies of drawing

3

19 12-Dec-07 Clearance from ASI 86 days from date of detailed drawings from PWD

86

Total Time consumed in days 289 302

Cost implication (Notional) of delayed start 3.27 Had the delay mentioned above been avoided, the project could have been started

in the month of January 2008. The value of contracts executed, in December 2008 and

January 2009, was 410 Crore. Had these contracts been executed in or around January 2008,

the potential cost savings could have been to the extent of 35.38 Crore as mentioned in

Table below.

Table 8: Potential Savings in cost had project been started without delay # Assumed

Project Start Date

Building cost index(1)

Potential Saving (in Months)

Cost of Project with start date as per col. A ( in crore)

Tender cost ( in crore)

Saving Amount ( in crore)

Saving (in %)

A B C D E F=(E-D) G=(F/E) 1 Jan-09 116 0 410.38 410.38 0.00 0.00% 2 Jan-08 106 12 375.00 410.38 35.38 8.62% 3 Oct-07 100 15 353.78 410.38 56.60 13.79% 4 Jul-07 99 18 350.24 410.38 60.14 14.66%


44

Observations

Cost implication of 25% ‘premium’ paid for time compression

3.28 As per the contracts, a premium of 25% was paid to Simplex on labour and

machinery cost due to compressed time schedule. On the basis of an analysis carried out,

had the delays mentioned in Para 0.5 been avoided, the potential saving to the government

on labour and machinery could have been to the tune of 5.1 Crore and 8.55 Crore for

Package I and Package II respectively. Refer Annexure 3A and Annexure 3B for this

calculation.

Different rates adopted in the packages for same items

3.29 It was observed that rates of items in package II were higher than the rates for the

same items in Package I. Since the negotiation meeting was held in the office of Chief

Engineer on 13th October, 2008 for Package II and on 16th October, 2008 for Package I,

uniform rates should have been applied for both the packages. This was not done as is

evident in comparison of the rates for two packages. Refer Annexure 3C for a comparison of

rates between package I and II.

3.30 Since the rates for both the packages were available, the lower of the two rates

quoted by the Contractor M/s Simplex Infrastructure should have been negotiated. Had the

lower of two rates been considered, the total cost saving to the Government could have

been to the tune of 24 crore. In other words, the total tendered cost, based on lower rates,

for both the Packages put together could have been 386 crore instead of 410 crore

resulting in a potential saving of 24 crore i.e. around 6%. Refer Annexure 3D for the cost

saving had the lower of two rates been considered.

Charging of potentially inflated rates

3.31 It was observed that the rates for certain basic materials considered by PWD for

arriving at justification of the tendered cost appear to be higher than the DSR of 2007, after

applying the 2009 cost indices. The DSR 2007 rates for seven items were obtained.

Thereafter, the cost indices for these items for the year 2007, 2008 and 2009 were

downloaded from the website of Economic Advisor to the Ministry of Industries. These DSR

rates were thereafter adjusted by applying the relevant material cost index issued by

Ministry of Industry for the relevant years. The cumulative impact of these high rates on the


45

cost of Package of I and II could be to the tune of 11.5 crore and 11.8 crore in Package I

and Package II respectively. The details of these calculations are given in Annexure 3E.

3.32 It is a fact that in the Ring Road Project, the price quoted was 23-24% higher than

the estimated cost. Since the rates for most of the items in these projects were analysed on

the basis of MORTH Data Book, which provides for the coefficients for labour, material and

machinery, and the Department had input the prevailing market rates for arriving at the

cost estimate, there was no justification for such high rates, especially because the time gap

between estimates and the tenders was only 2-3 months. Assuming that the contractor had

factored in the risks involved in executing this time bound project to the extent of 5% (say

for example liquidated damages for delay) and costs involved in accelerating the project by

another 6 or 7%, (actual cost considered in Ring Road project is about 3%), the maximum

justification for the rates, prima facie, appears to be of the order of about 12%. Thus, the

contractor of this project has got ‘undue gains’ of at least 12%, if not more. This works out

to about 45 crore.

Cumulative impact of observations relating to rates

3.33 In the light of the observations made in foregoing paras 0, 0 and 0, the cumulative

impact on the cost of the two packages will be to the tune of 12.95 crore and 34.41 crore

for Package I and Package II respectively. (Refer Table below).

Table 9: Net Cost impact

Reference Package I Package II

Amount put to tender A 194.71 crore 214.73 crore

Premium paid for compressed time (Refer Annexure 1 and 2)

B 5.10 crore 8.55 crore

Estimated cost after reduction of premium C = A-B 189.61 crore 206.18 crore

Potential savings due to Economies of scale due to adoption of the lower of two tendered rates.

D 2.96 crore 20.89 crore

Estimated cost after above adjustments E= C-D 186.65 crore 185.29 crore

Cost impact of charging of potentially inflated rates

F 11.51 crore 11.83 crore


46

Estimated cost after above adjustments G=E-F 175.14 crore 173.46 crore

Net Savings that could have been achieved H = A-G 19.57 crore 41.26 crore

Observation in CTE report

3.34 During the examination of Package I, Chief Technical Examiner pointed out that a

milestone had been changed on the basis of an order of Project Manager acting on a

request of the contractor. The said request was made by the contractor for the release of

the payment withheld due to their failure in achieving the first financial milestone giving

some reasons which were not recorded in the Hindrance register. However the hindrances

were available in register at the time of this inspection. It appears that the records were

fabricated post CTE inspection.

Box 1: Undue Gains provided to Contractor

In this project, action /inaction of concerned senior officers of GNCTD provided ‘undue gains’ of about 47 crore to the contractor, M/s Simplex Infrastructure.


47

Chapter 4: Covering of portions of Sunehari Nullah & Kushak Nullah for providing Bus Parking near JLN Stadium

4.1 The project for covering a portion of Sunehari Nallah from Lala Lajpat Rai Marg

(behind Lodhi Hotel) to Dayal Singh College along Lodhi Road & portion of Kushak Nallah

from Jawahar Lal Nehru Stadium (South Gate) to IV Avenue Road, Lodhi Colony for providing

bus parking facility for CWG 2010 was one of the major projects undertaken by the

Municipal Corporation of Delhi.

Project at a glance

Particulars Details Date

Name of the Agency Municipal Corporation of Delhi (MCD)

Name of the Division Special Projects Division, Lajpat Nagar

Preliminary Estimate 325.5 crore Arrived at on the basis of Similar Project at Gautamnagar.

08-Aug-08

A/A & E/S 325.5 crore In-anticipation Approval for A/A & E/S from Mayor for this amount No detailed estimate prepared

14-Aug-08

Estimated Cost put to Tender 325.5 crore Sunehari Nallah: Rs. 165.5 crore, Kushak Nallah: Rs. 160 crore, Consultancy: Rs. 3 crore

Bids submitted by due date 4 Bidders Gammon, Punj Lloyd, IJM Corporation Berhad, SMS Infrastructure

(All qualified)

10-Nov-08

Financial Bids Punj Lloyd: 303.95 crore (L1)

Gammon: 327 crore IJM: 448.0688 crore SMS: 652 crore

27-Nov-08


48

Project Management Consultant CES India Pvt Ltd. Hired by MCD by separate tender process

11-Dec-08

Justified Cost CES submit justified cost at 321.32 crore (5.715% above L1 and 1.28% below estimated cost put to tender)

13-Dec-08

Contract Awarded LoI issued to Punj Lloyd : Design and Build Basis

19-Dec-08

Contract Value 303.95 crore 19-Dec-08

Structural and Design Consultant Sinclair Knight Merze. Hired by the contractor.

Project Start Date 12-Jan-09

Stipulated Completion Date Project duration - 16 months 11-May-10

Actual Completion Delay in removal of jhuggis from site, clearance of trees

31-Aug-10

Billing so far 2,929,043,781.53

Total Billing Expected 2,973,718,520.00

Likely Savings About 7 crore

Background 4.2 The decision to construct a bus parking over Sunehari and Kushak Nallah was first

conceptualized in June 2008 during a meeting between the Chief Secretary GNCTD and

senior Officers of the MCD, DDA, CPWD, NDMC and Transport Department. This decision

was taken rather late and reflects the ad-hoc manner in which decisions were being taken

by Delhi Government and other agencies concerned with construction and upgradation of

city infrastructure.

4.3 However, after June 2008 decisions were taken quickly. Approval of the Delhi

Government was received in July 2008, and the preliminary estimate was prepared for


49

325.50 crore in August 2008, based on a similar project undertaken at Gautamnagar (which

was a flyover project and was still incomplete).

4.4 Notice for pre-qualification of bidders was issued on 9th August, 2008. The last date

for submission of proposals was 1st September, 2008 (this was subsequently extended to

08.09.2008). ‘In anticipation approval’ for the A/A & E/S was received from the Mayor for

the same amount of 325.50 crore (no detailed estimate was prepared) on 14th August,

2008. The decision to appoint a Project Management Consultant was taken in August 2008.

4.5 EOIs were called and seven firms responded by the last date of submission (8th

September, 2008). Of these, six were pre-qualified. On 29th September, 2008, RFP was

issued on ‘design-and-build’ basis to the pre-qualified firms with 24th October, 2008 as the

last date for submission. Subsequently, the last date was first extended to 3rd November,

2008 and, finally, to 10th November, 2008. Four bidders viz. Gammon, Punj Lloyd, IJM and

SMS submitted bids by the due date, and on evaluation, all four were technically qualified

with Punj Lloyd scoring the least (73) and IJM the maximum (92). The qualifying mark was

70.

4.6 Individual presentations were made by all the four bidders on 18th November, 2008,

pursuant to which it was decided to have normalized quantities for all major items, and a

variation clause was decided on. In view of these changes, bidders were given an

opportunity to revise their financial bids. Only two of the four bidders, Gammon and Punj

Lloyd, proceeded to do so. Financial bids were opened on 27th November, 2008 and the

lowest bid was received from M/s Punj Lloyd for 303.95 crore.

4.7 By means of a separate tender, M/s CES were appointed as the PMC (there was only

one bidder) on 11th December, 2008. They were then asked to prepare the justified cost for

the subject project. They submitted the justification rate on 13th December, 2008 for

321.32 crore.


50

4.8 After obtaining the concurrence of Finance and Standing Committee resolution, the

work was awarded to M/s Punj Lloyd on 19th December, 2008. Detailed Project Overview is

given in Annexure 4A.

Conclusion 4.9 A summary of broad conclusions that emerge from the review of the files and

documents pertaining to the project have been shown in tabular form below:

Sl. No.

Observation

1 Governance Issues

1.1 Delayed decision making leading to delayed start

1.2 No detailed estimate.

1.3 Changes in eligibility criteria of consultant to be appointed by Contractor

1.4 Engagement of Project Management Consultant

1.5 Approval of A/A & E/S without Proper Estimate

1.6 Project Undertaken without Legacy/ Revenue Collection Plan

2 Delays in Execution

3 Insufficient discussion at Empowered Committee

Major Observations

Poor Planning 4.10 The decision to allot the subject work to MCD came about only in June 2008, as

mentioned above. This project was conceptualized rather late in the preparations for the

Commonwealth Games. The parking lots that were constructed over Sunehari and Kushak

Nallah were for the purpose of parking buses and cars that would bring the spectators to

Jawaharlal Nehru Stadium. Considering that JLN Stadium had been finalized as the venue for

the Opening and Closing ceremonies of the CWG in 2003, this requirement ought to have

been known at that time. Thus, the decision to construct the parking lots, the venue for the

same and the Agency that would take ownership for such construction should have been


51

decided much earlier and action should have been initiated along with upgradation of

Jawaharlal Nehru Stadium.

4.11 It has also been observed that though this project was discussed in the Empowered

Committee meetings from 1st Sep 2008 onwards, it was not monitored properly. Annexure 3

shows the details of the discussion in the Empowered Committee meetings. This project

could have been also monitored by Venue Monitoring Committee or the Group of Ministers.

Cost of Delay

4.12 Had this project been taken up in 2005, instead of waiting till 2008, the approximate

cost saving (based on cost escalation index) would be approximately 42.89 crores. The

detailed calculations are shown in Annexure 4B.

Loopholes in the entire process

4.13 The preliminary estimate for the contract, which was given A/A & E/S and was finally

adopted as the estimated cost put to tender, was prepared on the basis of the contract

value of another contract at Gautamnagar, which was still in progress. Thus, estimate has

been prepared on a theoretical basis, and is not founded on fact.

4.14 Further, though there were changes to the scope of the contract during the pre-bid

meeting, and components such as fencing, automated barrier system and public address

system were dropped from the scope, the estimated cost was not revised on this basis.

4.15 It is not clear why the eligibility of the Design and Structural consultant was changed

from ‘empanelled consultant’ (of the Department of Road Transport & Highways) to

‘consultant of repute’. The revised term is rather vague and does not provide specifications

of expertise/infrastructure that the consultant is expected to hold. This change in clause

would have provided the contractor an opportunity to hire a favoured consultant, rather

than one technically qualified and experienced to meet the requirements of the

Department. Punj Lloyd appointed M/s Sinclair Knight Merze as Structural and Design

consultants, however there is no documentation evidencing approval or evaluation of this

consultant by MCD. Only a letter is available, intimating appointment of such consultant by

Punj Lloyd to MCD. Further, there is no evidence available to show that the design


52

submitted has been vetted by the MCD. Punj Lloyd has had the design vetted by a Professor

from the Department of Civil Engineering at IIT, Delhi. However, the design has only been

signed off on the first two pages. Unless a design is vetted by a third party, it doesn’t make

any sense.

Engagement of Project Management Consultant:

4.16 Short tender (2-bid system) for the above mentioned work was called vide NIT No.

D/EE(Pr)Central-I/2008-09/16 dated 19-08-08. The last date for receipt of proposal was

04.09.08. No tender was received. Telephonic enquiries were made with firms and

modifications, as requested by them, were incorporated and a corrigendum was prepared

with such amendments. Subsequently, one bid was received on 15th September, 2008 from

CES, and the contract was awarded to them.

4.17 Though there was adequate publicity for the tender notice, the short tender bid

ultimately proved redundant as by the time the corrigendum was issued and bid received,

the 15 day period had elapsed. Further, there is no documentation or evidence to support

the telephonic enquiries with the consultants, nor is such a list available.

4.18 The price quoted by CES was 4.19 crore. The justification rate worked out by the

Department as per CPWD manual @5% was 16.12 crore. After negotiations, the work was

awarded at 4.15 crore.

4.19 The Department did not check with empanelled consultants of the MCD or PWD

their willingness before awarding the work.

Savings in the Project 4.20 There was time overrun of three months but the work was completed with an

expected savings of 6.58 crore compared to the contracted amount and 27.63 crore

compared to the approved AA&FS. This only indicates that AA&ES was got approved

without proper estimate being prepared.

4.21 The project was prepared and executed for providing parking place for the Buses

bringing the athletes and officials during CWG 2010 to JLN Stadium. This was meant for 10


53

days and it was claimed that the place would provide much needed parking place for cars /

buses after the Games were over. But there is no projection of any revenue from the

parking charges. Thus, a project costing 325 crore, executed for 297.37 crore, has been

constructed with no use / revenue collection plan in future.

4.22 Due date for completion of the project was 11th May, 2010. However, the project

was actually completed on 31st August, 2010. There was a delay of over 3 months in

completion of the project. The reasons for the same cited in the reply to the CTE’s question

regarding time overruns are:

“Removal of huge quantity of encroachment in the shape of jhuggis (1000 approx),

including 3 religious structures was carried out in the month of January 2009”

“As per the requirement of the work, 2012 trees (905 from Kushak Nallah and 1105

from Sunehari Nallah) were to be removed / transplanted. The tree cutting

permission for both the site was granted by the Competent Authority on 24th

February, 2009 and 2nd March, 2009 respectively, thus causing an initial delay of

approximately 8 weeks.”

If this work had been undertaken as soon as the site was selected and when the tendering

process was in progress, a time saving of at least 8 weeks could have been effected.

4.23 Discussion regarding this project was taken up by Empowered committee very late,

i.e. only in September 2008. Though there were other high level committees to oversee the

progress of CWG 2010, this topic was never discussed at these levels till this point.

(Annexure 4C)

Box 1: Major Findings

HLC observed that

i. there was inordinate delay in zeroing in on this project as a ‘solution’ to problem of parking of buses during the Games period.

ii. Delay in commencement of work cost Government 42.89 crore. iii. Project completed with savings of about 6.58 crore against

contracted amount. iv. Legacy use was unclear during project execution and even after

project completion.


54

Chapter 5: Upgradation of Streetlights Introduction

5.1 “Lighting has always been an effective tool to promote a city. It is not only a

functional requirement, which provides safety and security to motorists and residents; it

helps in creating an identity and image.” The project for upgradation of streetlights in Delhi

was part of an ambitious multipronged exercise to project Delhi as a world class city in

preparation for CWG 2010.

Need for upgradation of Streetlights

5.2 GNCTD officials have offered the following justification for undertaking a project for

upgradation of Streetlights in Delhi:

i. Improve the city image ii. Provide safety and security to motorists & residents

iii. Provide conducive environment for economic & tourism related activities

iv. Conservation of energy & quick maintenance of euipments

5.3 With a view to attain the objectives mentioned above and give an image makeover

for Delhi by night, GNCTD embarked on a project called “Modernization of Delhi

Streetlighting System – An Integrated Approach” in 2006. Delhi Government decided to

improve the lighting from the level of around 10-20 lux to 35-40 lux level in conformity with

‘international standards’.

Standards for Integrated Street Lighting by Committee (SISLC) 5.4 A nine member committee was constituted in June 2006 by the Power Department

with Shri S.R.Sethi, Director (Operations) DTL as chairman and General Manager, Central

Lighting Design, Philips as Convenor to standardize the specifications of street lighting in

Delhi10

10 See the Report of the SISLC at Relevant Document 5A

. It had representatives of DTL, BSES, NDPL, PWD, NDMC and MCD. It may be noted

that BSES and NDPL were Discoms entrusted with power distribution in the city while PWD,

NDMC and MCD were owners of streetlights. In 2006, MCD owned about 198,000

streetlights in the city while 20,000 were owned by PWD.


55

5.5 The specifications for streetlighting were finalized after due deliberation with various

Departments and inputs received from Lighting Society of India. Standards were released

finally on 24th December, 2006 by Mr. S R Sethi, Director (Operations) DTL after approval of

Delhi Government. In the Foreword to the Report, the then Principal Secretary, Power

hoped that the standards would be followed by all the Departments concerned11

5.6 The lighting standards recommended by the Sethi Committee were designed to

meet the following objectives:

.

i. To adopt the latest technology in streetlighting based on international standards adapted to Delhi’s conditions;

ii. Use of energy efficient electrical equipments to save consumption of electricity; iii. Use of automatic switching On & Off and monitoring of streetlights so that each

segment of the streetlight could be monitored effectively, thus saving the energy consumption and enabling quick maintenance of the equipments;

iv. Improving urban landscape of Delhi to make driving and walking a pleasant experience;

v. Prepare for Commonwealth Games, 2010.

5.7 Some of the main points covered by the Report related to common technical

specifications, pre-qualification criteria, lighting specifications and technical specifications of

products and standardization of lighting equipment, poles, cables, fillers, feeder pillars etc.

Brief highlights of the recommendations of the SISLC are given in Table 1 below.

Table 1: Recommendations of SISLC #

Recommendation / Suggestion Implemented by PWD NDMC MCD

1 On eligibility criteria:

1a. Main contractor should be the installation contractor

Condition added - Lead bidder should be a luminary manufacturer

Followed the PWD pattern

Condition added - One of the bidders should be a luminary manufacturer

1b. Manufacturers should meet the following major eligibility criteria

Specified the names of the manufacturer



Luminaire conforming to IEC 60598 Attached the standard as part of NIT. Luminous efficacy of atleast 110-130

lumens/Watts

11 Refer to Report placed at Relevant Document 5A


56

Fast reignition time (less than 180 seconds)

Housing made of High Pressure Die Cast Aluminum

High Lumen maintenance of 95% Life at 50% mortality > 3000 burning

hours Should have ISO 9001 & Preferably

14001 certification Excluded in NIT Excluded in NIT Excluded in NIT

1c. Contractor should have annual turnover of Rs. 20 Crores

Followed Followed Followed

1d As per CVC guidelines Mentioned in NIT

Mentioned in NIT

Mentioned in NIT

2 On contractor's responsibility

2a Main contractor shall be procuring from manufacturers

Only specified manufacturers bid for the projects

2b Execute jobs in lot of 100 kilometers road length or above


2c Main contractor shall be responsible for providing maintanance of 5 years

Additional 5 years maintenance after 2 years warranty



3 On bidding process

3a Two part tendering process - Technical and then Commercial

Three part tendering

Three part tendering between 4 shortlisted parties

Three part tendering

3b After approval of technical bid price bids shall be opened

Price bids were opened one by one

Price bid opened without finalisng the technical score

3c Unit rates of all items should be clearly specified in the price bid

Percentage rate tender

Mentioned in the bid

Mentioned in the bid

4 On Lux levels at different road categories

4a A1 - Dual/Single when the width of single carriage way more than 10 mtr - 35 lux

Lux level not mentioned

Mentioned to achieve 35-40 lux

Lux level not mentioned

4b A2 - Single carriage way with width between 7 and 10 mtr - 25 lux

-do- -do- -do-

4c A3 - Single carriage way with width upto 7 mtr - 20 lux

-do- -do- -do-

5 On Poles heights


57

5a A1 Category roads - 12 Mtr Replaced the existing poles with same height without specifically following this recommendation

As per the design proposed by the Manufacturer, not as per this recommendation

Replaced the existing poles with same height without specifically following this recommendation 5b A2 Category roads - 11 Mtr

5c A3 Category roads - 8 Mtr 6 Others

6a All the street lights should be SCADA

compatible to remotely control the screen lights from a central location


Project Implementation

5.8 Even before the Report of SISLC was formally released on 1st October, 2006, it had

been decided in a meeting chaired by the Chief Minister of Delhi on 27th September, 2006 to

commence work on modernization programme by 1st November, 2006 and complete the

same by 31st October, 2008.

How stage was set for restricted tender 5.9 In the Note dated 17th October, 2006,12

12 See Relevant Document 5B

Engineer in Chief of PWD mentioned that

out of 378 km road length with PWD, a length of 95 km was with the Transport Department

for development of HCBS corridor and modernization of street lighting in that stretch would

be undertaken as part of that project while metro reated works were underway on a 24 km

stretch. It was mentioned that the estimate was being prepared taking into account the

streetlighting to be done as per international standards. Provisions in the estimate

comprised of GI polygonal poles with luminaries produced by international players like

Philips, Schredder, Mitsubishi etc. these lighting poles were to be of varying heights

depending on the width of the carriageway with additional lighting to be provided along slip

roads, service roads etc. It was suggested by the E-in-C that in order to obtain the requisite

level of lighting to international standards that “we might have to resort to restricted call of

tendering from reputed international players in this field.”


58

5.10 E-in-C, PWD through his letter dated 30th May, 200713

i. The power requirement of streetlighting being provided by NHAI through M/s. Space

Age was 31.2 KW per km even though it was of a lower lux level while the SISLC had

specified power consumption of only 22.3 KW per km for a higher lux level.

addressed to Principal

Secretary, PWD referred to the following points which later played a key role in the manner

in which the project was implemented in Delhi:

ii. Hence, for nearly 320 km of lighting on PWD roads an extra wattage of power

assuming 10 hours of burning in the night will amount to 320x8x10 per day which at

current price levels will amount to Rs.1,24,672 per day or Rs.4.55 crore per year.

iii. For providing energy efficient streetlighting system, there were only 4 competitors in

the world, namely, M/s Schreder (Belgium), M/s Trilux (Germany), M/s General

Electric (USA) and M/s Philips (Holland) who have in situ R&D facilities to provide

world class exterior lighting.

iv. In a large measure streetlighting projects in China, Malaysia, Singapore, Korea etc.

have been executed only by these firms.

v. Since Delhi is to be developed as a “world class city” it was no use looking at ‘second

rate’ agencies to provide streetlighting of this magnitude.

vi. “While we may be cutting cost initially but we may land up incurring higher levels of

energy consumption as well as annual outgo in the form of electricity charges at a

later date.”

5.11 Thus, by May 2007, Engineer in Chief has introduced into the Upgradation of

Streetlighting project in Delhi the following ideas which were accepted ‘lock, stock and

barrel’ by senior functionaries of GNCTD including the Chief Minister.

• Only 4 foreign firms can provide energy efficient streetlighting system;

• Indian firms are ‘second rate’ agencies and no time should be wasted over them;

• There would be savings in energy bill for GNCTD if imported luminaries are used.

5.12 Each one of the aforesaid assumptions was fallacious and, in the end, analysis will

show that sizeable public money has been wasted and certain contractors have been

13 See Relevant Document 5 C


59

‘unduly benefited’. Before proceeding with the analysis, a snap shot of the project is given

below.

5.13 The road length taken up for upgradation of streetlights by PWD, NDMC and MCD is

indicated in Table 2:

Table 2

Name of Agency / Division

Category A

(8 lane roads)

Category B

(6 lane roads)

Category C

(4 lane roads)

Service Road

Total (in km)

PWD – M1 57.70 61.47 5.84 42.50 167.51

PWD – M2 42.55 26.97 26.98 28.15 124.65

PWD – M3 25.70 57.23 13.04 56.30 152.27

NDMC 104.40 - - - 104.40

MCD 258.56

5.14 The following charts show the distribution of work between the agencies and

bifurcation of civil work, pole and luminary (imported & indigenous) compared with the

total cost of the project. These are the final executed amount including the additional work:


60

5.15 The chronological implementation of the Project has been graphically shown below.

Analysis of Project Execution Preparation of Estimates

5.16 Initially, PWD had prepared an estimate of 124.51 crore in November 2006 which

was discussed in the 12th meeting of EFC held on 22.12.2006 but was deferred till the

detailed estimates submitted by E in C, PWD were examined and studied by the Finance

Minister in consultation with Planning / Finance Department. This proposal was withdrawn


61

in the light of the directions issued by the Hon’ble Chief Minister in the meeting held on 26th

April, 200714

5.17 In the said meeting of 26th April, 2007, the following decisions were taken:

.

i. Only roads upto 6 lanes may be taken up for upgradation at present;

ii. Upgradation of streetlighting on 8 lane roads i.e.Ring Road and National Highway

will be taken up later after specifications have been finalized;

5.18 Accordingly, an estimate for 106.62 crore was prepared which covered only roads

up to 6 lanes and did not include the following:

a) 8 lane road on Ring Road

b) 31.5 km under NHAI

c) On flyovers to be constructed & on the adjoining service/slip road

d) 87.12 km of roads meant for HCBS corridor

e) Roads where DMRC work was in progress.

These rates were 16 to 18% higher than the estimate prepared in November 2006. The

proposal was approved in the 2nd Meeting of EFC for the year 2007-08 held on 31.5.2007.

Financial sanction was inadvertently issued without approval of the Cabinet but the same

was quickly withdrawn on 14.6.2007. The average per km cost in this proposal was

estimated at 33 lakh. It appears that later this sanction order was not issued at all!

5.19 In the meantime, to decide upon the type of fittings & fixtures for 8 lane roads, the

matter was referred to NHAI and Spaceage on the instructions of Hon’ble CM. After getting

replies, the Committee in a meeting held on 18th May, 2007 decided that since the work was

of such a large magnitude, the EOI would be called from ”world leading firms” and tenders

would be issued after pre-qualification of the agencies. It was decided that this process

should be completed by 31st July, 2007 and tender documents may be issued by 7th August,

2007. In the meantime, PWD had prepared a separate estimate for 15.09 crore for 8 lane

roads and national highways. The average per km cost in this estimate was 36.4 lakh

14 See Relevant Document 5 D


62

5.20 The notice for pre-qualification of firms was issued on 3rd July, 2007. The last date for

receipt of applications was 25th July, 2007. The following five firms responded to the EOI:

a) M/s Bajaj Electricals Ltd

b) M/s Keselec Schreder Pvt. Ltd.

c) M/s Utkal Galvanizer Ltd. (M/s Utkal was rejected by E-In-C (Elect.) on grounds of

changing lead partner. Against this a representation was made to Hon’ble CM.

Outcome of the representation is not there in the file but the applicant was not

considered)

d) M/s Philips Electronics Pvt. Ltd.

e) M/s Spaceage Switchgear Ltd. (it was noticed that to decide upon the type of fixtures

and fittings for 8 lane roads matter was referred to NHAI and Spaceage which was

also a bidder in the tender process)

5.21 Board of Assessors was constituted on 10th August, 2007 to evaluate the application

received from various applicants in response to EOI for upgradation of streetlight on Delhi

PWD roads. It has E in C, PWD as its Chairman, Chief Engineers from PWD, CPWD, MCD,

DDA, NDMC as members. Director (DTL) and Officers from PWD, Power and Finance

Departments of GNCTD were also its members.

Box 1: Criteria prescribed by CVC on 17.12.2002

The criteria for pre-qualifying the companies for civil and electrical works are as under: a) The average annual financial turnover during the last 3 years, ending 31st March of the previous financial year should be at least 30% of the estimated cost. b) Experience of having successfully completed similar works during last 7 years ending last day of month previous to the one in which application are invited should be either of the following:- (i) Three similar completed works costing not less than the amount equal to 40% of the estimated cost

Or (ii) Two similar completed works costing not less than the amount equal to 50% of the estimated cost

or (iii) One similar completed work costing not less than the amount equal to 80% of the estimated cost

c) Definition of similar work should be clearly defined.


63

5.22 At this stage, Government of Delhi took a policy decision to split the work of

upgradation of streetlighting by PWD in Delhi into 3 packages with a view to ensuring

“larger participation for timely completion with quality” and also because it may not be

possible to get a single multinational company to satisfy the criteria laid down by CVC for

undertaking the entire project over 355 km. It was also decided to increase the period of

operation & maintenance from 5 years to 7 years on the grounds that the multinational

companies would need that period to make their activity economically viable after

executing the same. It was also decided to provide advertisement rights to the firms

executing the streetlighting project. This proposal of Principal Secretary, PWD was agreed to

by the CM on 8th August, 200715

Sample Stretches

. It appears that a decision to award the work to major

MNCs had already been taken and tender conditions were being systematically ‘tweaked’

and totally extraneous exercise like having companies display their wares over sample

stretches undertaken with a view to achieve a pre-detrmined objective.

5.23 Delhi Government decided on 16th July, 2007 that street lighting shall initially be

provided on three sample stretches by calling spot quotations both for indigenous and

imported fittings viz. (i)By division M-35: ISBT Kashmere Gate - 4km (ii)By division M-15:

Dhaula Kuan to AIIMS - 5 km (iii)By division M-25: ITO Junction to Chungi to NH24 - 7km.

Spot Quotations were invited from only 3 firms as per the approval of Hon'ble Chief

Minister to award work without call of tenders namely - Philips, Bajaj and K Schreder16

5.24 Hon'ble CM saw samples of various luminaries at her residence on 21st September,

2007 and desired that these fittings should be installed on the road so as to give a better

idea of how these will look after installation. Accordingly, both imported & Indian fittings

were installed on the Ring Road from ITO to Rajghat. These were inspected by the CM, her

Cabinet colleagues and senior officers in the night of 1st October and during daytime on 2nd

October, 2007 and also by various other officers. All of them appreciated the installed

fittings at site. Further, fittings of some of the leading manufacturers were shown to CM on

6th October, 2007 at her residence. It was suggested by the Hon’ble CM to categorize Delhi

PWD roads into 3 parts-

.

15 See Relevant Document 5 E 16 See Relevant Document 5 F


64

• 'A' grade roads- shall have imported fittings - 282 km

• 'B' grade roads- shall have 50% imported and 50% indigenous fittings-85 km

• 'C' grade roads- shall have indigenous fittings - 57km.

This decision17 was later confirmed by the Cabinet in its meeting held on 7th December,

2007 and the Cabinet decision was conveyed to the Department vide letter dated

10.12.200718

Approval of Project

.

PWD

5.25 The total estimated cost of the project to be executed by PWD was 198 crore for

covering about 443.87 km road length. The average per km cost was 44.4 lakh. Finance

department issued A/A&E/S on 19th December, 2007 after Cabinet approval of the Project

on 7th December, 2007. The estimate was based upon DSR 2002 and market rates.

Streetlighting Norms for All 5.26 In a meeting held on 16th October, 2007 Chief Secretary of GNCTD reviewed the

developments in the Project and directed MCD and NDMC to adopt the standard norms and

practices recommended by SISLC. All agencies were urged to adopt a uniform procedure for

taking up and implementation of streetlighting works in Delhi.

NDMC

5.27 In case of NDMC, it was decided that above work will be carried out in four phases.

Under first and second phase, 67 (revised to 81) important roads have been covered at an

estimated cost of 53 crore. The estimate was accorded A/A & E/S on 19th December, 2007

by Council.

MCD

5.28 MCD framed a preliminary estimate for undertaling upgradation of streetlights on

959.85 km of road length at an estimated cost of 225.24 crore. The project was to be

completed in a phased manner. Work for first and second phase (out of 4 phases) was to be

17 See U.O.No.E-in-C/W/SL(P)/07/4137 Dated 22.10.2007 at Relevant Document 5 G 18 See Cabinet Decision at Relevant Document 5 H


65

completed before the Games which covered important roads. Altogether, 101.56 km of road

length was covered in phase 1 and 157 km in phase 2 at an estimated cost of 106.88 crore.

5.29 The Overview of entire project including the financial details are given in Annexure-

5 A.

Summary of Findings

5.30 Based on the review of files and documents available for up-gradation of street

lighting in Delhi by PWD (Govt. of Delhi), MCD and NDMC, the following conclusions have

been drawn:

a) Several important recommendations of SISLC were ignored.

b) Competition was restricted. Only four parties were awarded the contracts pre

decided by the agencies.

b) Luminaries were imported at additional cost without any additional benefits,

although domestic Luminaries of similar specifications were available at lower cost.

c) Active involvement of Chief Minister observed in the entire decision making

process.

d) Though a Committee was formed to define the standards for street lights in Delhi

as per the international standards, the Committee’s recommendation was not

followed in the tendering process, resulting in cartelization and additional

expenditure.

e) To limit competition, condition added that only luminary manufacturer should be

the lead member of the consortium, but while executing the contract these

contractors imported other make luminaries, thus defeating the ostensible objective

of the tender.

f) Justified costs were prepared based on the L1 rate, not the market rate, resulting

in undue benefits to the contractors and ridiculous justified rate.

g) Same item with similar specifications was quoted at different rates by the same

vendor for two different projects.


66

Loss to Government

5.31 Estimated total loss on account of

• Imported Luminary - 28 crore

• Design based tender (no level playing field) – 5.0 crore

• Improper negotiation – 13.02 crore

Major Observations

S.No Observation

1 Higher cost incurred on account of decision for use of Imported make luminary

1.1 Luminary of imported make were used as per the decision of CM though Indian manufacturer of luminaries also met the technical specifications as laid down by Committee and in NIT

1.2 Multiple revisions of Project Estimates in case of Delhi Government PWD, which delayed the work by almost 1 year, resulted in higher expenditure which can be seen from increased average per km cost.

1.3 In NDMC area only imported luminary have been used without following any categorisation of roads as suggested by the Committee resulting in higher expenditure.

1.4 Difference in rates of imported luminary and indigenous luminary was very high

2 For Integrated Street Lighting for Delhi roads

2.1 Common standards and guidelines issued by the Committee were required to be followed by all the Agencies for carrying out above work. Still the Agencies followed different NIT and evaluation criteria for pre-qualification of contractors.

2.2 NIT conditions restricted widespread participation


67

2.3 GM Philips, a potential bidder, was convenor of the Committee set up for finalization of Common Specifications for Street Lighting work

2.4 No report on achievement of desired lux level.

3 Anomalies in NIT and Tender Document

3.1 No Agency incorporated the condition of ISO certification in NIT which was required as per standards issued by the Committee.

3.2 Only leading luminary manufacturers of international repute were allowed to bid

3.3 Conditions restricting widespread participation in NDMC NIT.

3.4 In case of NDMC, the design based item rate tenders were invited.

3.5 Violation of NIT condition by MCD by not dividing the work equally amongst the interested parties for Phase 2 as per NIT

3.6 Potential cartelization amongst bidders

3.7 MCD went ahead with award of work with tenders of only 2 firms in Phase 1 although technical sub-committee had pre-qualified 4 firms and re-doing pre qualification of parties for Phase 2.

4 Issues related to preparation of estimates and justification statements

4.1 Inclusion of 1% of estimated cost for foreign visit for inspection of imported items before dispatch in Contingency expenditure provision was not reasonable.

4.2 Justification statement jacked up by 24% in case of NDMC.

5 Observations on tender opening and processing

5.1 As per terms and conditions of NIT of PWD, the first lowest bid in package 1 was not opened for package 2. Similarly, tenders of lowest bidders for first and second package were not opened for the package 3.

5.2 Rates could have been negotiated as work of same magnitude was awarded at different rates in 3 packages. Also possible concealed loss as all the tenders received were not opened.

5.3 Precious time of around 8 months was lost in between the rejection and final acceptance of the tender on Hon’ble High Court’s order of M/s Spaceage Switchgear

5.4 As per CPWD manual, unless earnest money is deposited by the bidders their tenders should not be opened however NIT stated that since each party will not get more than one work they are required to make EMD only once.

5.5 M/s Bajaj Electricals do not fulfill the pre qualification criteria w.r.t performance of similar work if the experience of consortium members is not totaled up but still the work was awarded.

5.6 The NDMC tender was a design based item rate tender therefore the bidders specified different number, height of poles etc. There is an impact of Rs 5 crore in case the design of M/s Philips India (L-1) is adopted and the tendered amount of rejected bidders is reworked.

5.7 Huge variation in rates quoted for work done in two phases. Also same vendors have quoted lower rates in NDMC for items of similar technical specifications.


68

5.8 Large number of cutting and overwriting found in financial bids submitted by M/s Sweka (L-1) in both the phases

6 Market Intelligence

6.1 Higher rate taken for preparing Justification statement as compared to the rates obtained independently from the market.

7 Other Observations

7.1 PWD officers do not put name and dates along with signatures

7.2 Last running payment bill of NDMC did not show the cumulative quantities of individual items billed till date as required.

Higher expenditure on account of decision to use imported make luminary 5.32 The Committee set up for standardization of specifications for above mentioned

work did not specify whether to use imported make or indigenous make luminary. It only

gave the technical specifications and lux level required to be achieved. The proposal to

involve four MNCs viz. Philips (Holland), Schreder (Belgium), Trilux (Germany) was first

mooted by the Engineer in Chief of PWD in May 2007 and decision taken in August 2007

also serves to indicate that GNCTD was keen to have only foreign suppliers for the Project.

5.33 As mentioned earlier, the decision to use imported luminary on ‘A’ category roads

was taken in the meeting taken by the Hon’ble Chief Minister at her residence on 6th

October, 2007 where Principal Secretary, PWD and other senior officers of Delhi

Government were also present. There it was suggested to categorize Delhi PWD roads into 3

categories and 'A' grade roads to have imported fittings.

5.34 It has been stated by the State Government that in the presentation made to the CM

on 6.10.2007, the imported luminaries were proposed to be used on main arterial roads of

PWD (‘A’ category) which are 6 to 8 lane wide roads and needed better and more efficient

luminaries for achieving uniform lux level on the entire width right upto the extreme lane.19

19 See Note forwarded by Chief Secretary, GNCTD dated 24th February, 2011 at Relevant Document 5 I

It has been asserted that these roads measuring 280 km out of 410 km of PWD roads are the


69

“most visible” and also “carry more than 75% of the entire traffic load” of Delhi. Hence, both

“aesthetics” and “efficiency” (better distribution of illumination, less frequent breakdown

etc.) are important.

5.35 It has also been asserted that the cost of imported luminaries in the total cost of

streetlight work is only 17%. They reportedly have IP-66 protection for optimum

performance over lifetime which was not then available for indigenous luminaries. Further,

in case of imported luminaries, 20% of the cost is on account of custom duty which

ultimately goes to Government. It has also been stated that the imported luminaries have

certain distinct advantages vis a vis Indian luminaries:

a) Better efficiency (light output ratio) b) Better aesthetic look c) Ease in maintenance and less breakdown d) Less discomfort glair due to better quality reflector e) Better workmanship f) Better designing features g) Lower life cycle costs

5.36 GNCTD officials have also asserted that during execution of work, the lux level had

been measured by the site staff on 11th July, 2010 with imported fittings on 14.8 m wide

Azadpur to main Panjabi Bagh road which shows the lux level at the farthest point as 28 lux

whereas with Indian fittings the lux level measured on a 12.9 m wide road (Road No.68) on

21.12.2009 shows the lux level at farthest point as 22 to 24 lux. The average lux level on the

same stretch has been shown as 44.8 lux.20

5.37 In certain NDMC areas, the average lux level has been measured as high as 50 lux.

This clearly shows that excess luminaries have been used in some stretches ostensibly with

a view to inflating the project cost.

Imported vs Indigenous 5.38 The stand of Government of Delhi is contradictory. First, the Sethi Committee did not

recommend use of imported luminaire. It merely laid down the technical specifications.

Further, there is nothing on record to suggest that indigenous luminaire did not meet the

technical specifications. The basis for declaring Indian manufacturers as “second rate

20 See Relevant Document 5 I


70

agencies” by the Engineer –in-Chief, PWD in his letter dated 30th May, 2007 is not clear from

documents purused by HLC. Government spent 50.18 crore on imported luminaries which

was almost 50% of the total expenditure on luminaries. It has been shown in the following

paragraphs how this was excessive as Government ended up paying extra money for the

items having same technical specifications simply because they were imported.

Table 3: Expenditure on Luminaries ( in crore)

Particulars NDMC MCD PWD Total

Imported luminary 10.34 10.09 29.76 50.18 Domestic luminary 21.84 29.33 51.18 Total expenditure on luminary

10.34 31.93 59.10 101.36

Total Streetlight Project

34.40 106.12 156.62 297.14

5.39 Ignoring indigenous make luminary, which otherwise fulfilled the technical

specifications resulted in additional expenditure of approximately 28 crore. Moreover,

what was required is proper illumination as per the standards set in terms of required lux

level. Further same warranty was available in case of both imported and indigenous make

luminary. In terms of beautification of city as well, it is the pole that makes any difference

and not the look of the luminary. The detailed calculations are given in Annexure 5B.

5.40 The agencies had to spend approximately 28 crores extra on account of use of

imported luminaries instead of indigenous make, but the cost of imported luminaries was

never examined and the justification was prepared to accommodate the quotations. Based

on examination of the import documents pertaining to these luminaries, it was observed

that the actual imported cost, including the duties and taxes, was much lower than the

contracted rate. The detailed calculation is given in Annexure 5 C. It is clear from the same

that contractors made an ‘undue gain’ of 17.5 crore, out of a total billed amount of 43.5

crore on account of the huge difference between the contract amount and the landed cost

of imported luminaries.

5.41 It was observed that in the records of M/s Keslec Schredder made available to HLC by

the PWD, the cost of imports and the duties/taxes paid on that had been blacked out! After


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obtaining the information from Customs Department, a comparison was made between the

actual cost of import including duties/taxes and the contracted amount per unit. The details

in brief are as under:

Table 4: Comarison of Import Price with Contracted Price

Agency /Division

Supplier 400 W HPSV 250 W HPSV Contracted Price (in )

Actual Import Price ( in )

Contracted Price (in )

Actual Import Price (in )

PWD /Div. M

1

Bajaj (Trilux, Germany)

27,000 21,534 - -

PWD /Div. M

2

Schreder, Hungary

27,000 12,312 - -

PWD /Div. M 3

Spaceage (Al Babtain, UAE)

27,000 6,363 - -

NDMC Philips, France 25,071

18,006 24,445 17,754

MCD Phase 1 Schreder, Hungary

32,000 12,312 31,000 7,615

MCD Phase 2 Philips, Holland

27,000 16,870 25,500 15,906

It is evident from the Table given above that different suppliers overcharged PWD, NDMC

and MCD which ranged between 25 to 324%.

5.42 It has been stated in the Note submitted by the State Government that “in case of

imported luminaries, 20% of the cost is on account of custom duty which ultimately goes to

Government.” This argument is specious because the rates given in the Table above are

inclusive of all taxes and duties. The total cost of imported luminaries was 25.95 crore. At

20% custom duty, Govt. revenue would be about 5.20 crore, while the contractor has

made an ‘undue benefit’ of about 17.56 crore. A margin of 68% !


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Revision in estimates and AA&ES

PWD

5.43 Multiple revisions in estimated costs in case of PWD delayed the work by almost 1

year and resulted in higher expenditure which can be seen from increased average per km

cost.

Table 5:

Coverage Date Estimate Amount (in crore)

Road Length (kms)

Per km cost

( in lakh)

Reasons for revision as stated by the agency

Delhi PWD 27-Nov-06 124.5 530.00 23.5 This estimate rejected.

6 lanes, slip/service roads/ existing flyovers

12-Jun-07 106.6 323.06 33.0 Committee issued revised Common Standards.

Deferred for rest of the roads as per CM directive.

8 lane & National Highways

Put up on 2-Aug-07

15.09 41.45 36.4 CM decided to refer to NHAI and Spaceage.

Delhi PWD 19-Dec-07 197.28 443.87 44.44 Roads classified and Imported luminary to be used on ‘A’ grade roads.

-Coloured Poles

-Increase in road length

NDMC 5.44 In case of NDMC only imported luminary of 400 W and 250 W have been used. In

other words NDMC did not categorise the roads into grades as suggested in ‘Standards

issued for Integrated Street Lighting Work for Delhi’ issued by Delhi Government which was

to be adopted by all the Agencies. This has ostensibly been done because the area covered

fell in ‘VIP’area.

MCD 5.45 It is observed in case of MCD that the difference in rates of imported lamps and

indigenous lamps was very high although the technical specification for both the types was

similar as shown in Table 6 below-


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Table 6: Price comparison of Imported & Indigenous Luminaire

Item Phase Price of Imported

(in )

Price of Indian

(in )

Difference in Price

(in )

% Difference

400 W Lamp Phase 1 32,000 9,200 22,800 248%

250 W Lamp Phase 1 31,000 8,200 22,800 278%

400 W Lamp Phase 2 27,000 9,000 18,000 200%

250 W Lamp Phase 2 25,500 8,000 17,500 219%

It was not prudent to go in for imported luminaries at such exorbitant prices when the

luminaries of same technical specification manufactured in India by same vendor were

available at much lower prices.

Standards for Integrated Street Lighting for Delhi roads 5.46 Street lighting was a common work for Delhi as a whole though its execution was

carried out by different agencies like PWD, MCD and NDMC etc. To streamline the work

amongst different executing agencies Common Standards were issued by Delhi Government

which got finalized after due deliberations with all agencies. Even then the proposed

executing agencies carried out short listing/ pre-qualification for award of work differently

and followed different methods for evaluation of the bids as well.

5.47 The Common Standards issued by the Committee also specified the Eligibility/ Pre

Qualification criteria for inviting tenders. Still, 3 agencies issued different NIT specifying

varied qualification criteria which restricted competition. For instance, in case of PWD,

tenders were invited only from ‘Luminary Manufacturers’ of international repute. However,

the Standards issued nowhere laid down such conditions. Instead it had laid down eligibility

criteria for ‘Installation Contractor’.

Conflict of Interest 5.48 General Manager, Philips was Convenor for the Committee set up by Delhi

Government for finalization of ‘Standards for Integrated Street Lighting. A conflict of

interest is observed as M/s Philips was a potential bidder and a party in the tender process.


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Similarly it was noticed that to decide upon the type of fixtures and fittings for 8 lane roads

matter was referred to NHAI and Spaceage, which was also a bidder in the tender process

5.49 The entire plan and expenditure amounting to 286.88 crore (as per the bill

received) was aimed to make Delhi’s street lighting at par with international standards on

lux level criteria. Although all the three agencies, viz. PWD, NDMC and MCD had provided

for third party inspection to ensure overall quality assurance of Street Lighting projects

executed by them, none of the ‘third parties’ so identified have submitted their report till

date.

A few photographs of Street Lighting:


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Anomalies in NIT and Tender Document 5.50 As per the Standards issued by the Committee, one of the condition regarding

‘Technical specification of products and standardization of lighting equipment’ was that ‘all

equipment suppliers and erectors should have ISO 9001 & preferably ISO 14001

certification’. However, this condition was not included in the NIT document by any of the

agencies.

PWD 5.51 In case of PWD, only the luminaries manufacturers (leading partner) of international

repute were made eligible to apply for pre-qualification of the work of 186 crore who,

otherwise, were simultaneously required to be contractor for a work of similar nature

worth 10 crore. This condition of NIT restricted competition as otherwise the work could

have been assigned to electrical contractors of prescribed stature having desired financial

status and experience in execution of work of such magnitude. This could have resulted in

larger competition, as there are very few internationally reputed luminary manufacturers

available. PWD had restricted the tenders to only four agencies for three works whereas

tendering is a process for ascertaining fair market rate for a job. Undue restrictions imposed

by PWD vitiated the tender process as it restricted fair competition.

MCD 5.52 In case of MCD, three firms which were pre-qualified include M/s Sweka Power Tech

Engineers Pvt. Ltd. which had a tie up with M/s Philips Electronics Pvt Ltd and M/s K

Schreder. The criteria was that either the leading partner shall be a manufacturer of

luminaries or the other partners shall have experience in similar work and must have tie up

with manufacturer of luminaries. The firm selected is not a manufacturer of the luminaries

and yet has successfully completed the work of up-gradation of street lighting on Delhi

Roads under jurisdiction of MCD.

5.53 As per ‘Invitation for bid’ document of MCD dated 12th November, 2008 for Phase 2,

‘if the rejected firms agree to execute on lowest quoted rates, the work will be equally

divided to all firms’. As observed M/s Spaceage agreed to this condition (Expression of

Interest letter was not available in the file. It was obtained independently). However, Sweka

which had executed Phase 1 project of MCD, had quoted the lowest rates and was awarded

the entire work violating the above mentioned condition of NIT. This defies the purpose of


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dividing the work into two phases and calling for tenders again for Phase 2, as the complete

work was ultimately awarded to M/s Sweka.

Idea of Manufacturer being the Lead Partner

5.54 HLC fails to understand the logic behind having a ‘luminary manufacturer’ as the lead

partner for undertaking this project. Since it was also decided to use imported luminary in a

significant stretch of the roads taken up, whether it was Bajaj or Philips (India), they were

just importers of luminaries and this task could well have been performed by any electrical

installation contractor! In order to make the manufacturers the lead partner, even the

financial parameters were reduced in the NIT.

5.55 MCD issued the EOI for Phase 1 on 5th November, 2007. Three bids were received

although seven parties had purchased tender documents. In order to get a better response,

the said EOI was cancelled and fresh EOI issued on 7th December, 2007. This time 5 bids

were received. Technical Committee, in its meeting held on 7th April, 2008, evaluated all 5

firms against duly approved pre qualification criteria and qualified 4 firms. However, only

two firms submitted their price bids. For Phase 2 again fresh EOI was invited and pre-

qualification done although a decision had been taken at the time of PQ for Phase 1 that the

same parties will be ‘qualified’ for issue of tenders for all the phases. Moreover, in pre-

qualification exercise for Phase 2, only three firms were qualified (Bajaj was rejected).

NDMC 5.56 NDMC also adopted ‘restricted tendering’ on the pattern of PWD and its Empowered

Committee approved the proposal for calling of tenders only from those four agencies

which had been short listed by PWD citing paucity of time. It was mentioned in the NIT that

since this is a ‘design based tender’, therefore in case of joint venture / consortium, the

principal or lead member shall be manufacturer of luminaries having tie up with pole

manufacturer and/or reputed electrical contractors.

5.57 In case of NDMC, design based item rate tenders were invited in 3-envelope system

viz. eligibility envelope, technical bid (design calculations) and price bid. Each bidder

submitted technical bid based on its own design and planning - quoting different number

and specifications of poles and luminary. As a result, the Technical Evaluation Committee of

NDMC couldn’t shortlist the parties on the basis of technical bid and decided to open the


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price bids of all parties. Comparative statement was prepared and the party with lowest

price bid in total was awarded the work inspite of the fact that a fair comparison of rates

was not possible. If the quantities quoted by the L-1 party i.e Philips are plotted against the

rates quoted by the rejected bidders, then M/s Spaceage quote becomes approx. 5 crore

lower than the tendered cost of Philips and, in such a scenario, M/s Spaceage would have

become the lowest bidder.

5.58 The action of the Technical Evaluation Committee to open the price bids of all parties

without technically qualifying them appears to be ‘improper’, if not ‘illegal’, and the entire

bid process can be challenged in a court of law.

Potential cartelization 5.59 Potential cartelization between the bidders – In case of PWD tenders were invited

from four pre-qualified bidders for 3 zones at the same time and as per terms of NIT each

bidder would get one contract each. Moreover, out of 4-5 common lead bidders which bid

for projects of all three agencies, viz. PWD, MCD and NDMC, 3 were awarded works by

PWD, except Philips who got work for MCD Phase 2 as a consortium member and for NDMC

as lead partner.

5.60 Thus, the total work of 285.88 Crore (Contracted amount) was offered to short-

listed bidders (the chart below shows how the pie had been shared between these four

parties) instead of allowing open competition for each package, which could have resulted

in better rates for all agencies. Based on the additional quantity supplied, the billed amount

as on date is about 304.5 Crores


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Preparation of Estimates & Justification statements PWD

5.61 The estimates prepared by agencies include provision @ 1% for foreign visit to

Australia/Europe to inspect the suitability and checking the quality before dispatch of the

imported items of the works. As per Cabinet note, E-In-C was asked not to load this on the

project cost and, in response, Chief Engineer stated that ‘project cost has not been loaded

with 1% cost towards foreign visits. In fact, 3% contingencies only have been taken as per

CPWD works manual’. This was factually incorrect as the same was specifically made a part

of the contingency expenditure. Firstly, such expenditure cannot be treated as a

contingency expenditure. Moreover, there was no need for any inspection to be conducted

as the Department has already included 1 year guarantee and 5 years of maintenance

period in NIT. There were certain conditions in NIT which would have enabled departmental

officers to visit the country of manufacture. These included, inter alia, ‘firm shall get

material inspected before dispatch from the factory’; ‘firm shall make suitable arrangement

for the department representatives’; ‘1 month advance information for inspection shall be

given before dispatch’ etc. However, no team of PWD went abroad.

5.62 Table 7 below shows abstract of cost for PWD, which includes provision for

expenditure to be incurred on foreign visit:

Table 7: Abstract of Cost

Description of Item Qty. Unit Rate (in ) Amount (in ) Cost as per Schedule of Work 443.87 Km 1,613,074,018 Street Light Automation & service connection

443.87 Km 100,000 44,387,000

Cost diff of Street lighting on flyover due to change in category from C to A

11.05 Km 1,505,715 16,638,151

Total (a) 1,674,099,169 5 years Maintenance 22732 Points 73 per

point per month

99,566,160

2% for 3rd party inspection on (a) above 33,481,983 Total (b) 1,807,147,312 1% labour cess on (b) above 18,071,473 Total (c ) 1,825,218,785 3% contingencies out of which 1% shall cover the expenses of foreign visit Australia/Europe on (c ) above

54,756,564

Less: credit for old poles & luminaries 8850 No.s 1400 12,390,000 Balance Total 1,867,585,349


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NDMC

5.63 From the justification statement of NDMC, it was noticed that the justified rates for

each 400 W lamp of imported make have been taken as 27,000 whereas, the rates of 250

W lamp of imported make have been taken as 31,000 per unit. The cost of a 250 W lamp

cannot be higher than the cost of a 400 W lamp. In the estimate prepared by the NDMC, the

cost of 400 W lamps had been taken as 27,000 and that of 250 W lamps as 25,000. If this

rate is adopted, the justified amount is decreased by 1.03 crore. Thus, overall justified

amount is reduced to 33.71 crore which is less than tendered amount of M/s Philips.

Manipulation of ‘Justified rates’ has ostensibly been done to favour M/s Philips.

Table 8: Manipulation in Justified Rates

Particulars Justified Rates (in ) Revised Justified Rates (in )

Units 1724 1724

Rate 31,000 25,000

Amount 53,444,000 43,100,000

Impact 10,344,000

% Impact 24%

Observations on tender opening and processing

PWD 5.64 All tenders were received on the same date and time. Tenders submitted for

package 1 were opened first and then at a gap of one hour each for package 2 and package

3. As per NIT, no pre qualified firm could be awarded more than one work. In other words,

the tender of the successful bidders of the first and second package was not to be opened

even if they had bid for the Third package. This was a strange condition which worked to

the disadvantage of PWD and only served the interest of the four bidders.

5.65 In case of PWD the entire work was divided into 3 packages. For every package a

tender was invited from all 4 pre-qualified parties i.e altogether, 12 bids were received. As

per the terms and conditions of NIT ‘the first lowest bid in package 1 will not be opened for


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second package. Similarly, tenders of lowest bidders for first and second package will not be

opened for the third package’.

• For zone M-1, tenders of following 4 bidders were opened and compared: M/s Bajaj

Electricals, M/s Keselec Schreder Pvt. Ltd., M/s Philips Electronics Pvt. Ltd and M/s

Spaceage Switchgear Ltd. Bajaj Electricals in consortium with Trilux was awarded

the contract for M-1 being L-1 at 51.19 crore which was 4.6% above estimated cost.

• For zone M-2, tenders of following 3 bidders were opened and compared: M/s

Keselec Schreder Pvt. Ltd., M/s Philips Electronics Pvt. Ltd and M/s Spaceage

Switchgear Ltd. Tender of Bajaj Electricals which was awarded the contract for zone

M-1 was not opened. M/s Keselec Schreder Pvt. Ltd in consortium with M/s Sterling

& Wilson was awarded the work of zone M-2 being lowest out of remaining 3

bidders at 47.51 crore which was 2.3% above estimated cost.

• For zone M-3 tenders of following 2 bidders were opened and compared: M/s

Philips Electronics Pvt. Ltd and M/s Spaceage Switchgear Ltd. Tenders of Bajaj

Electricals and K Schreder which were awarded the contracts for zone M-1 and M 2

were not opened. M/s Spaceage being lower between remaining two bidders was

awarded work for zone M-3 at 57.49 crore which was 5.14% above estimated cost.

Subterfuge to share the spoils

5.66 This condition of NIT was not financially prudent. Instead tenders of all 4 bidders

should have been opened for zone M-2 and M-3 as well. Then, if the same party which was

L-1 for package 1, became lowest for other packages too, then other bidders could have

been invited to carry out the work at the L-1 party rates. It is surprising that the bidders,

whose tenders were not opened, did not object. This indicates cartelization amongst them.

Everyone knew that each will get one package and so none lodged their protest. HLC

suspects that the entire bidding process was rigged.


81

5.67 It is also clear that PWD had sought ‘percentage rate tenders’ and quantum of work

in all the three packages was almost the same. One of the conditions in NIT was that any

party will not get more than one work and price bid for that party will not be opened for the

other packages. Due to this condition, there are differences in the cost and rates at which

approximately same quantum of work has been awarded. Refer Table 9 below for details-

Table 9

(% age rate tender)

Comparative Details M 1 M 2 M 3

NIT Sub-head A total 455,768,493 445,149,080 488,564,477

Quoted % above(+)/ below(-) NIT +4.6% -2.33% -4.80%

Quoted Amount Sub-head A 476,733,844 434,777,106 465,113,382

NIT Sub-head B total (maintenance part)

33,594,600 29,963,580 36,007,980

Quoted % above(+)/ below(-) NIT +4.66% +71.23% +140%

Quoted Amount Sub-head B 35,160,108 51,306,638 86,419,152

Net Quoted amount 511,893,952 486,083,744 551,532,534

Overall % above(+)/ below(-) NIT amount

+4.6% +2.3% +5.14%

The net impact is that PWD has ended up paying more.

5.68 Bid of M/s K Schreder @ 2.3% above the estimated cost was the lowest for M-2. The

rates quoted by M/s Bajaj Electricals were 4.6% above the estimated cost for M-1 which

were higher by 2.3% over the lowest rates received for M-2. Similarly, rates quoted by M/s

Spaceage was 5.14% above the estimated cost for M-3, which was 2.84% higher than the

lowest rates received for M-2. It was noticed that no serious negotiations were conducted

to get the rates reduced so as to bring them at par. This variation in rates highlights the loss

incurred due to unreasonable terms of NIT. Also it is not possible to comment on the

concealed loss as the tenders of Bajaj Electricals for M-2 and of Bajaj Electricals and K

Schreder for M-3 were never opened. If the lowest quoted percentage is taken for


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calculating tender amount for all three packages, there is an impact of 2.62 crore. Refer

Annexure 5D for details.

5.69 The tender submitted by M/s Spaceage Switchgear Ltd. being L-1 for PWD zone M-3

was rejected by Works Advisory Board (WAB) on 18-March-08 on the plea that the firm’s

prequalification was not approved by them. However, the same was approved by the Board

of Assessors (BOA). Also, once the NIT has been issued to the firm, it is not justified to reject

the tender on the issue where tender itself is put to question. The tender, whether issued by

EE or any relevant authority, is considered to be issued by the Department and the WAB

cannot dissociate itself from the Department. Precious time of around 8 months was lost

between the rejection and final acceptance of tender, with Hon’ble High Court order of 4th

July, 2008 coming in between. Works Advisory Board finally approved the tender on 8th

September, 2008.

5.70 It is a well accepted rule that unless Earnest Money is deposited by the bidders, their

tenders are not to be opened. PWD floated tenders for all three zones separately and

6,520,892 was to be deposited as earnest money as per all three tenders. Bidders should

have furnished three EMDs if they bid for all three packages. However, tender opening

register shows that EMD had been deposited only once by the 4 bidders. Their bids were

allowed to be opened because as per NIT ‘since each party will not get more than one work

they are required to make EMD only once and the agencies will be considered to have

fulfilled the obligations of furnishing the EMD to the packages to which they have submitted

their offers’. This also is irregular.

5.71 One of the requirements listed in EOI document of PWD was that the principal

partner must be a luminary manufacturer having executed at least one work of 10 crore of

exterior lighting / luminaries / poles in last 7 years. However, as per the pre-qualification

application submitted by M/s Bajaj Electricals (L-1 for Zone M-1), value of order executed

was only 8.2 crore. Bajaj have fulfilled this criteria along with M/s Trilux which is also a

luminary manufacturer stating that “both the companies have adequate experience of

39.55 crore”. Bajaj was qualified by competent authority and was awarded work for zone M-

1, which prima facie appears to be incorrect as per EOI conditions laid down. If the


83

experience of consortium members is not totalled up, than the L-1 party might not have

fulfilled the pre qualification criteria itself.

NDMC 5.72 The NDMC tender was a ‘design based tender’. Therefore the bidders had to specify

the number, height of poles etc. proposed to be provided by them to achieve the

prescroreibed lux level. Hence, different bidders proposed different number of poles of

different heights and lamps of different wattage depending on their proffered design. A fair

comparison on the basis of the tendered rates was not possible. In order to ensure fair

comparison of quoted rates, NDMC could have first finalised the design and thereafter

called the financial bids so as to provide a level playing field.

5.73 In case the design (quantities proposed) of M/s Philips India (L-1, NDMC) is adopted

and the tendered amount of rejected bidders is worked out on the basis of these uniform

quantities, the new rates that emerge are as under:

• M/s Keselec Schreder Pvt.Ltd. 36,79,55,662

• M/s Spaceage Switchgear Pvt. Ltd. 30,15,24,062

• M/s Bajaj Electricals 31,26,19,711

(These three rejected tenderers have not quoted for some items, for the sake of comparison the quoted rates for nearest different size of that item have been decreased / increased proportionately)

5.74 The tendered amount of 2 other agencies works out to less than the amount of M/s

Philips Electronics. Now the tendered amount of M/s Spaceage Switchgear is almost 5

crore lower than the accepted tendered amount of M/s Philips. Refer Annexure 5D and 5E

for detailed calculations. The main reason is the fact that M/s Philips had proposed 3815

poles of different sizes whereas M/s Spaceage proposed 6492 poles of different sizes.

Different agencies quoted different number of poles, with the number of poles proposed by

M/s Philips being the lowest.

5.75 Since the NDMC tender was also an item rate tender although the work was

proposed to be awarded to the firm whose tendered amount was the lowest, the tender

accepting authorities could have negotiated the rates of the items which were on higher

side in comparison to other bidders and got it reduced. A comparative rate statement given


84

in the Table 10 below reveals that the rates quoted by M/s Philips were higher for poles

with height of 11mt, 10mt, 8mt and 6mt.

Table 10: Variation in Rate of Poles quoted by Bidders

Pole Height (mts)

Rates quoted in per pole by

M/s Philips K. Schreder M/s Space Age M/s Bajaj Electricals

11 24,150 NA NA 19,560

10 21,846 16,600 21,500 NA

8 16,165 12,050 13,500 12,063

6 12,980 8,600 10,000 7,748

5.76 M/s Philips has overcome this rate difference and achieved the status of L1 by

reducing the number of poles erected from 6488 (existing number of poles) to 4780 which is

approx. 36% lesser. However, NDMC, while processing and accepting the tender, chose to

ignore these apparent facts and did not negotiate the rates. This also defeated the purpose

of calling tenders based on item rates as the winning bidder M/s Philips consortium had

quoted highest item rates, though overall they were lowest.

MCD 5.77 MCD had divided the work in two phases and the complete process with respect to

pre-qualification of parties, NIT etc. was done separately for both the phases. However, M/s

Sweka PowerTech Engineers was L1 in both the cases as lead partner with different

consortium members. On comparing the rates of major items i.e poles and lamps, it was

observed that there is huge variation in rates quoted for both the phases. Surprisingly rates

for Phase 1 are on higher side although the contract for Phase 2 was entered into after

almost 2 years. Total cost impact, if the lower of two quoted rates are taken to re-

compute the quoted amount for both the phases is 10.4 crore. Detailed calculations are

at Annexure 5F . The Table 11 below shows sample variation in rates-


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Table 11

Item Rate - Phase I

(Sweka + Schreder)

Rate - Phase II

(Sweka + Philips)

Diff. % Diff.

12 mtr pole 38,358 29,000 9,358 32%

10 mtr pole 28,974 26,000 2,974 11%

8 mtr pole 15,030 12,500 2,530 20%

Imported 400 W 32,000 27,000 5,000 19%

Imported 250 W 31,000 25,500 5,500 22%

5.78 Moreover, M/s Sweka was a consortium member with M/s Philips Electronics for

NDMC also. Same consortium have quoted higher rates in MCD for items of similar technical

specifications as shown in Table 12 below-

Table 12 Item MCD Rate - Phase II NDMC Rates

12 mtr pole 29,000 NA

10 mtr pole 26,000 21,846

Imported 400 W 27,000 25,071

Imported 250 W 25,500 24,445

5.79 A large number of cuttings and overwriting have been observed In financial bids

submitted by M/s Sweka (for Phase 1 and Phase 2 of MCD). This party incidentally was

awarded work for both phases by MCD. HLC has also learnt that the CBI has registered a

criminal case in the matter in August 2010. The status of the same is unknown. The

possibility of officers acting in league with the contractor to cause loss to MCD cannot be

ruled out.

Market Intelligence- Independent quotations 5.80 The table below shows the rates of lamps for different watts as per Philips price list

for 2008 & 2009. On conducting market intelligence with different wholesale vendors, it

was observed that the discounts offered by them is more than what was taken for


86

preparing Justification statements by PWD, MCD and NDMC. Moreover, during market

intelligence the negotiations were done for much lesser quantities than what were required

for carrying out the street lighting work on Delhi roads. Also, these rates have been taken

from wholesalers as opposed to the luminary manufacturers, who should have offered more

discounts. This clearly shows there were gaps in the negotiations done by these agencies.

Refer Annexure 5G for details of discounts offered to the agencies and rates used by them

for preparing justification statements vis-a-vis the discounts available in the market. (The

market rates could be obtained only for indigenous make fittings from Delhi local markets)

5.81 The total impact of approximately 16 crore has resulted due to using hiked rates

for preparing justification statements. Thus, justified rates would have been lower as

discounts available in market are higher. If new justified cost is calculated after taking into

account this impact, then contract value for PWD (totalled for 3 packages) and NDMC

becomes higher than the Justified Rates by 1.4% and 7.86% respectively which shows that

there was scope for negotiations. The detailed calculation is given in Annexure 5H.

Dismantled poles & luminaries

5.82 All three agencies decided not to use the dismantled poles and luminaries. It was

argued that since Government had decided to adopt the new standards prescribed by the

SISLC, the same could not be used anywhere else in the city. This is patently wrong. The life

span of poles made of galvanized steel is about 25 years and the poles that were replaced

were not more than 5-8 years old. They could have been gainfully utilised to cover those

less developed areas of the city which are still not covered. 250 watt luminaries could have

been used. It is amazing that senior officers in Government bought this strange logic

proffered by PWD engineers. The Department got a ‘credit’ of just 5.50 crore for the

dismantled poles while the cost of new purchases would run into several crore.

High Specification

5.83 HLC is also of the view that the prescribed lux level of 35lux (as/4.3) for the entire

city appears to be on the higher side keeping in view the maximum prescribed speed on

Delhi streets of 50 kmph. Further, in the Report of the SISLC, the spacing of fixtures has

been mentioned as ‘Max. Spacing for (S) in M.’, This itself seems to leave too much room for

differing interpretation. It has been noticed that the 40m spacing has been very rarely used


87

and the number of fixtures and wattage of luminaries have been increased and pole to pole

spacing reduced to increase the project cost. In case the recommendation was to read that

the normal or average spacing were to be maintained at 40m while specifying the

conditions where a lower spacing would be acceptable or recommending a process whereby

clearance for lower spacing would have to be taken from a competent authority, it would

have been possible to minimize the number of fixtures used and officers could have been

held responsible for recommending any additional fixtures.

‘International Standards’ concept Vague 5.84 To a specific query from the HLC regarding any comparison having been made at any

time of streetlighting standards of Delhi with other Asian, European or American cities, the

Department has replied that “no such comparison is available.”

5.85 Likewise, to a specific query regarding the total electricity consumption of

streetlighting in Delhi; the annual /monthly electricity bill and whether imported lights were

more energy efficient and savings, if any, in energy consumption, the Department has

replied that

“ the total electrical consumption of new streetlighting on Delhi PWD roads is Rs.147 lacs

per month. Due to higher light output ratio achieved in case of imported fittings, the

number of such fittings required to illuminate a particular area shall be lesser if compared to

number of indigenous fittings. In this way there will be saving which cannot be worked out

in terms of electricity consumption.”21

In this regard, it may also be noted that as early as May 2007, the Engineer in Chief had

written in his letter dated 30th May, 2007 that even with “a lower lux level which they are

providing on road surface, the power requirement is 31.2 KW per km against the

recommendations of the Committee constituted by the Hon’ble Chief Minister, Delhi under

the chairmanship of Principal Secretary (Power) which specifies only 22.3 KW per km.” It is

thus, clear that if the wattage is the same, there is not going to be any difference in

electricity consumption for domestic and imported luminaries. Thus, savings due to ‘so-

called’ energy efficiency of imported luminaries should have become available as lower

capital cost rather than revenue cost!

21 See Relevant Document 5 J


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5.86 HLC is of the view that if on the basis of the specifications prescribed by SISLC the

municipal bodies had tendered for lighting of streets on a per kilometer basis with

insistence on maintaining a control on the Lux Level, it would have forced the suppliers /

installers to attempt more efficient and location specific design as is the international norm,

rather than the current process and there could have been savings in the process.

Other observations, details and summaries 5.87 In case of PWD most of the documents are signed without putting dates by officials.

5.88 It was observed that the NDMC payment bills do not have the schedules attached for

showing cumulative quantities of individual items billed till date as required. The bills only

contain the quantities for items billed in that invoice.

Box 2: A word on the International Standard Specifications

GNCTD had set up the SISLC in 2006 and its Report formed the basis for undertaking the project for upgradation of Streetlighting in Delhi.

HLC has received inputs which indicate that while the Sethi Committee had set out ‘to adopt the latest in street lighting technology based on international standards……’, the final process adopted for calculating the required lighting levels in terms of ‘illuminance’ measured in Lux., instead of ‘luminance’ based on candle/sq.m. appears to be out of tune with the international standards.The significance of this can be understood on the basis of the definition of these terms:

Luminance Design- A design based on the amount of light which is reflected from a surface and reaches the eye of the observer. It is based on the “light” the observer sees at a given point and is based on the reflectance of the surface and the angle and distance of the observer from the point observed.

Illuminance Design- A design based on the amount of light which incidents on a surface. Illuminance ignores the surface upon which the light falls.

It would be apparent that luminance design is more ‘condition specific’ and can provide economical and tailor made solutions on the basis of the reflectance from surrounding surfaces, whereas illuminance design is based on a direct measurement of light output from the source and can only give generic solutions which would not be site specific.


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5.89 Comparison between average cost per km of road length w.r.t estimated cost,

contract value and approximately billed can be seen in Annexure 5 I.

5.90 Summary of rates of luminary taken for preparing estimate of cost, justification

statement and contracted rates by all the Agencies can be seen in Annexure 5 J.

5.91 Annexure 5 K provides details of comparison between quantities of material that

was agreed as per contract and actual quantities for which payment has been made as per

last running bill, quantities as per last running bill being higher. As per CPWD manual,

deviations in quantities of individual items of more than 10% should have been approved in

principle as per delegation of powers. It seems that AIP has not been taken by any of the

Agency before making payments.

Box 3: Major Findings of HLC

• The process of tendering and allocation of work was badly compromised • By bringing in the concept of manufacturer as the lead partner, competition was restricted

and electrical contractors were totally eliminated. • From out of nowhere, the idea of using imported luminaires was brought in. They were 3

times more expensive than domestic luminaires. The wattage and lux level of both are the same. The successful parties made a ‘killing’ by bidding much more than the price at which they imported the luminaires. Considering the fact that the contract was being awarded inclusive of 7 years maintenance, the advantage of going in for imported luminaires was more than neutralized.

• Unusual interest was displayed by the Hon’ble Chief Minister in this project. This is demonstrated by the fact that meetings were held at her residence, imported luminaires were approved by her and competition was restricted to only three parties at her instructions.

• Justification rates were not evolved on the basis of market rates but were concocted on the basis of L1 rates.

• Loss to Government (PWD,NDMC,MCD) is estimated to the tune of 46.02 crore


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Chapter 6: Streetscaping and Beautification of Delhi Roads

Introduction

6.1 Government of NCT of Delhi, NDMC and MCD undertook extensive work relating to

street scaping and beautification of identified Delhi Roads in the run up to Commonwealth

Games in October, 2010.

Work Summary

6.2 Govt. of NCT of Delhi planned to develop the road transport infrastructure with a

massive flyover construction program, to render the important traffic corridors signals free

for vehicular movement and also to provide through traffic for important arterial road in

view of Commonwealth Games to be held in 2010.

6.3 Work under street scaping and beautification of roads was planned with the

objective to beautify the areas and provide better facilities to the pedestrian, cyclists as well

as vehicles in form of the following which would be at par with what is seen in cities abroad:

• Informative shoulder mounted signages and road markings,

• Landscaping of available spaces,

• Street furniture,

• Information Kiosks,

• Public toilets, wherever feasible,

• Facilities in form of drinking water, telephone booths, garbage dhalaos,

• Urban landscaping including beautification and environmental works,

• Space for advertisement panels conforming to rules and regulation in force,

• Any other measures to enhance the character of the locality/ area

• Pedestrian facilities like benches and seating arrangement,

• Bollards,

• Bollards light in pedestrian plaza,

• Plants Guards,

• Police Booths,

• Bus- Q- Shelters,


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• Barrier free movement of physically challenged and aged,

• Focus lights, ornamentals lights, if any.

• Any other item required for the purpose.

Chronology of Events: 6.4 An anlysis of chronology of events shows that unlike many other projects related to

CWG 2010, the empanelment of consultants for street scaping works was completed in the

year 2005 itself. Yet works commenced only in October – November 2009 and were

somehow completed just before the commencement of Games.

Box 1: Delhi getting decked up for Commonwealth Games

Tuesday, 14 September 2010 Delhi is getting all dolled up for the Commonwealth Games and its doing so in style. From ornamental street furniture to fancy signages, civic agencies are pulling out all stops to make the Capital look uber-attractive. Elaborate decorative signages, bill boards and street art have sprouted throughout the city, ensuring visitors get a feel of world-class cities such as Hong Kong and Sydney when they come calling during the Games. The New Delhi Municipal Council (NDMC), Municipal Corporation of Delhi (MCD) and Public Works Department (PWD) are installing street furniture on a number of roads. The beautification project will be completed by September 25. Right from information kiosks, luxury toilet complexes, modern street art, vending kiosks, aesthetically appealing foot over-bridges, and trendy streetlights have been put up across the city. “Street furniture has revolutionized the style and look of cities all over the world. The Games gave us a perfect opportunity to come up with a similar project in Delhi too. This will give a swanky look to the city ahead of the Commonwealth Games,” said Deep Mathur, director, press and information, the MCD. Most of the street furniture is being installed on the roads leading to the Commonwealth Games venues and stadiums. To ensure people do not damage the street furniture, the civic agency has used material which is scratch-free. “The material of all the street furniture being installed for the Games has been carefully selected to ensure that no one can leave scratches on it. Also, the surface has been made in such a manner that people will not be able to stick pamphlets or posters on it,” said a senior MCD official. The MCD has said while the street furniture being installed in the Capital is of international standards, it has been specially adapted to suit Indian taste. The street furniture being installed also includes signages and kiosks that will help tourists get information about the Capital. Source: Media Reports

http://commonwealthdelhi2010.blogspot.com/2010/09/delhi-getting-decked-up-for.html�


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# Events

1 19 consultants were empanelled before 2005 for street scaping work and one more consultant was added to the list in the year 2008.

2 Expression of interest for consultancy services for street scaping and beautification of area around Commonwealth games venues was invited from empanelled consultants in May 2008.

3 Board of Assessors evaluated the technical and financial bids for various consultants. PWD, GNCTD appointed various consultants for street scaping of roads (pertaining to MCD, PWD, DDA, CPWD and NDMC) around Commonwealth Games venues from October 2008 to January 2009.

4 Tenders were awarded by PWD to various consultants as mentioned in table no. 1.3.1.

5 A/A and E/S of Lt. Governor, Delhi for incurring the expenditure on consultancy amounting to 6.35 Crore including service charges @ 12.36% was provided dates 01.04.2009.

6 The selected consultants submitted the preliminary estimates for the aforesaid roads in their respective packages around games venues and the same were checked and approved by respective organisations i.e. PWD, NDMC and MCD.

7 Tenders were called by respective division under PWD, MCD and NDMC for main works between May 2009 to September 2009 and were awarded to various contractors as mentioned in table 1.3.2

8 Execution of works was started from October / November 2009 and 8 months were allowed for completion of each work. Works were substantially completed in September / October 2010. Final completion certificates are yet to be issued to various contractors.

Financial Particulars 6.5 The details of consultancy works for all streetscaping works undertaken in Delhi in

the run up to CWG 2010 have been presented in Table 1 below:

Table 1: Streetscaping Projects Summary (Consultancy works)

# Package / Venue/ Road Length Agency Awarded Contract Value Date of Award of Work

A Awarded during 2008 based on Rupees per kilometer

1. Roads around Yamuna Sports Complex / Road No. 56 (GT Road NH- 24), Road no. 71, 71 A, Road no. 58, 58 A / 11.5 Km

M/s Parekh Associates

@ 12,99,000 + s/ tax per Km

1,49,38,500 + s/ tax

08.10.2008

2. Indira Gandhi Indoor Stadium / M/s Oasis @ 12,40,000/ + 08.10.2008


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Ring Road (Rajghat to Ashram), Delhi Sachivalaya Road (Vikas Minar to Kishan Ghat Road), I.P Marg (BSZ Marg to Sachivalaya Road), Kisan Ghat Road (Ring Road to Sachivalaya Road) / 10.98 Km

Designs Inc. s/ tax per Km

1,36,15,200/ + s/ tax

B Awarded during 2009 based on lump sum contract (per km cost is derived)

Sl. No.

Package / Venue/ Road Length Agency Awarded Contract Value Cost / Km (In lacs)

Date of Award Work

1. Package ‘A’ Thyagaraja Sports Complex / Aurbindo Marg, Roads near Vikas Sadan, Gangnath Marg, Roads parallel to Kushak Nala, Brig. Hoshiar Singh Marg / 7.3 Km

M/s Sikka Associates

76.00 lac + service tax

10.41 07.01.2009

2. Package ‘B’ Dr. Karni Singh Shooting Range/ Mahrauli - Badarpur Road, Suraj Kund Road, Prehladpur Road / 6.5 Km

M/s Pradeep Sachdeva


12.5 07.01.2009

3. Package ‘C’ Siri Fort Complex / August Kranti Marg, J.B. Tito Marg, Siri Fort Road, Balbir Saxena Marg, Joginder Singh Marg, Ch. Dilip Singh Marg / 7.7 Km



10.38 07.01.2009

4. Package ‘D’ R.K. Khanna Tennis Stadium / Aftica Avenue Marg, Nauraji Nagar Marg, Mohammadpur Road, Ch. Harsukh Marg, Venketeshwar Marg / 7.2 Km



8.26 07.01.2009

5. Package ‘E’ National Stadium / Mathura Road, Bhairon Road, Purana Qila Road, Shershah Road, Around India Gate / 5.7 Km

Under supervision of CPWD (India Gate), NDMC (Purana Qila, Shershah Rd.), DIMTS (Mathura Rd.) and M/s Intach (Bhairon Marg)

No separate package awarded

6. Package ‘F’ Games Village / Marginal Bund Road, NH – 24, Vikas



11.07 07.01.2009


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Marg / 6.5 Km

7. Package ‘G’ Delhi University and Chatrasaal Stadium / Mahatma Gandhi Marg (Ring Road), Guru Teg Bahaur Marg, Shreya Mishra Marg, Kingsway Camp Road, Chatra Marg, Sudhir Bose Marg, Viswa Vidhyalaya Marg, Cavalry Lane, QC Narang Marg / 9.4 Km



12.5 07.01.2009

8. Package ‘H’ JLN Sport Complex /Lala Lajpat Rai Path, Lodhi Road, Bhisham Pitamah Marg, JLN Stadium Marg, MC Market to JLN Stadium, Jor Bagh Road / 6.4 Km



12.5 07.01.2009

9. Roads around Yamuna Sports Complex / Road No. 56 (GT Road NH- 24), Road no. 71, 71 A, Road no. 58, 58 A / 11.5 Km

(Awarded earlier)

M/s Parekh Associates

@ 12,99,000 + s/ tax per Km

1,49,38,500 + s/ tax

12.99

08.10.2008

10. Indira Gandhi Indoor Stadium / Ring Road (Rajghat to Ashram), Delhi Sachivalaya Road (Vikas Minar to Kishan Ghat Road), I.P Marg (BSZ Marg to Sachivalaya Road), Kisan Ghat Road (Rind Road to Sachivalaya Road) / 10.98 Km

(Awarded earlier)

M/s Oasis Designs Inc.

@ 12,40,000/- + s/ tax per Km

1,36,15,200/- + s/ tax

12.4 08.10.2008

Total Cost of Consultancy Works (approximately) 8.52 crore + service tax

Main Works under PWD, NDMC and MCD 6.6 A list of the main works taken up under streetscaping by all three agencies, viz. PWD,

MCD and NDMC has been provided in Table 2 below.

Table 2 Streetscaping Projects Summary (Main works under PWD, MCD and NDMC)

# Name of Project Contractor Contract Value ( ) Date of Award of contract / *Date of start of work as per contract

PWD

1. Around Yamuna Sports Complex, Delhi (Road no. 58,

M/s Satya Prakash and

40,63,89,350 03.10.2009


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58A, 71, 71A, 56, 75 B Extn.) Brothers Pvt. Ltd.

2. Street scaping of Mall Road from Delhi University to Chhatrasal Stadium (3.6km) for CWG-2010 at Delhi (Package-G)

M/s Satya Prakash and Brothers Pvt. Ltd.

24,15,46,397 03.10.2009

3. Around CWG Village (NH-24, Marginal Bundh Road and Vikas Marg)

M/s Satya Prakash and Brothers Pvt. Ltd.

34,62,64,007 03.10.2009

4. Street Scaping works for

(i) Africa Avenue Marg (ii) August Kranti Marg

(iii) Balbir Saxena Marg

(iv) Sirifort Road

M/s Satya Prakash & Bros. Pvt. Ltd.

25,26,91,465 05.10.2009*

5. Around Indira Gandhi Indoor Stadium: Kishan Ghat Road, East Velodrome, North Velodrome, Ring Road from Rajghat to ITO flyover & I.G. slip road

MBL Infrastructures Ltd.

16,13,73,737 12.10.2009*

6. Around Indira Gandhi Indoor Stadium: Ring Road Bhairo Marg to ITO flyover, I.P. Marg and Bhairon Marg

M/s Sharma Constructions

28,40,58,775

7. Around Indira Gandhi Indoor Stadium: Ring Road from Ashram to Bhairon Marg Crossing

M/s SAM (India) Built Well Pvt. Ltd.

38,92,52,538 05.10.2009*

8. Dr. Karni Singh Shooting Range (Mehrauli Badarpur road from shooting range'T' point to Prehladpur 'T' point)

Ralhan Construction Co.

24,42,40,799 12.10.2009*

A Total works under PWD 232,58,17,068

NDMC

1. Park Street and Old R.K. Ashram Marg (Park Street to Mother Teresa) (Civil & Elect. works)

M/s Raunaq Const. Co.

2,56,36,149 16.11.2009*

2. Park Street and Old R.K. Ashram Marg (Park Street to Mother Teresa) (Hort. Works)

M/s R.K. Jain & Sons Hosp. Pvt. Ltd.

16,51,201 23.02.2010*


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3. Udyan Marg (Civil & Elect. Works)

M/s Raghav Engineer

1,80,73,472 16.11.2009*

4. Udyan Marg (Hort. Works) M/s R.K. Jain & Sons Hosp. Pvt. Ltd.

5,12,351 31.03.2010*

5. Old R.K. Ashram Marg (From Park Street to Kali Bari Marg)(Civil & Elect. Works)

M/s Raunaq Const. Co.

2,51,68,461 16.11.2009*

6. Old R.K. Ashram marg (From Park Street to Kali Bari Marg)(Hort. Works)

M/s O.C. Const. Co.

9,19,627 03.04.2010*

7. Mandir Marg (Civil & Elect. Works).

M/s Devi Const. Co.

6,55,58,278 09.11.2009

8. Mandir Marg (Hort. works) M/s Expert Const. Co.

28,30,829 29.05.2010*

9 Aurobindo Marg (Civil & Electrical)

M/s India Guniting

6,47,70,327 05.11.2009

10 Aurobindo Marg (Horticultural) M/s O.C. Construction Pvt Ltd.

49,59,843

02.03.2010

11 Street scaping of Brig. Hoshiyar Singh Marg (Civil works)

M/s KBG Engineers

5,17,07,776 14.11.2009*

12 Street scaping of Brig. Hoshiyar Singh Marg (Hort. works)

M/s Jagjeet Singh

33,17,396 09.03.2010*

B Total works under NDMC 26,51,05,710

MCD

1. Around Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium for CWG 2010. W.O. No :- 108 dt. 26.10.09

M/s MBL Infrastructure Ltd.

26,38,70,000 26.10.2009

2. Around Dr. Karni Singh Shooting Range and JLN Sports Complex for CWG 2010.

M/s MBL Infrastructures Ltd.

38,74,96,000 27.10.2009

C Total works under MCD 65,13,66,000

D Grand Total 324,22,88,778


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6.7 In brief, the total value of all streetscaping works undertaken in Delhi in the run up

to CWG 2010 was 333.80 crore. Value of all consultancy work was 9.57 crore, while that

of works executed by PWD was 232.58 crore, MCD 65.14 crore and NDMC 26.51 crore.

6.8 Further, tender analysis reveals that 5 contractors cornered about 92% of the total

streetscaping works. M/s Satya Prakash & Bros. Pvt. Ltd. alone got nearly 38% of the

contracts. Details are as under:

Table 3

Name of Contractor Value ( in crore)

M/s Satya Prakash & Bros. Pvt. Ltd. 124.69

M/s MBL Infrastructures Ltd. 81.27

M/s SAM (India) Builtwell Pvt. Ltd. 38.92

M/s Sharma Construction 28.4

M/s Ralhan Construction Co. 24.42

Others (Total 9 Contractors) 26.52

Total 324.22

Street Scaping Works Overview

3%

69%

20%

8%

Consultancy Works

Works under PWD

Works under MCD

Works under NDMC


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Projects scrutinised 6.9 The names of projects which were taken up for scrutiny by teams of HLC are as

under:

Contractor's work - Percentage Share under PWD, MCD and NDMC

38%

25%

12%

9%

8% 8%

M/s Satya Prakash & Bros.Pvt. Ltd.

M/s MBL Infrastructures Ltd.

M/s SAM (India) Builtwell Pvt.Ltd.

M/s Sharma Construction

M/s Ralhan Construction Co.

Others (Total 9 Contractors)

S.No. Agency Name

Name of Project Division Name Financial Particulars & Project Details

1 PWD Yamuna Sports Complex M 241 Refer Relevant Document 6A

2 PWD Commonwealth Games Village venue

M 243 Refer Relevant Document 6B

3 NDMC Aurobindo Marg Gol market Refer Relevant Document 6C

4 NDMC Mandir Marg Gol Market Refer Relevant Document 6D

5 MCD Thyagraja Sports Complex Seva nagar Division Refer Relevant Document 6E

6 MCD Dr. Karni Singh Lajpat Nagar Division Refer Relevant Document 6F


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6.10 Based on the review of available files and documents pertaining to street scaping

works, the broad conclusions that emerge are as under:

Summary of Observations

1 Governance Issues

1.1 NIT clause 3.0 “Scope of Work” provided that no single consultant will be awarded more than two packages. This condition was later waived by the Lt. Governor of Delhi on 11.12.2008. Instead of removing this condition, efforts should have been made to persuade all the empanelled consultants to participate in bidding for better consultation and wider representation.

1.2 Only 4 out of 20 empanelled consultants submitted bids for all the 7 packages and only 2 of them cornered all the 7 packages. This leads to the inevitable inference that cartelization had taken place. The other 2 having already been awarded 2 earlier packages.

1.3 Packages were awarded on per Km basis for landscaping consultancy work in respect of 2 earlier packages which were repetitive in nature. Subsequently 7 packages were awarded on lump-sum basis with provision for variation in scope of work. The rates per km worked out vary from 8.26 lacs per km to 12.99 per km, thus showing huge variation.

1.4 Award of 54% of total street scaping works contract under PWD to single contractor M/s Staya Prakash and Brothers Pvt. Ltd. Contractor has been awarded 124.69 crore out of 232.58 crore works and has bagged 4 out of 8 projects under PWD.

1.5 Labour license was obtained by contractor M/s MBL Infrastructure Ltd. only after six months (March 2010) from the commencement of street scaping work around Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium under MCD in October 2009. Non compliance on procedural part of contractor.

1.6 Vitiating the tendering process under NDMC for Aurobindo Marg Project by not evaluating the technical bids in terms of eligibility criteria specified in NIT. As per NIT for Horticulture Work the eligibility criteria was that the bidders should be Class II contractors of horticulture works; otherwise were required to produce definite proofs from the appropriate authority of having completed similar work of required magnitude. Out of 3 eligible bidders, 2 firms i.e M/s India Guniting and M/c O C Constructions are listed in B&R Category and not in the Horticulture works category as stipulated in NIT. Later the work was awarded to M/s O C Construction Pvt Ltd being L1.

2 Over payments to Consultants

2.1 Consultancy charges have been considered by consultants on initially proposed fewer items which were neither considered in contractor’s scope of work nor executed. Recoveries from the consultant fees should be made for all such items.

2.2 Consultant M/s Parekh Associates is overpaid for Roads around Yamuna Sports Complex under PWD and recoveries not have been made from him even after


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reduction in scope of work from 10.57 km to 9.08 km.

PWD to investigate whether detailed working drawings were submitted by consultant for reduced (10.57 – 9.08) km stretch or not. If not, recoveries needed for both detailed working drawings as well as supervision work at the rate of 40% and if yes, recoveries needed only for supervision work as stated in their payment terms.

3 Very high or incorrect estimates

3.1 Unrealistically high estimates were prepared by consultants and savings from all the projects under PWD, MCD and NDMC were consumed unnecessarily to utilize the sanctioned or allocated funds for the projects.

3.2 Mismatch between physical and financial progress of work for Yamuna Sports Complex project under PWD

4 Anomalies in justification of rates

4.1 Items where negotiated rates were higher than justified rates are over executed by contractor M/s MBL Infrastructure Ltd. for roads around Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium under MCD and thus undue advantage and benefit has been given to contractor with cost impact of 23.86 lakh

4.2 Items where negotiated rates were lower than justified rates are under executed by contractor M/s MBL Infrastructure Ltd. for roads around Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium under MCD and thus undue advantage and benefit has been given to contractor and has cost impact of 1.02 crore

4.3 Higher rates quoted by same contractor M/s MBL infrastructure Ltd. for similar items in two different contracts of street scaping works under MCD has cost impact of 2.03 crore

4.4 Very high difference in negotiated rates quoted by M/s MBL Infrastructure vs justified rates, gives cost impact of 3.83 Crores for project under MCD.

4.5 Excess of Negotiated Item Rates over Competitive Quotation – huge difference between rates quoted by M/s MBL Infrastructure and C&C construction Ltd for projects under MCD.

5 Time overruns

5.1 Time overruns has been observed in all projects under PWD, MCD and NDMC upto 50% with out affecting the overall project cost gives clear indication that estimates prepared were unrealistically high.

6 Less participation from various agencies for getting the work

6.1 Very less participation has been observed for street scaping works under MCD which does not give competitive edge on technology and cost of the project. A trend has been observed that a single contractor M/s MBL Infrastructure Ltd. has cornered both the 2 works contracts under MCD.


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7 Huge Variations in Estimated Vs Actual Quantities

7.1 Huge variation between estimated vs actual quantities executed by M/s MBL Infrastructure Ltd. around Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium under MCD for roads around gives additional cost impact of 9.37 crore

Detailed Observations

Governance Issues

6.11 As per the clause no. 3.0 “Scope of Work” stated in NIT for providing consultancy

services for various packages (A to G) of streetscaping works around Commonwealth Games

venue roads, no single consultant was allowed to take up more than two packages. This

condition was later waived by the Lt. Governor of Delhi on 11.12.2008 in light of urgency

involved. Instead of removing this condition, efforts should have been made to persuade all

the empanelled consultants to participate in bidding to ensure wider representation. It has

been observed that M/s Sikka Associates and M/s Pradeep Sachdeva have won three and

four packages respectively22

6.12 NIT for providing consultancy services was sent to 20 empanelled consultants and

out of 20 only four consultants which are M/s Sikka Associates, M/s Pradeep Sachdeva, M/s

Parekh Associates, and M/s Oasis Design Inc. have responded to NIT and submitted bids for

all the 7 packages. Only 2 of them cornered all the 7 packages, the other 2 having already

been awarded 2 earlier packages. This leads to the inevitable inference that cartelization

had taken place

.

23

.

22 See Relevant Document 6G 23 See Relevant Document 6H

Box 2: Were certain contractors favoured?

Award of 54% of total street scaping works contract under PWD to single contractor M/s Satya Prakash and Brothers Pvt. Ltd. This firm has bagged 4 packages worth 124.69 crore out of total 8 packages of 232.58 crore that were executed by PWD.


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6.13 Street scaping Projects Summary (Consultancy works) - inconsistencies have been

observed in finalizing the consulting charges with various consultants for streetscaping

works. Initially consultants (M/s Parekh Associates and M/s Oasis Designs Inc.) were

awarded the packages with consultancy charges on ‘per Km’ basis. M/s Parekh Associates

has been awarded the package at 12.99 lakh + Service Tax per km and M/s Oasis Design

Inc. has been awarded the package at 12.40 lakh + Service Tax per km. This does not

justify the basis of awarding consulting works, which is repetitive in nature after a certain

extent. Subsequently, 7 packages were awarded on ‘lump-sum’ basis with provision for

variation in scope of work. The rates per km worked out vary from 8.26 lakhs per km to

12.99 lakhs per km, thus showing huge variation.24

6.14 All streetscaping contracts under PWD have been listed in Table 2. It has been

observed that out of total

232.58 crore, street scaping works of 124.69 crore were

awarded to one single contractor, M/s Satya Prakash and Brothers Pvt. Ltd., which is almost

54% of total volume of work under PWD. The contractor has been awarded 4 out of 8

projects at 15.91%, 11.11%, 14.87% and 18.18% above the estimated cost put to tender in

streetscaping projects respectively25

6.15 Labour license from Ministry of Labour and Employment was obtained by M/s MBL

Infrastructure for street scaping and beautification of MCD roads in month of March 2010

. Awarding multiple projects to single contractor may

cause significant time overruns across projects due to mobilization of insufficient

manpower, equipments and machinery at multiple project locations. Operating multiple

sites at same time at different locations may also cause improper supervision at work and

quality of work may get affected. It has also been observed that time overruns of about

50% have occurred in all such projects.

26

whereas the work actually started in the month of October 2009. This shows procedural

lapse on part of contractor M/s MBL Infrastructure and lack of supervision from MCD.

24 See Relevant Document 6 I 25 See Relevant Document 6 J 26 See Relevant Document 6K


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6.16 As per NIT for Horticulture Work, the eligibility criteria was that the bidders should

be Class II contractors of horticulture works or produce proofs from the appropriate

authority of having completed similar work in scope and magnitude. Out of 3 bidders, 2

firms i.e M/s India Guniting and M/s O C Constructions are listed in B&R Category and not in

the Horticulture works category as stipulated in NIT27

Over-payment to Consultants

. It is observed that for Horticulture

works the bids of firms which are registered under B&R category were treated as technically

qualified. Moreover, when Finance Department asked NDMC to ensure authenticity of

‘work completion certificates’ submitted by these parties, the Department refused to do so

on the plea that given the urgent nature of work (as it was related to CWG 2010), they had

no other option but to treat the copies of submitted documents as ‘true’ and valid.

6.17 Consultants have considered estimates of following items in their respective

proposals even though, these items were not considered while awarding the main work to

the contractor and were also not executed in streetscaping works, but consultants have

been paid for their services against such items. List of these items are as under:

a. Street furnitures

b. Information Kiosks

c. Public toilets, wherever feasible

d. Facilities in form of drinking water, telephone booths, garbage dhalaos

e. Space for advertisement panels conforming to rules and regulation in force

f. Pedestrian facilities like benches and seating arrangement,

6.18 It has been found from the financial bid of M/s Sikka Associates28

27 See Relevant Document 6L

that aforesaid

items were considered in their proposal and costing against individual items was made by

consultant for providing detailed designs and construction supervision work. Cost of all such

items has also been aggregated to arrive at total estimated cost put to tender by consultant.

He has been awarded 3 packages out of 7 packages. Later these items were removed from

street scaping works and were awarded to DTTDC to be executed on BOT basis under the

head of ‘street furniture works’. No consultancy work has been done for these items under

28 See Relevant Document 6M


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streetscaping works. Hence, there is a case for recovering the excess payment made against

such items from the consultants.

6.19 It is also evident from Table showing Street scaping Projects Summary (Overview),

that the expenditure on consultancy work is approximately 3% ( 8.52 Cr + Service Tax) of

overall expenditure of all street scaping works, which is very high for a consultancy work

that is repetitive in nature.

Reduction in scope of work but full payment made to consultant

6.20 As per the records, consultancy for roads around Yamuna Sports Complex was

awarded to M/s Parekh Associates at 12,99,000 + Service Tax per kilometer. Payment

details to the consultant as per the contact were as follows:

Box 3: Consultancy Cartel

Review of documents reveal that the consultant’s formed a cartel and cornered consultancy packages for all street scaping works. Further, there appears to be no justification for paying very high consultancy charges to consultants on per km basis for work which is repetitive in nature. Once the design for one km stretch of the road had been approved, the same was applied on the entire stretch.

Further, the administrative and financial sanction was accorded on very high estimates prepared by the consultants. This is borne out by the fact that even when there was time overrun of 50% in all projects, there was no cost overrun (in some cases there were savings). This clearly indicates that estimates were unrealistic.


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Stage of work

Description of work Payment

I On submitting draft refurbishment Plan / Design of the selected alternative along with modified cost estimates.

10% of total fees.

II On submitting drawing for obtaining approval from statutory authorities and obtaining approval there in after

30% of total fees – minus already paid under I above.

III On submitting detailed specifications, bill of quantities, detailed, Architectural working drawings, structural and services design for the preparation of tender document.

50% of total fees – minus already paid under II above.

IV Providing detailed working drawings and supervision of work during executing

90% of total fees – minus already paid under III above to be evenly distributed over the period of execution / implementation to be paid on receipt of supervision Memo. No fees will be payable for the period during which works stop for any reason.

V On completion of the work. Full amount – minus already paid under IV above.

6.21 It is clear from the payment schedule of consultant 40 % (stage III & IV) of fee has

been kept for detailed working drawings and supervision of work during execution.

Considering the scope reduction from 10.57 Km to 9.08 Km, recoveries have not been made

for the consultancy charges. No monitoring reports which may have been submitted by the

consultants were shown or made available to HLC.


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a) Detailed working drawings not submitted – Recoveries @ 40% of 12.99 lakh + Service Tax per kilometer for ( 10.57 – 9.08) km = 1.49 Km

5.19lakh + Service Tax per km. i.e. 7.74 lakh + S/tax for 1.49 km

b) Detailed working drawings submitted – Recoveries only for supervision @ 50% of 40% of Rs. 12.99 lakh + Service Tax per kilometer for ( 10.57 – 9.08) km = 1.49 Km

2.60 lakh + Service Tax per km i.e 3.87 lakh + S/tax for 1.49 km

M/s Parekh Associate has been paid 1.50 crore (upto VI RA Bill)

Incorrect estimates

6.22 Preliminary estimates prepared by consultants were unrealistically high and finally

detailed cost estimates were derived on these basis. In view of the fact that 50% time

overruns were observed in most projects without affecting the project cost. Particularly

projects awarded under PWD were completed within 60% of total project cost. This gives

clear indication that projects savings from all the projects under PWD, MCD and NDMC were

consumed unnecessarily to utilise the sanctioned or allocated funds for the projects.

6.23 Mismatch between project physical and financial progress has been observed for

streetscaping and beautification of PWD Roads around Yamuna Sports Complex, Delhi (Road

no. 58, 58A, 71, 71A, 56, 75 B Extn.) As per the records it has been found that there has

been scope reduction from 10.57 km to 9.08 km. Following are the details of actual lengths

of roads which have been executed against the total length in sanctioned estimate.

Details of Roads

Length in sanctioned estimate (in meters)

Length available / finally executed (in meters)

56 2270 1170

58 2280 1890

58A 1600 1600

71 1700 1700

71A 620 620

75 B (Extn) 2100 2100

Total of YSC 10570 9080


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6.24 It is evident from the facts that work in 85% of total stretch (9080/10570) has been

executed, whereas Financial progress is just 25.5 crore (payments made to contractor

including expected payments) against contract value of 40.64 crore, which constitutes

approximate 63% of total contract amount. This mismatch between the physical (85%) and

financial progress (63%) of work clearly indicates that estimates and justification prepared

were high and inaccurate.

Anomalies in justification of rates

6.25 It has also been observed that in Streetscaping and Beautification of MCD roads

around Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium for CWG,

2010. W.O. No :- 108 dt. 26.10.09), that the contractor M/s MBL Infrastructure Ltd. over

executed (higher than the estimated quantities) those items of work whose negotiated rates

were higher than justified rates (high rated items). The cost impact of such works is 23.86

lakh. (Refer to Relevant Document 6N & 6 O)

Arbitrary work by Contractors

6.26 It has also been observed that the contractor under-executed (lower than the

estimated quantities) certain items of work where the negotiated rates were lower than

justified rates (low rate items). The cost impact of such works is (1.02 crore). (Refer to

Relevant Document – 6 P)

Same Work, Same Contractor, Different Division, Higher Rates

6.27 It is observed that the same contractor quoted higher rates for undertaking the same

type of work in other Works Divisions of MCD and no effort was made by MCD officials to

ensure uniformity of rates in different Divisions. Cost impact of such instances of higher

rates quoted by same contractor for the following streetscaping projects with other

Divisions of MCD is 2.03 crore. Details of calculation can be viewed in Relevant Document

– 6 N, 6 Q and 6R.

a. Streetscaping and beautification of MCD roads around Thyagraj Sports

Complex, Siri Fort Complex and R K Khanna Tennis Stadium for Commonwealth

Games 2010. W.O. No :- 108 dt. 26.10.09

b. Streetscaping and beautification of MCD Roads around Dr. Karni Singh

Shooting Range and JLN Sports Complex for Commonwealth Games 2010.


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Excess of Negotiated Item Rates over Justified Item Rates

6.28 The justification was prepared for streetscaping works for roads surrounding Karni

Shooting Range as well as JLN Sports Complex at 38.77 crore on 6th October, 2009. MBL

Infrastructure, the L1 bidder had earlier (24th September,2009) quoted 40.99 crore for the

same. After preparation of justification, negotiations were held with the bidder, whereby

the bid was further reduced to 38.75 crore. Though this bid is, per se, below the justified

cost, item wise comparison of justified rate with negotiated rate, it was observed that for

several items, the negotiated rate was way over the justified rate for those items, implying

that further negotiations could have been undertaken for these items. The total impact of

this amounts to approximately 3.83 crore. (See Relevant Document 6 S)

6.29 Excess of Negotiated Item Rates over Competitive Quotation - Two bids were

received for the streetscaping work around Karni Shooting Range and JN Sports Complex,

from MBL Infrastructure (L1 - 40.99crore) and from C&C Constructions ( 49.91crore).

After preparation of the justified rates, negotiations were held with the L1 bidder, who

brought their bid down to 38.75 crore. Though this bid, on the whole, is lower than the

C&C bid, it was observed that there were various items for which the rates contracted with

MBL were higher than the C&C rates, indicating potential for further negotiations. The

impact of the same amounts to approximately 6.02 crores. (Relevant Document 6 T)

Time overruns

6.30 Work on all streetscaping works under PWD, MCD and NDMC commenced in

October / November 2009 and a period of 8 months was provided for completion of each

work. Major time overrun of 3 to 4 months (up to 50%) has been seen across all the

projects, without affecting the project cost. Final completion certificates are yet to be issued

to various contractors.

Have all components been executed? 6.31 It has also been observed that certain facilities which had been promised have not

been provided. Absence of any seating arrangements for the elderly or pedestrians in areas

where streetscaping projects were undertaken puts a question mark over the “world class”

streetscaping works undertaken in Delhi. Some Police booths, which have been constructed

on Lodhi road and Bhisma Pitamah Marg by Delhi Tourism Development Corporation, have


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remained largely unutilised. Whether this is due to ‘design flaw’ or ‘operational

inconvenience’ to the Police personnel is not clear.

A view of an incomplete streetscaping work near Khan Market in run up to CWG 2010

Deliberate Delays

6.32 During the construction phase, it was observed that contractors would often

commence work and then leave it half-done with debris and construction material scattered

all over for weeks on end. Works which could have been completed in a systematic manner

without causing much public inconvenience were deliberately delayed. These were

ultimately ‘somehow’ finished just before the Games. But the quality of work did suffer in

the completion rush.

Box 4: Wayward Contractors

In streetscaping works, it was observed that contractors ‘deliberately’ delayed completion of works; over executed those works where item rate was highest and under executed those works where item rate was comparatively low. This is suggestive of ‘lack of control’ over contractors; non existent monitoring system and complicity of officials with contractors.

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110

Little competition

6.33 After obtaining approval for the draft RFP / NIT from the competent authority, the

item rate tenders for the aforesaid work were called vide NIT No. D/EE (Pr.)-I/Central Zone/

2009-10/15 dated 12.08.2009 due on 03.09.2009. Six tenders were sold. However, on the

last date of bid submission, only one bidder M/s MBL Infrastructure Ltd. submitted his bids.

The bidder was technically qualified and eligible for opening of financial bid. However,

considering the inadequacy of response / competition competent authority decided to recall

the tender. In second call, seven tenders were sold and 2 tenders were received which were

M/s MBL Infrastructure and M/s C&C construction limited. Both bidders were technically

qualified and M/s MBL Infrastructure being the lowest was awarded the job after

negotiations. Records show that there was little or no competition among agencies for

securing this project. The possible reasons could be due to stringent pre qualification and

eligibility criteria for bidders, time bound nature of project and low visibility of the project in

the initial stages29

Huge Variations in Estimated Vs Recorded Quantities

.

6.34 Huge variations were observed between the estimated quantities and quantities

recorded in Measurement Books for streetscaping and beautification of MCD roads around

Thyagraj Sports Complex, Siri Fort Complex and R K Khanna Tennis Stadium for CWG 2010.

W.O. No :- 108 dt. 26.10.09.

Table 4:

BOQ Item No.

Brief Description UOM Estimated Qty

(A)

Quantity

Recorded in MB

(B)

% Variation

Justified Rate

Negotiated Rates (Per Unit Rate)

(C)

Cost Impact additional (In. Rs.) (B–A) x (C)

1.01 Earth work in excavation by mechanical means for all kind of soils

Cum 6137 42254.23 589 125.2 104 37,56,192

2.01 (a)

Providing and laying in position cement concrete

Cum 131 2407.16 1738 3103.6 3000 6828480

29 See Relevant Document 6 U


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of specified grade – All work upto plinth level- 1:5:10

2.01 (b)

Providing and laying in position cement concrete of specified grade – All wok upto plinth level- 1:2:4

Cum 111 756.56 582 4226.26

4400 2840464

3.02 (a)

Providing and laying in postion ready mixed concrete manufactured in fully automated batching plant- M-10

Cum 1820 4789.79 163 3800 1820 11285202

3.02 (c)

Providing and laying in postion ready mixed concrete manufactured in fully automated batching plant- M-30

Cum 435 3134.67 621 5452.66

5200 14038284

3.04 Reinforcement for RCC work including straightening, cutting, bending etc – Thermo mechanically treated bars

Kg 9920 202573.38 1942 50.32 48 9247362.20

3.05 Centring and shuttering including strutting, propping etc removal of form for suspended floors, roofs, landings, balconies and access platform

991 9308.31 839 234.34 300 2495193

4.01 Brick work with FPS bricks of class designation 75- Cement mortar 1:6

Cum 1860 9931.18 434 3016.05

3200 25827776


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6.01 12mm cement plaster of mix 1:6

Sqm 366 2901.99 693 98.05 100 253599

6.02 12mm cement plaster of mix 1:3 with a floating coat of neat cement

Sqm 4364 21903.32 402 147.06 150 2630898

7.04 (b)

Providing and laying 60 mm thick factory made cement concrete brick paver block of M30 Grade of size 300 X 150 X 60mm- In red colour

Sqm 1382 19189.25 1289 631.52 700 12465075

7.09 Providing and laying tack coat of residual petroleum bitumen

Sqm 12980 181006.41 1295 13.15 12 2016316.90

9.05 Supplying and packing of pea sized gravel of required gauge around the tube well assembly bith before and after development.

Cum 10 30.32 203 1764.03

2500 50800

TOTAL 9,37,35,642.10

It is evident from the Table 4 above, that contractor has executed quantities exceeding the

BOQ quantities varying from 163 % to 1942% higher. The additional cost impact of all these

items comes to 9.37 crore.

Box 5: ‘Windfall Gains’ for Contractors

HLC is of the view that contractors engaged by PWD, NDMC and MCD for undertaking streetscaping works in Delhi made ‘windfall gains’ in the CWG projects.

Taken together, the contractors received excess payment of over 16 crore in these projects. Poor quality of works, unduly high cost of certain items used extensively, limited expenditure on provisions related to worker facilities could have resulted in huge savings for the contractors.

It is estimated that the profits made by the contractors could be in excess of 33% of the total contracted amount for streetscaping works undertaken in the Capital in the run up to the CWG.


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Poor Quality 6.35 The quality of streetscaping work has been ‘shoddy’ and there were several

examples where with every burst of rainfall, the median verge would collapse under the

weight of the soil that was filled in. Instances abound where work done by one agency was dug

up by another a few days later. The pavements of Khan Market were dug up for a second

time because highly polished granite that was laid a few weeks ago was too slippery. Use of

costly granite on pavements defies logic.

A typical streetscaping work carried out in NDMC area

Box 6: Public perception of Streetscaping works

Despite spending over 300 crore on streetscaping works in the capital, the manner in which the entire work was undertaken by PWD, NDMC and MCD left the impression that it was more an exercise in money making than upgradation of city infrastructure. “The whole exercise is being transformed by unscrupulous entrepreneurs with political pull into a money spinning operation,” wrote The Hindu newspaper, quoted by Ved Mehta. “It has led to widespread hoarding and black-marketing of construction material, pushing up costs and, in the process, filling the pockets of the privileged few……”

Unfortunately, the probe by teams of HLC and their findings seems to confirm the public perception. Social audit of all streetscaping works may expose the real work done and the extent of corruption.

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Horticulture works

6.36 It has been estimated that about 13 crore was earmarked for hoticulture works in

streetscaping projects. HLC could not undertake detailed scrutiny of these works due to

paucity of time. However, it was noticed that these works, if undertaken as per the

provisions of the detailed estimates, were also completed in the ‘mad rush’ to somehow

complete the works before commencement of CWG, 2010. HLC is of the view that if

horticulture works are undertaken without proper soil preparation, coupled with poor

maintenance after plantation, then chances of the plants surviving the weather extremes of

Delhi greatly diminish. There are grounds to suspect that first, these works have not been

carried out to the extent provided for in the tender; second, contractors have supplied

plants at exhorbitant rates; third, corners have been cut in ‘maintenance of plants’ after

plantation; and, the objective of ‘green’ Delhi may not be achieved even after spending

huge amounts of money for the same.

Site Visit 6.37 The Team of HLC decided to undertake site visit and inspect a sample of

Streetscaping work undertaken by PWD in Delhi. This exercise was completed on 12th

March, 2011 in the presence of senior officers of PWD, Consultant and representative of the

contractor. Based on the site visit and inspection of works carried out in the vicinity of

Yamuna Sports Complex and CWG Village, the main observations are as under:

Main Observations 6.38 The variation of per kilometer cost of streetscaping between 0.80 crore to 12

crore was justified by Consultant Appointment Committee “to allow creativity of individual

consultants”. The consultants were given free hand in designing without referring to any

minimum standard of work/ design which could be common across the entire work. It was

claimed that as the situation of roads differed, there could not be any commonality. This

approach is incorrect and there was no governing authority to verify and standardize items

which could be common from structural design point of view – e.g. grades of concrete used

for similar works at various projects, paver blocks, length and width of foot paths and

drains, brick work and road work etc. Thus, on these grounds, very high estimates were

prepared by consultant and very high value contracts were awarded to the contractors.


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Rates paid to contractor for excavation work

113.17117.00 118.05 120.37

100.00

105.00

110.00

115.00

120.00

125.00

Around CWG Village@ 11.11% above

Around YSC @14.87% above

Around AftricaAvenue Marg @15.91% above

DU to ChhatrasalStadium @ 18.18%

aboveName of Project

Rate

per

cum

(In

Rs.)

6.39 Percentage rate contacts have been chosen for awarding streetscaping main work

contracts under PWD. The basis of awarding percentage rate contracts is not justifiable, as

the correct estimates of individual items can not be standardised and contractors are paid

different rates for the same items at different projects. M/s Satya Prakash and Brothers Pvt.

Ltd., bagged 4 out of 8 projects at 11.11%, 14.87%, 15.91% and 18.18% above the estimated

cost put to tender in streetscaping projects.

6.40 Rates of a sample item for different projects by the same contractor are shown in

the graph below to show the discrepancies in unit rates.

Comparison of different specifications used for pavement work in Streetscaping

6.41 Items listed in following table indicate that, different specifications were prepared by

consultants to carry out pavement works for PWD roads around Yamuna Sports complex

and CWG village.

Sample Item – Footpath pavement blocks

Yamuna Sports Complex – 14.87 % above NH- 24, CWG Village – 11.11% above

Items used Quantity in sq m

Rate / sq m (in )

Items used Avg Rate used for various pavement works

3 cm thk. Granite Stones Slab

4226 3441 30x15x6 cm CC payment block using M 40

445

101.85

DSR 2007


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Impact: Avoidable cost / savings – 2.34 Crores (5.5 times the other project)

6.42 Similar analysis can be performed for various other items (used only to enhance the

aesthetics of site and had no impact from structural design considerations), where different

specifications were provided by consultants. However, due to paucity of time, HLC could not

undertake this exercise.

Electrical works under Streetscaping:

6.43 Electrical works under steetscaping around Yamuna Sports Complex include section

feeder panels, decorative street poles, high mast and light fixers, seal safe optical

compartments, Aluminium reflectors etc. During the site visit by HLC it was observed that,

apart from regular works under “Street Lighting”, these works were carried out additionally

around Yamuna Sports Complex and were not required and can be treated as a ‘wasteful

expenditure’. Further, it was also observed that most of these decorative items were been

stolen and found missing from the site.

15x15x7.5 cm thk surface granite stone block

2647 1842

10x10x7.5 cm thk surface granite stone block

2647 2397

15x15x10 cm Haryana Quartzite stone block

2647 1153

Total 12167 Total Cost = 2. 88 Cr.

Total Expenditure of 12167 sqm @ Rs. 445 = 0.54 Cr

BOQ rate for SITC of decorative column with light fixture of specified make (including connectors, 50 mm GI piles, wirings, concrete coping with foundation bolts, radium strips and excavation and back filling for erection of poles) is 2,44,150/- per unit. Similarly BOQ rate for SITC of approval make Zebra crossing pole of over all height of 7.5 mtr. With fitting 150 W MH lamp, control gear is 83,150/- per unit.

The contractor has been paid 14.87% above the estimated cost put to tender at YSC.


117

Glimpse of electrical works under streetscaping around Yamuna Sports Complex

Some other photographs of streetscaping works

Most of these decorative fixtures have been found missing and stolen from these venues and department has no visibility and security on maintenance of such expensive items.


118

Display sheet of the ad-panel is missing at site.

6.44 Details of such electrical works executed under Street scaping for PWD:

# Projects under PWD Total Contract Value ( in Cr.)

Electrical Works ( in Cr.)

1. Around Yamuna Sports Complex

40.64 1.94

2. Around CWG village 34.62 0.16

3. DU to Chhatrasal Stadium 24.15 0.55

4. Kishan ghat road,east velodrum,north velodrum,ring road from rajghat to ITO flyover & I.G. slip road

18.39 6.4

5. Ring road bhairo marg to ITO flyover,I.P. marg and bhairon marg

31.54 3.91

6. Ring road from ashram to Bhairon Marg crossing

39.74 5.25

7. Africa Avenue Marge 25.26 NA

8. Around Karni Singh Shooting Range

24.42 NA

Total 238.76 18.21


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6.45 Summary of ‘extra cost’ incurred or ‘potential savings’ for street scaping works:

# Description of items Extra cost paid (

In Cr.)

Remarks

1. Consultancy works – Overpayment to consultants 5 Total payment made to consultants is approximately 10 Cr, which contributes 3% of over all expenditure on streescaping work. Normally the % of such consultancy should be around 1.5%

2. Excess quantities recorded in MB by MCD

(Refer Para 6.34)

10.19 9.37 Cr. in Thyagraja Sports Complex and 0.82 Cr. in Dr. Karni Sign Shooting range

3. Electrical works under street scaping over and above works executed under “Street Lighting” for PWD roads.

20 All such electrical items were executed over and above the regular street lighting works to enhance the aesthetics and can be considered as wasteful expenditure

4. Mismatch between various items (pavement blocks) by various consultants under PWD around YSC and CWG village – works executed with alternate specifications

2.34 Estimated on basis on comparing two alternate specifications used for pavement blocks under PWD

5. Over estimates prepared by consultants - Yamuna Sports Complex (Total project value 40.64 Cr.)

15 Total Expenditure for the project (including the expected expenditure) by this division = 30 cr. Subtracting the contingencies ( 4.5 cr.) from the actual expenditure comes out to 30 cr. – 4.5 cr. = 25.5 crore

Total 52.53 Net saving could have been achieved by proper planning, supervision, monitoring and standardization of common items.

Approximately 20 crore have been spent on electrical works under streetscaping for PWD Roads. No separate electrical works are carried out for MCD roads. NDMC , civil and electrical works contracts are awarded together.


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Othe Specific observations 6.46 Right in front of Yamuna Sports Complex, the footpath were broadened, even a plaza

has been made. While broadening the footpath the front of the footpath was removed and

used as back support but the space for plants was NOT filled with earth BUT fixed metallic

rectangular pots have been fixed at distances and plants have been put there as if in pots.

6.47 Near IIT crossing (Aurovindo Marg and Aurovindo Place) the side of the footpath has

been converted into trough BUT no earth filling has been done, the footpath’s side has

already given way as can be seen from the photographs below:

6.48 In front of Aurobindo Place, the footpath has not been completed and building

materials are still lying there. A Kiosk is also erected there (was told it was meant for

information booth but never used) which was earlier part of the street-scaping work to

executed by the contractors but was withdrawn and got erected by DTDC. These can be

seen in the photographs below:


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6.49 For these works payments were made giving undue benefits to contractors and the

Consultants. Streetscapping included in its budget funds (upto 12%) for horticulture work to

be done by the contactors as designed by the Consultants. In some places the plants put is

in very poor state of survival as con be seen below (Lodi Road):

6.50 Streetscaping in its project included street furniture and dustbins, the street

furniture was provided in the shape of benches but very little in number the dustbins can be

seen below as what shape and use they are:

6.51 It appears that a number of items that were included in the streetscaping works

were intended to hike the project cost (and thereby provide higher profits to contractors) as

almost all additional items were ‘non-schedule’ items where there was no standard market

rate available. This provided an opportunity to officials to manipulate the ‘justification rates’

and favour the contractors.


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Social Audit

6.52 It would be interesting if PWD, NDMC and MCD place details of all works done under

this head by all contractors along with costs in the public domain and request civil society

groups (maybe the Resident Welfare Associations) to conduct ‘social audit’. The outcome of

such social audit would be keenly awaited by all citizens of Delhi.

Box 7: Allegations vs Facts

HLC received complaints to the effect that GNCTD had awarded ‘lumpsum contract’ of 160 crore to M/s Satya Prakash & Sons for landscaping / streetscaping works. The scope of work was changed after award of work which allowed the contractor to charge exhorbitant rates. The work was also of substandard quality.

Upon enquiry, it has emerged that M/s Satya Prakash and Brothers Pvt. Ltd had bagged 54% of the contracts awarded by PWD worth 124.69 crore; these were lump sum contracts; scope of work was changed after award of work and the contractors did charge exhorbitant rates on grounds of these works being of ‘emergency’ nature.


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Chapter 7: Signage Introduction

7.1 In preparation for the Common Wealth Games 2010 it was decided by GNCTD

around February 2006 that the entire city of Delhi should have state-of-art signage with

appropriate structural system in tune with International Standards after a visit to Dubai by

Hon’ble Chief Minister. In this regard, efforts were made to identify agencies of

international repute. M/s 3M India Ltd. made a presentation before Hon’ble Chief Minister

in early 2006 and was directed to work out a ‘model’ of visual signage which could be

executed in Delhi.

Project Details

7.2 The project for installing ‘Retro Reflective Road Signage’ with state of art technology

on Delhi roads was undertaken by Public Works Department (PWD)- Delhi Government and

New Delhi Municipal Council (NDMC) for CWG, 2010. Project details in brief are mentioned

in Table 1.

Table 1

Agency Name

Project Name

Description Reference in rest of the report

NDMC 3 leaf project

Covering roundabouts in complete area under NDMC. The shape of signage resembles leaves

3Leaf

NDMC 28 Corridors

Phase 1 of the work which covered 28 main corridors (important roads) of NDMC area the work was further divided into three tenders.

Phase1-Work1, Phase1-Work2 and Phase1-Work3

NDMC Other than 28 corridors

Phase 2 of the work covered remaining corridors and this work was also further divided into three tenders

Phase2-Work1, Phase2-Work2 and Phase2-Work3

PWD Zone M1, M2 and M3

The complete work for Signage in PWD area was divided into three tenders under respective zones

Zone M1, Zone M2, and Zone M3,

Finance Details 7.3 The financial details of the Project undertaken in Delhi are in Table 2 below.


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Table 2

Particulars NDMC Date PWD Date

Preliminary Estimate

Total – 113.08 crore

TOTAL 262,570,900

Pilot Project 4,049,900

3Leaf 11,990,000

28 Corridor 118,721,000

Other than 28 Corridors 127,810,000

5-May-08

21-Aug-08

2-Dec-08

22-Dec-08

TOTAL 868,229,859


Zone M1 314,900,000

Zone M2 183,242,000

Zone M3 224,606,000

Feb-06

5-Jun-09

2-Jun-09

9-Jun-09

A/A & E/S


Total 262,570,900

Pilot project 4,049,900

3-Leaf 11,990,000

Phase 1 118,721,000

Phase 2 127,810,000

29-May-08

17-Dec-08

31-Dec-08

6-Feb-09

Total Rs 71.88 crore

Pilot Project .1.78 crore

Zone M1 30.88 crore

Zone M2 17.96 crore

Zone M3 21.26 crore

19-Sept-07

26-Aug-09

25-Aug-09

26-Aug-09

Detailed Estimate


Total - 234,215,500


3-Leaf Project 10,651,900

Phase1 103,158,000

Phase2 116,233,000

14-May-08

21-Nov-08

19-Jan-09

18-Feb-09

Total – 657,651,216


Zone M1 275,493,839

Zone M2 169,699,818

Zone M3 195,261,200

NA

29-Apr-09

1-Aug-09

25-Sep-09

NIT


Total - 227,719,076


3 Leaf Project 10,151,853

Phase1 100,487,136

Phase2 113,096,711

6-June-08

25-Nov-08

23-31 Jan’09

25 June to 6 Jul ’09

Total - 620,901,943


Zone M1 275,493,838

Zone M2 150,103,201

Zone M3 178,108,545

30-Nov-06

3-Aug-09

18-Aug-09

13-Aug-09

Contract Awarded Value

Pilot Project Krishan Murari Gupta & Sons 3,343,110

3Leaf Project Anil Engineering Works 6,493,053

Phase1-Work1 - CBM Industries Ltd. 35,891,604

Phase1-Work2 -Fiberfill Engineers 32,734,398

Phase1-Work3 - CBM Industries Ltd. 34,444,403

Phase2-Work1 -Fiberfill Engineers 30,148,235

7-Aug-08 13-Feb-09 29-May-09 29-May-09 29-May-09 30-Oct-09

Pilot Project- Work divided equally between the 2 parties at their individual quoted rates. Prakash Reflective Devices – 7,106,228 AND CBM Ind. Ltd - 7,252,020

Zone M1 – 3M/CBM/Bajaj for 250,117,289

Zone M2 - M/s Fiberfill Engineers & Anil Engineering Works (JV) for 128,640,705

Zone M3 - M/s Fiberfill

5-Aug-08

27-Oct-09

27-Oct-09


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Phase2-Work2 - Nippon Signage 26,937,187

Phase2-Work3 - M K Sign 28,731,614

30-Oct-09 30-Oct-09

Engineers 152,608,544

27-Oct-09

Project Duration Pilot Project - 3 months

3 Leaf Project – 4 months

Phase 1 & 2 all works – 6 months

Pilot Project - 3 months

Zone M-1, 2 & 3 – 6 months

Project Start Date Pilot Project

Revised/ Actual start date

3Leaf

Phase 1 all 3 works

Phase 2 all 3 works

17-Aug-08

8-Oct-08

23-Feb-09

22-Jun-09

09-Nov-09

Pilot Project

Zone M1

Zone M2

Zone M3

8-May-08

17-Nov-09

18-Nov-09

19-Nov-09

Stipulated Completion Date

Pilot Project As per contract

Revised completion date

3Leaf

Phase 1 all 3 works

Phase 2 all 3 works

16-Nov-08

7-Jan-09

22-Jun-09

21-Dec-09

8-May-10

Pilot Project

Zone M1

Zone M2

Zone M3

5-Aug-08

16-May-10

17-May-10

18-May-10

Actual Completion date

Pilot Project Completion certificate had been issued.

3 Leaf Project

Phase 1 Work 1

Phase 1 Work 2

Phase 1 Work 3

Phase 2 Work 1, 2 and 3

30-Jan-09

03-Oct-09

25-Aug-10

29-Aug-10

27-Aug-10

WIP

Pilot Project Completion certificate had been issued

Zone M1 – Completion certificate issued

Zone M2 and Zone M3 -

28-Dec-08 3-Oct-10 WIP

Billing done so far

Pilot Project - Final bill had been settled. Total payment 4,119,877

3Leaf Project 8,351,030

Phase1-Work1 28,825,441

Phase1-Work2 24,471,037

Phase1-Work3 30,432,757

Phase2-Work1 17,820,267

Phase2-Work2 12,379,227

Phase2-Work3 16,103,111

5-June-09

08-Jan-10

24-May-10

18-Feb-10

4-May-10

03-Dec-10

23-Nov-10

23-Aug-10

Pilot Project

Zone M1 – 122,883,839

Zone M2 – 81,715,692

Zone M3 – 106,699,667

02-Feb-11

25-Oct-10

03-Feb-11

Pilot projects 7.4 A decision was taken by GNCTD to undertake a pilot project first.


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PWD- Delhi Government

7.5 Accordingly, a proposal was submitted for undertaking pilot project for 1.78 crore

(496 boards) by the then Chief Engineer, PWD Zone IV for which A/A & E/S was sanctioned

on 19th September, 2007. The cost of pilot project was roughly 3 times (using Type XI sheet)

compared to the cost of existing structure using Type-IV grade sheeting with tubular

structure on Delhi PWD roads. No American Society for Testing of Materials (ASTM)

Standards is available for Type-XI sheeting.

7.6 The high cost of this proposed design was justified citing the following advantages -

• Support structure being made up of single tube of powder quoted surface as

against tubular 3 pole structure

• Signage panels are made of aluminium composite sheeting with minimum

resale value

• More than twice as reflective and a warranty for 10 years, full cube Micro

Prismatic technology.

• No black spots, no rust marks, no cracking of sheet.

7.7 The two qualified parties, i.e M/s CBM (authorized converter for 3M) and M/s PRD

(authorized converter for Avery Dennison) made presentations on 5th February, 2007 before

Board of Assessors (BOA) and were directed to install their product samples for inspection

before a final decision was taken. E-In-C proposed on 13th August, 2007 to divide the work

equally between both ‘world leaders’ in the field so that they show their best during the

assessment of GNCTD. CRRI was proposed to be engaged as ‘third party quality assurance

manager’ with directions to come up with definite recommendations which could be

incorporated in the tender documents to be issued subsequently.

7.8 Based on the aforesaid recommendation, the work for pilot project was equally

divided and awarded to both agencies, i.e CBM and PRD on 4th December, 2007. The work

was to be completed in 3 months. It, however, was actually completed on 28th December,

2008.

7.9 It may be noted that M/s 3M and M/s Avery Dennison are the only two

manufacturers worldwide for proposed Type XI retro-reflective sheeting.


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NDMC

7.10 NDMC also carried out a pilot project using Type IX sheet, stainless steel

structure. A/A & E/S was sanctioned for 40.5 lakh (171 boards) on 29th May, 2008.

Presentation had earlier been made to Hon’ble CM on 14th January, 2008 on proposed road

signage in NDMC area and the ‘conceptual plan’ for pilot project. Hon’ble CM approved the

proposed plan after seeing a presentation in presence of Chairman, Secretary and other

senior officers of NDMC.

7.11 The system consists of stainless steel with aluminum composite material sheet of

2/3 mm thick and retro reflective micro prismatic Type IX sheet conforming to ASTM

standards & Ministry of Road Transport and Highways (MORTH) parameters with 7 years

warranty. The agenda, as approved by Chairman, was presented before Council on 13th

February, 2008 and the proposal was duly approved. Design was to be obtained from IIT

Delhi. Reason stated for use of Type IX sheeting was that ‘this is latest sheeting being

adopted world over and very useful during night, foggy weather and requires less

maintenance’.

7.12 The work was awarded to M/s Krishan Murari Gupta & Sons (authorized converter of

3M).

7.13 As per directions of Hon’ble Lt. Governor on 7th July, 2008, a copy of proposed

signage was submitted to Commissioner Policy (Planning) (UTTIPEC) DDA on 17th July, 2008

for consideration regarding uniform signage on Delhi roads. The Commissioner informed

that UTTIPEC is still to be constituted and the process will take some time. However,

Chairman, NDMC gave the approval to start the work on 25th July, 2008 on the ground that

it was just a ‘pilot project’ and, if required, rectifications can be done later.

Box 1: Pilot Projects – an exercise in futility

Pilot projects undertaken by PWD & NDMC in the wake of instructions issued by CM, Delhi after her visit to Dubai in 2006 were a futile exercise. It was decided to use Type XI sheets (which are not even approved by ASTM) when even Type IX sheets had not been approved by IRC at that stage. Further, in the main project, the Agencies reverted to use of Type IX sheet. Thus, expenditure of 41.20 lakh by NDMC and 1.43 crore by PWD was wasteful, infructuous and only benefitted the two manufacturers and the contractors.


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Main projects

PWD- Delhi Government

7.14 On 12th December, 2008 Chief Engineer, PWD raised the point that there was no

ASTM standard approved for Type XI sheet which was used in the pilot project. Therefore,

this sheet could not be used for main project and proposed to use Type IX sheet on lines of

NDMC. Except for sheeting, the rest of the work was decided to be done as per the

specifications of sample work executed by M/s CBM during the pilot project. On 12th

January, 2009, Joint Secretary and Deputy Secretary, PWD asked for justification for use of

Type IX sheet. In response, the E-In-C wrote on 12th February, 2009 that ”Type IX sheet are

the best available in terms of reflectivity and also having ASTM standard specifications. The

same had been shown in the presentations made before Hon’ble Chief Minister and LG

(UTTIPEC) on 4th February, 2009’. The decision to use Type IX sheet was finally taken by the

Hon'ble Chief Minister on 16th March, 200930

7.15 In PWD work was carried out in 3 packages by three different divisions

simultaneously. A/A & E/S was sanctioned on 25th August, 2009 for

.

30.88 crore – 4450

boards, 17.96 crore- 1324 boards and 21.26 Crore- 2305 boards.

NDMC

7.16 While approving the estimate for pilot project of NDMC, on 9th May, 2008 Finance

department asked for preparation of Detailed Project Report (DPR) for entire Signage work,

as the project involved major expenditure, in consultation with IIT Delhi (as IIT was

proposed to be engaged for designing the proposed signage). The Department was also

asked to indicate the alternatives available in the market vis-à-vis cost involved and level of

maintenance etc.

7.17 Time allowed for completion was 4 months. Later on IIT Delhi backed out and the

design was finalized in-house. It was mentioned in the report that ‘Material proposed to be

used for the project is the best quality available and at par with the material used worldwide

and cost savings can be there in the project in long term even though the cost is high initially

due to proposed use of maintenance-free components, which are durable and long lasting’

30 See Relevant Document 7A


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7.18 In NDMC, the work for installation of Signage was carried out in a phased manner

as shown in Table 3 below. Approval to carry out work of Phase 1 and 2 in 3 packages each

of 4 crore was also accorded along with respective A/A&E/S as well as sanction to have

different agencies working simultaneously due to limited time available before

commencement of Games and to have better competition as agencies for larger packages

are very limited.

Table 3

S.No. Project Name PE No. of boards proposed

Date of sanction

Completion status

1 3 Leaf project 1.20 crore 171 boards 17-Dec-08 Complete

2 28 corridors 11.87 crore 2933 boards 31-Dec-08 Complete

3 Other than 28 corridors

12.78 crore 3211 boards 6-Feb-09 Work in Progress

The Overview of pilot project is given in Annexure 7 A and of entire project in Annexure 7B.

Summary of Findings

7.19 Based on the review of files and documents available for providing and installation of

Signage in Delhi by PWD (Govt. of Delhi) and NDMC following are the major findings:

What constitutes state of the art signage?

7.20 The main agenda was that entire city of Delhi should have state-of-art signage to

upgrade the city signage to international standards. However, definition of the so called

‘State-of-the-art signage’ was not found, and none of the proposal talked about it. Further,

no efforts were made to standardize the specifications, design etc. to give an aesthetically

pleasing effect to the city.

7.21 Additionally, there was no justified reason for complete replacement of the existing

Type IV signage simply because a better product was available in market. Only the additional

or supplementary signage should have been installed. In any case, the objective of

uniformity in signage throughout the city has not been achieved.


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Pilot Project – a failure

7.22 Pilot project carried out by PWD by spending 1.78 crore was not utilized for

standardization of design and specifications etc. It was, thus, a sheer waste of valuable

resources. 3 years were wasted in the process of carrying out the pilot project which

delayed the execution of main project which had considerable cost impact. So the entire

purpose of carrying out a pilot project was defeated and it ended up as a futile exercise.

Competition was restricted

7.23 PWD and NDMC had already obtained the list of Authorised Converters from the

manufacturers. Thereafter there was no need to ask the bidders to get fresh authorization

from the manufacturers. This was aimed to restrict the bidders, which was a deliberate

attempt to defeat competition and favour a few chosen ones.

7.24 The cost of RR Sheet component in the entire signage package was below 25%. Still

the bids were invited from authorized converters of signage manufactures instead of

erection contractors, who could have got the sheets directly from the manufacturers.

7.25 Method adopted by PWD and NDMC were different, and it was observed that the

method adopted by NDMC was faulty and, in due course of time, the substantial investment

may go waste.

# Findings and observations

1 Competition restricted between authorized converters two manufacturers in the world

1.1 It would have been prudent for PWD and NDMC to obtain supply of the RR sheets directly from the only two manufacturers and then issue the same at the cost to the general contractors for providing signages.

1.2 Initial high cost was justified on the ground that it would be economical in the long run as it requires virtually no maintenance and has warranty of 7 years’. However, as observed the installed signage have already started getting worn out and damaged.

1.3 Worldwide there are only two manufacturers for Type IX sheeting installed by PWD and NDMC i.e Avery Dennison and 3M. Both the agencies made the involvement and discretion of the two manufacturers mandatory by putting irregular terms in NIT.

2 No guidelines prepared/ issued for Standardization of Signage for entire


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city of Delhi by road owning agencies

2.1 It was desired to have state-of-art signage of International standards in entire Delhi city. However, definition of the so called “State-of-the-art” signage was not found

2.2 All agencies wasted time and effort in finalization of design, drawings etc.

2.3 Designs not finalized even after executing pilot projects

2.4 Different technique used by PWD and NDMC for preparation of Sign Boards.

3 Anomalies in NIT

3.1 NDMC NIT clause 7A – current date certificate stating that bidder is authorized converter

3.2 NDMC disallowed contractors with joint venture.

3.3 PWD NIT clause 2.2 and 2.3 – MOU with manufacturer of RR sheet

3.4 PWD NIT had inherent contradictory condition like ‘facilitated exit route’

3.5 PWD NIT had condition for not awarding of more than works to same party and non opening of Tenders.

3.6 Meaning of word ‘Road Signage explained differently in pre-bid meeting.

4 Lack of competition and Collusion between Manufacturers and Agency officers.

4.1 Restricting the competition

4.2 Work divided into very small parts in NDMC

4.3 Both the manufacturers got almost equal work awarded

4.4 Excess payment of 7.45 crore in case of NDMC

4.5 No reasoning for deciding the sequence for opening of financial bids in PWD

5 Observations w.r.t preparation of estimates, justification statement and award of work

6 Delays in design finalization and execution of work

7 Other observations

7.1 Before the main project was taken up, a pilot project was taken up by both NDMC and PWD. HLC was informed that, in case of PWD project, when the main project was started, the signage put up during the pilot project was replaced by the new signage. Thus, the entire expenditure of 1.43 crore on the pilot project was wasted.

7.2 Standards set by Indian Roads Congress were ignored.


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Observations

Competition restricted between two manufacturers

7.26 After it became known that the Type IX RR sheets are manufactured only by two

manufacturers in the world it would have been more prudent for PWD and NDMC to obtain

supply of these sheets directly from them. Thereafter tenders would have been called from

general construction contractors for erection of the support systems etc for Signage with

the imported reflective sheets being provided by NDMC and PWD to them on payment of

cost for their use in the Signage. This system would have resulted in much better

competition among construction contractors and there would also have been control on the

quality of the sheets used and substantial saving in overall cost as well.

7.27 NDMC carried out pilot project in May’08 using Type IX RR sheeting. This sheet forms

almost 27%- 30% of the total cost of the project. While submitting the estimate for

expenditure sanction it was stated that ‘the expected life of proposed road signage is

minimum 7 years and virtually maintenance free and are as per international standards

made up of stainless steel and grade IX RR sheeting which have a long life as compared to

old signage made up of MS and Type IV RR sheeting. Further the warranted life of proposed

sheeting being 7 years. In cost benefit analysis of the Project report it was mentioned that

‘though the initial cost of new signage is high even than it is cost effective as it would be

economical in the long run as it requires virtually no maintenance and have warranty of 7

years’.

7.28 However as observed the installed signage have already started getting worn out

and damaged w.r.t sheeting, letters pasted, RR sheet pasted over ACM sheet. Below are

some actual photographs showing how these high cost sign boards actually do not have any

of the benefits claimed in justifying the high cost of it.-


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Worldwide there are only two manufacturers for Type IX sheeting installed by PWD and

NDMC i.e Avery Dennison and 3M. These manufacturers enter into ‘converter agreement’

usually valid for one year (extendable on mutual agreement) to make these contractors

their authorized converters. However, for other types of sheeting under ASTM standards

there are more manufacturers worldwide.

7.29 Also, both the agencies i.e PWD and NDMC put certain conditions in the NIT which

have made the involvement and discretion of the two manufacturers mandatory. NIT

conditions being referred to are-

• NDMC – A current dated authorization certificate from sheeting

manufacturer or its Indian subsidiary stating that contractor is authorized

convertor.

• PWD – 1) In case the firm/ any partner of JV is not the manufacturer of RR

ASTM Type IX sheet or their Indian subsidiary they shall be required to have


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an MOU with the manufacturer or the Indian subsidiary 2) Tenderer shall

submit an undertaking that their authorized converter has all the necessary

equipment, staff and resources, in case tenderer is sheet manufacturer else

jointly by manufacturer and the tenderer.

No guidelines prepared/ issued for Standardization of Signage for entire city of Delhi to be followed by all road owning agencies

7.30 After Hon’ble Chief Minister’s visit to Dubai she desired that entire city of Delhi

should have state-of-art signage of International standards in tune with what has been done

in Dubai and suggested that Hon’ble Minister PWD, Principal Secretary PWD and E-in-C PWD

should make a visit to appreciate the systems provided there so that an appropriate signage

system could be developed in Delhi31

7.31 The main purpose of proposal for improvement of Signage system was to upgrade

the city signage to international standards. However, no effort was made to standardize and

issue common specifications and guidelines for the various civic agencies viz. PWD, MCD

and NDMC so that the process could be streamlined. All the agencies wasted time and effort

in finalization of specifications, design and drawings for installation of signage in their

respective areas.

. However, no report on the foreign visit if undertaken

was found in the files. Also the definition of the so called “State-of-the-art” signages were

not found, no satisfactory answers were given when enquired as to what is meant by “State-

of-the-art” signages.

7.32 The proposal for replacement of existing signage came in 2006 after Hon’ble CM’s

visit to Dubai. Expenditure sanction for pilot project of PWD was given in Sept’07, and the

stipulated period of completion was 3 months. However, the work was actually completed

on 28th December, 2008, even after award of this work to 2 agencies. In case of NDMC too a

pilot project was carried out for which expenditure sanction was given in May’08 and

stipulated completion date was within 3 months. However, the work was actually

completed on 30th January, 2009.

7.33 Even after execution of pilot projects by both the agencies there were delays in

completion of main projects because of non finalization of designs and drawings in time. 31 See Relevant Document 7 B


135

Moreover, in PWD pilot project costly Type XI RR sheets were used. However no ASTM or

MORTH standards are available for this type of sheeting and, therefore, the next best

available Type IX RR sheeting was selected for which ASTM and MORTH standards are

available.

7.34 Table 3 shows difference in method followed for preparation of sign boards by

NDMC and PWD –

Table 3

NDMC PWD

On the ACM sheet fully covered (both front and

back if required) with RR Sheet (base sheeting)

- Cut out letters, arrows etc. of same RR sheet

were pasted by pressure sensitive adhesive

backing.

Impact: Cut-out Letters and Symbols are

directly applied to the sign face.

On the ACM sheet fully covered (both front and

back if required) with RR Sheet (base sheeting)-

RR Electo cut overlay sheeting of same type were

pasted by pressure sensitive adhesive backing.

Impact: white base sheet was taken then the

overlay film in the appropriate color was cut to

remove the sections where the white was to

show through. This overlay film was then applied

onto the sign face.

7.35 The cut out letters pasted over RR sheet by NDMC have come off in flakes or thin

small pieces in just few months of their installation. Below are the few sample pictures of

the installed signage:


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7.36 These high cost sign boards were supposed to have many advantages like warranty

against any wear and tear for seven years etc. in respect of sheeting used. But these have

not lasted even a year!

7.37 However due to a different method followed by PWD the above problem did not

arise in respect of PWD signage. Following are sample pictures of installed signage:

From the above it is evident that the method adopted by NDMC was faulty and in due

course of time the substantial investment may go waste.


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Anomalies in Notice Inviting Tender

7.38 The eligibility requirement as per Clause 7(a) of NDMC NIT– ‘A current dated

authorization certificate issued by the Micro prismatic type IX RR sheeting manufacturer

stating that the contractor is authorized converter. Certificate issued by distributor, dealer,

power of attorney holder shall be invalid’ was unnecessary and promoted cartelization. The

department even had the complete list of authorized converters in India of the two

manufacturers duly certified by them.

7.39 The department should have asked manufacturers directly for a listing of their

current (to be valid on date of NIT) authorized converters instead of these contractors

asking for a current date authorization certificate from the manufacturers as per NIT. As a

result of this the manufacturers certified their selected few which resulted in restrictive

bidding. They could sell their products at Astronomical Prices and issuing authorisation to

one who purchases at the maximum cost. Giving an unwarranted privilege to the two

manufacturers is completely unethical behavior bordering on complicity.

7.40 NDMC technical bid committee meeting for Phase 1 work was held under the

chairmanship of CE(C) on 30th March, 2009 which rejected Bajaj Electricals Ltd. amongst

others because he had not attached documents required under clause 7A, 7B, and 7C.

However for the work of Phase 2 (package 1) they produced authorization certificate from

M/s 3M dated 15th July, 2009 and therefore got qualified to bid for this work in the

committee meeting held on 22nd July, 2009. It is questionable that why the party was not

given authorization for the work 4 months before.

7.41 It is pertinent to mention at this stage that while the eligibility criteria of the party

being an authorized converter was not unreasonable, the requirement to produce a ‘current

date authorization certificate’ was highly unnecessary and unreasonable.

7.42 The cost of RR Sheet component in the entire signage package was below 25%, and

the other costs comprising of Steel and Civil work, which were 75% of the total cost to be

carried out by the civil contractors. This feature was ignored in the NIT. As per clause 23 in

Phase1 NIT and Clause 22 in Phase2 NIT of NDMC - ‘The contractors with joint venture are


138

not allowed‘. By not allowing JVs and consortiums the general construction contractors have

been restricted and only Authorised Converters themselves could bid.

7.43 Similarly, PWD had inserted an eligibility criteria clause 2.2 and 2.3 ‘In case the

firm/any partner of JV is not the manufacturer of RR ASTM Type IX sheet or their Indian

subsidiary they shall be required to have an MoU with manufacturer of RR ASTM Type IX

Sheet or their Indian subsidiary’ and in case of consortium ‘the Manufacturer of RR ASTM

Type IX sheet or their Indian subsidiary as one essential member)’.

7.44 Further as per clause 2.7 of Qualification criteria -

‘The tenderer shall furnish a copy of certificates issued by the manufacturer of RR Sheet

Type IX as per ASTM D 4956 -07 certifying accreditation of their Indian Subsidiary as per

Appendix IV’

‘The tenderer shall submit an undertaking that their authorized converter (Name of the

Converter) has all the necessary equipments, technical staff and other resources to

complete the job to prescribed standards and on time.’

Through insertion of aforesaid clauses, direct involvement of the only two manufacturers of

the Type IX sheeting, was made mandatory.

7.45 NIT had inherent contradictory provisions. As per clause 2.2 and 2.3 of eligibility

criteria ‘In case of consortium, there shall be not more than four constituent members and

Manufacturer of Retro Reflective ASTM Type IX sheet or their Indian subsidiary being one

essential member’ and ‘In case the firm/any partner of JV is not the manufacturer of RR

ASTM Type IX sheet or their Indian subsidiary they shall be required to have an MoU with

manufacturer of RR ASTM Type IX Sheet or their Indian subsidiary’. However, clause 3.6 and

clause 4.6 facilitates exit route for JV partner. Clause 3.6 ‘In case of withdrawal of any

partner from the JV, the existing partner shall be stepping into the shoes of the leaving

partner of the JV with all the liabilities getting vested in the existing partner’ and Clause 4.6

‘In case of withdrawal of any member from the consortium, the existing members shall be

stepping into the shoes of the leaving partner of the consortium with all the liabilities

getting vested in the existing members’.


139

7.46 This prompts forming of JVs or Consortiums just for the sake of participating in the

tender so that by using the credentials, the JV as a tenderer can be technically qualified. In

the pre-bid meeting, 3M-Bajaj-CBM consortium also raised the above issue and demanded

that the clauses should be amended but the request was dropped and the clauses were not

removed.

7.47 PWD issued three tenders for award of work in three separate packages with a

condition for restriction on award of more than 2 works to one party. As per clause 11 ‘apart

from the mentioned road signage work, there are two more packages of similar works in

Delhi PWD for which tenders are being called separately. It is for the information of all

concerned that out of the said three packages of road signage works, not more than two

packages shall be awarded to any single tenderer supported by the same sheet

manufacturer or subsidiary either as member of consortium or as an associate of JV or

individual firm by way of MOU’

7.48 The sequence for opening of tenders as per NIT was M2-M3-M1. In NIT for Zone M1

it was mentioned that ‘financial bids shall be opened after financial bids for the other two

packages under Zone M2 and M3 has been opened. And if any of the tenderers happens to

be lowest in both these packages; their financial bids will not be opened’. In NIT for Zone

M3 it was mentioned that financial bids shall be opened after financial bids for the other

package under Zone M-2 has been opened. So the condition can get triggered only in case

of Zone M1. Table 4 below shows the details for contract values and award of work under 3

zones.

Table 4

Division PWD Zone M2 – 12.9 crore

PWD Zone M3 – 15.3 crore

PWD Zone M1 – 25 crore

Parties who were qualified for opening of Technical bids

1. M/s Fiberfill Engineers & Anil Engineering Works JV (Avery Denison) (14.03% below EC)

2. M/s 3M Bajaj CBM consortium (3.73% above EC)

1. M/s Fiberfill Engineers (Avery Denison) (14.32% below EC)

2. M/s 3M + Bajaj +CBM + Nippon Signage Consortium (2.62% above EC)

1. M/s 3M + Bajaj + CBM Ind. Consortium (8.03% above EC, after negotiation bought down to 9.21% below EC)


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Contractor AD, Fiberfill + Anil Engg AD, Fiberfill 3M, 3M-CBM-Bajaj

Date of NIT

18-Aug-09 13-Aug-09 3-Aug-09

Bid submission date

1-Sept-09 30-Sept-09 31-Aug-09

Financial bids opened on

29-Sept-09 30-Sept-09 30-Sept-09

7.49 For tender of Zone M1 only one party qualified for opening of financial bids still PWD

went ahead with award of work to the party on the plea that since work for Zone M2 and

M3 have already been awarded to Avery Denison and there are only two manufacturers

who satisfy the eligibility criteria so in any case 3M has to be awarded the work for zone M1

due to restriction on award of more than 2 works to same party as per NIT. In the meeting

of the WAB held on 25th October, 2009, CE M-1 explained that, ‘The work is relating to CWG

and is time bound. In view of the conscious decision taken while framing the NIT condition

that not more than two works are to be awarded to agency/s associated with sheet

manufacturer, this work can be awarded only to the agency getting associated with sheet

manufacturer M/s 3M. Accordingly, there is no possibility of rejecting and re-calling this

tender as there are only two retro-reflective Type-IX sheet manufacturers and the other

manufacturer (Avery Dennison) has already been awarded the works under Zone M-2 & M-

3. So, Chief Engineer recommended the award of work to the single bid of M/s 3M Bajaj

CBM consortium’. However, PWD should have further negotiated the rates so as to bring

them at par with other tenders.

7.50 The sequence for opening of tenders was irrational and without any basis and it is

not understandable as to on why the tender for M1 was decided to be opened in the end.

Also the NIT for Zone M1 was issued first. Instead tenders for all 3 packages should have

been opened simultaneously and then if the same party which was L-1 for other packages

becomes lowest for last package also then other bidder should have been invited to carry

out the work at the L-1 party rates. The variation in rates highlights the loss incurred due to

unreasonable terms of NIT. Also it is not possible to comment on the concealed loss. The


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manipulation is apparent from the fact that M/s Fiberfill did not bid for M1- 25 crore while

they got both the other tenders for M2 and M3 – 28 crore. Thus, both the manufacturers

were able to share the work equally. If the lowest quoted rates are taken for calculating

tender amount for all three packages the department could have saved 3.44 crore. Refer

Annexure 7C for details. This shows that NIT was not drafted in a transparent manner.

7.51 Further, the condition of NIT w.r.t non opening of tender submitted was not

financially prudent. This condition promotes cartelization amongst the only two possible

bidders. The system thus adopted created a position of disqualification for other work

without opening of the bids.

7.52 In the pre-bid meeting held on 13th August, 2009, 3M Bajaj CBM consortium asked

the meaning of word ‘Road Signage’ in reply for which it was mentioned that ‘Road Signage

broadly means informatory/cautionary/mandatory signboards put up along or across the

roads as per IRC guidelines. This does not include identification signboards put up for petrol

pumps, individual buildings/ structures and advertisements’. However a corrigendum was

issued on 31st August, 2009 stating the meaning of term road signage as ‘Road signage

broadly means informatory/cautionary/mandatory signboards put up along or across the

roads as per IRC guidelines’. There is difference between the two definitions w.r.t coverage

of work executed to qualify for the tender. M/s Fiberfill Engineers who has been awarded

work for Zone M3 has work experience only in installation of signage for petrol pumps and

construction work as observed form the documents submitted.

7.53 Thus, if the same corrigendum would have been issued as explained in pre-bid

meeting the contractor M/s Fiberfill Engineers would not have become eligible to bid.

Box 2: Works awarded to ‘tainted’ parties

Documents seen by HLC reveal that contracts have been awarded to parties against whom CBI had already filled cases (FIR no. 6 and 9 of 2009 against CBM Industries) for investigation regarding collusion with department officials and putting conditions in NIT favoring these contractors and siphoning off government funds.


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7.54 For pilot project of PWD, first NIT was issued on 20th September, 2006 and

subsequently a corrigendum was issued to cancel it. Thereafter a short press notice was

published on 30th November, 2006. The last date of sale of documents, date of receipt and

opening of bids were 16th December, 2006 and 27th December, 2006 respectively. Financial

bids were opened on 12th November, 2007 and the work was awarded equally to both the

parties i.e M/s Prakash Reflectives and M/s CBM Industries on 5th August, 2008 at their

respective quoted rates.

7.55 This delay is highly abnormal looking at the fact that pilot project was supposed to

get completed in 3 months duration.

Lack of competition

7.56 PWD and NDMC had already obtained the list of 25 Authorised Converters from both

the manufacturers (i.e., 3M India Ltd and Avery Denison) dated 08.07.2009. These letters

are attached in Annexure 7D. Thereafter, there was no need to ask the bidders to get fresh

authorization from the manufacturers. This was aimed to restrict the bidders, which was a

deliberate attempt to defeat competition and favour a few chosen ones.

7.57 The total work of 19.5 crore (other than pilot project) in NDMC was divided into 7

tenders of approx. average contract value of 3-5 crore each on grounds of there being few

agencies for larger packages and the fact that formation of JV or consortium was not

permitted. Although for similar work, PWD issued 3 tenders for approx. average value of

15-20 crore per tender and allowed formation of JV or consortiums.

Box 3: Signage is set up in Pilot Project only to be replaced in main project

HLC was surprised to learn that signage set up as part of the Pilot project at an estimated cost of 1.43 crore by PWD was replaced when the main project commenced. Lt has already been shown that use of Type XI sheet in the Pilot project was totally unnecessary as at that stage even Type IX sheet had not been approved by the Indian Roads Congress. The decision to replace the same in the main project is nothing but a ‘criminal waste’ of public funds. Responsibility must be fixed for this lapse and money recovered from the concerned officers.


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7.58 There are only two manufacturers for the specific Type IX RR sheeting conforming to

ASTM standards viz. 3M and Avery Denison (AD). This fact has promoted cartelization. Table

5 below shows the details of works awarded by the two Agencies – NDMC and PWD. Both

the manufacturers have got equal share of the Signage work- M/s 3M 37.59 crore and M/s

Avery Dennison 39.93 crore.

Table 5

Agency and Tender name

Contractor Authorised Converter

Contract Value

Date for award of

work

NDMC – 3Leaf Anil Engineering Works AD 6.49 crore 13-Feb-09

Phase1-Work1 CBM Industries Ltd. 3M 3.59 crore 29-May-09

Phase1-Work2 Fiberfill Engineers AD 2.27 crore 29-May-09

Phase1-Work3 CBM Industries Ltd. 3M 3.44 crore 29-May-09

Phase2-Work1 Fiberfill Engineers AD 3.01 crore 30-Oct-09

Phase2-Work2 Nippon Signage 3M 2.69 crore 30-Oct-09

Phase2-Work2 M K Sign 3M 2.87 crore 30-Oct-09

PWD M1 3M/CBM/Bajaj Consortium 3M 25 crore 27-Oct-09

PWD M2 Fiberfill Engineers/Anil Engg JV

AD 12.86 crore 27-Oct-09

PWD M3 Fiberfill Engineers AD 15.3 crore 27-Oct-09

AD Total 39.93 crores 3M Total 37.59 crore

7.59 In case of NDMC there are seven parties who have competed for the award of

work for seven tenders and work have been awarded to five out of these seven bidders. If

the lowest quoted rates are taken for calculating tender amount for all seven packages,

there is an impact of 7.45 crore. Refer Annexure 7E for details. Cartelization of the

contractors get further highlighted by the fact that by qualifying 2 new bidders for Phase2

work viz. Bajaj and MK Signs, who were rejected in Phase 1 work for non submission of

authorized converter certificate under clause 7A, the rates of other contractors, Fiberfill and

Nippon has come down by 40% for same work. Refer Annexure 7E.


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Preparation of estimates, Justification statement and Award of Work

7.60 For pilot project of PWD, short press notice was published on 30th November,

2006. Three agencies submitted the tenders on 27th December, 2006, out of which two were

technically qualified viz. Prakash Reflectives and CBM Industries. On 10th August, 2007 PWD

E-in-C advised to divide the pilot project work into two equal portions while awarding the

work. However, the scope of work was reduced i.e the estimated cost was revised in terms

of quantities of items to be executed and revised schedule of quantities was prepared by

dividing the work equally between the two contractors. The new estimated cost was 26.6

lakh (15%) lower than the original estimated cost (Refer Annexure 7Ffor details). But NIT

was not recalled even when the scope of work got modified. The work was awarded equally

to both the parties on 5th August, 2008 at their respective quoted rates. Loss incurred on

account of division of work was 2.5 lakh. See Annexure 7F for details.

7.61 No deduction has been made for old signage in NDMC. As informed old signage

are in custody of NDMC and will be auctioned by the department itself. Therefore, its cost

has not been considered in the process of award and execution of work.

7.62 As per condition no 11.2. in NIT for pilot project of PWD, ‘7 years warranty from

contractor/ manufacturer of RR sheeting for satisfactory field performance of sheeting and

its conforming to ASTM standards‘ have to be submitted in shape of bank guarantee for an

amount of 25% of contract value which is 17.8 lakh. Thus, the provision of NIT was violated

by accepting only 5 lakh from M/s Prakash Reflective Devises.

7.63 Pilot project of PWD was done using Type XI sheet. But the same was disqualified

from use in main project still the preliminary estimates for all three packages M1, M2 and

M3 were prepared using rates of Type XI sheet.

Delays in design finalization and execution of work

PWD Delhi Government - In PWD design not yet finalized even after 3 years and the work is largely still in progress.

7.64 In the proposal submitted for pilot project of PWD, it was recommended by the E-

In-C that M/s 3M and M/s Avery Denison have been preferred in comparison to others as

these parties are manufacturers of ‘diamond grade’ sheets (being used world-wide) and

‘omni view’ sheets respectively which are a step ahead of Type IX sheets which have been


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evaluated & codified in ASTM standards (American Society for Testing of Materials). Thus,

for pilot project Type-XI sheets were used (A/A&E/S granted on 19th September, 2007).

However, after execution of work on 12th December, 2008, CE informed that since Type XI

does not have any approved standard specifications under ASTM standards, it cannot be

used for the main work. Moreover, this defeats the entire purpose of carrying out a pilot

project as sample work was awarded to above parties so that the design developed by them

could be used for calling future tenders.

7.65 Pilot project conducted by PWD was a complete waste of both time and effort.

The process was initiated in Feb’06 but concept finalization, floating of tender and award of

work was delayed. Further, even after award of work in Dec’07, the date of start was 8th

May, 2008 and work was to be completed in 3 months. After division of work equally

between two contractors, the project should have been completed in much less than 3

months. However, the project was completed on 28th December, 2008. In a nutshell the

pilot project took almost 3 years which highlights carelessness. The whole purpose of pilot

project was defeated due to delayed decisions of the management and incompetence of the

contractors to complete the work in stipulated 3 months therby adversely impacting the

cost of main projects. Moreover, the sheeting used was disqualified for use in main projects.

7.66 The Department again took time to finalize the design while conducting main

projects even after spending ample time in undertaking the pilot project. Preliminary

estimates for 3 packages of main project were prepared in June’09 and work was awarded

on 27th October, 2009 with scheduled completion in 6 months (stipulated date of

completion 16th-18th May’10). However, work for zone M1 was completed on 3rd October,

2010 and, in the remaining two zones, the work is still in progress. The main reason for

delay in completion being non finalization of designs, specifications and drawings by the

Department.

7.67 In case of zone M1 (3M/CBM/Bajaj) the date for start of work was 17th November,

2009 and the work was to be completed in 6 months. However, till March’10 the

department was still in the process of design finalization.


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7.68 M/s Fiberfill Engineers Anil Engineering Works JV, contractor for PWD zone M2

mentioned in a letter dated 5-Jan-10 that the design was not finalised, changes have been

proposed in the supporting structure and the base frame of the signage.

7.69 On 30thJuly, 2010 the contractor asked for extension of time on account of

inordinate delay in finalization of drawings and designs by the Department. The contractor

was granted EOT a number of times and, finally, through a letter dated 7th January, 2011,

provisional EOT was granted up to 15th February, 2011.

7.70 M/s Fiberfill Engineers, contractor for PWD zone M3 have mentioned that ‘after

award of work, several samples at different occasions were prepared and placed before the

PWD Advisor and higher officials i/c Secretaries and Hon’ble Ministers. The arrangement of

Aluminum channel fixed with VHB tape & pop screws at joints was approved & work was

being executed accordingly.’

7.71 Fiberfill Engineers also asked for grant of extension of time on account of delay in

approval and receipt of drawings.

7.72 In case of PWD, payment has been made for extra items executed without taking

AIP for 16.54 crore. The payment has been made on the plea that the design of signages

and its structure was not finalized and these evolved after due deliberations at all levels.

The design was standardized after the award of work leading to E.I, S.I & deviation.

Cost of Delay

7.73 Steel forms approximately 62-70% in case of NDMC and 47-50% in case of PWD of

the total contract value and the price of steel always showed an increasing trend. If the

work had commenced in 2007 then there could have been savings of 3.7 crore in the

Signage project. Refer Annexure 7G for details.

Standards prescribed by IRC 7.74 HLC sought the views of a Highway Expert on the road signs installed on Delhi roads

and learnt that there is an Indian Roads Congress (IRC) standard (document number IRC 67:

2001), which provides detailed standards with regard to the size of the sign, its shape,

layout, colour scheme, the size of letters, borders and arrows, details of installation, etc.


147

7.75 The signs have been classified as mandatory signs (e.g., speed limits, parking/no

parking, no horns etc), which are circular in shape (with the exception of ‘Stop Sign’, which

is octagonal in shape) with diameters either 60 cm or 90 cm depending upon the

importance of the road and traffic speed expected; cautionary signs (e.g., left/right curves,

junctions, roundabouts, children crossing the road, narrow roads, etc), which are in the

shape of an equilateral triangle of size 60 cm or 90 cm with vertex pointing upwards

(exception ‘Give Way’ sign with vertex downwards); informatory signs giving information of

a locality or village, hospitals, eating places, petrol pumps, etc,; besides, there are other

signs, which enhance the features of the road, such as route markers and distance

information for assuring and reassuring the road users, hazard makers and chevron signs for

proper delineation of the roads during night time.

7.76 The road signs, as per IRC standards, have a sanctity for two reasons; one they are in

accordance with the Vienna Convention on Road signs, of which India is a signatory; and

secondly, these have a legal status as these are part of Motor Vehicles Act 1988.

7.77 In the 2001 version of the IRC Standards, retro-reflective sheeting of Type IV had

been provided and in the latest version of 2010 Type IX has also been included. Even though

at the time of award of contracts for road signs, Type IX signs were not part of the

Standards, HLC does not question their adoption in terms of superior quality of the product

and because at this point of time it forms part of the standards. HLC, however, would hasten

to add that by doing so GNCTD played into the hands of the two promoters and

manufacturers of this grade of RR sheeting, who are the only manufacturers world over at

present, as opposed to many of Type IV variety. Had this been adopted for pilot project, the

action would have been quite fair and bona fide. That unfortunately was not the case. The

two firms got bulk orders from the contractors, whose selection itself is questionable. As for

pilot projects, these were approved, but not with Type IX sheeting, but a still higher grade of

sheeting, i.e., Type XI, which is not part of even ASTM standards as of now. The expenditure

of 1.43 crore by PWD and 0.43 crore by NDMC on pilot project was thus entirely

wasteful and eventually benefitted the two manufacturers and the contractors.

7.78 The signs actually provided under the contract are in complete violation of the IRC

standards. What has generally been done is to paste the circular or triangular IRC signs on a


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rectangular board of more than twice the actual area of the circle or triangle, with NDMC

logo and definition of the signs covering the remaining area of the board, which is itself

totally retro-reflective.

7.79 Thus, the consumption of retro-reflective sheeting is more than twice that would be

required for putting up a standard sign. For the purpose of estimation, HLC considers that

50% of the contract value of 53.14 crore by PWD and 19.32 crore by NDMC is a wasteful

expenditure and provided undue benefit to the manufacturers and the contractors.

7.80 HLC further recommends that no further expenditure on the works be made beyond

that already made ( 12.99 crore by NDMC and 31.33 crore by PWD) and the works closed.

Box 4: Major Findings

HLC probe has revealed that: 1. Pilot Project undertaken by PWD & NDMC at an

estimated cost of 1.74 crore was a ‘total wasteful expenditure.’

2. Signages installed during Pilot project were later replaced in the main project by PWD. This is ‘criminal waste’ of public funds.

3. Installed signages do not conform to IRC standards. 4. Consumption of more than twice amount of retro-

reflective sheet is wasteful expenditure. 5. About 50% of contract value - 36 crore appears to

be wasteful expenditure designed to provide undue benefit to the manufacturer & the contractors.

6. All balance work must be immediately stopped and no further expenditure may be incurred on this project.


149

Chapter 8: Construction of Bus Queue Shelters

Background

8.1 There are about 3,000 major Bus Queue Shelters (BQS) in Delhi. Of these, 1100 are

located around the games venues or on the routes to these venues. Delhi Government in

the Transport Department together with Delhi Transport Corporation (DTC) initiated

construction of modern BQS under PPP model similar to the design used by New Delhi

Municipal Council (NDMC) with modifications suggested by DTC on the directions of the

Chief Minister (August, 2006) initially in the zones contiguous to the NDMC area and roads

leading to the Games venues.

Project Profile

Name of the Project Construction of 500 Stainless Steel Bus Queue Shelters (BQS) in three packages through open bidding with Government funds, as follows:

• Package A - 157 • Package B - 165 • Package C - 178

Project Management Consultant M./s Delhi Integrated Multi-Model Transit System Ltd.(A joint venture company set up with equal equity of Government of National Capital Territory of Delhi & Infrastructure Development Finance Company)

Estimated Cost Package A 20,71,40,486

Package B 21,76,91,693

Package C 23, 48, 44,197

Date of inviting bids 19th September, 2009

Last date for receipt of Bids 12th October, 2009

Award of Contract Package A: Awarded; 157 BQS

Package B: Not awarded

Package C: Not awarded

Details of contract for Package A

Name of Contractor Ozone KLA JV


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Tendered Cost 18,97,75,365

Date of award of work 28th January 2010

Stipulated date of completion 27th August 2010

Number of BQS constructed by the stipulated date

99

No of BQS constructed as of 31st December, 2010

152

8.2 Based on the original design (after removing the ad panel from the roof and

substituting it with a stand alone post) a number of architectural designs were prepared

and put up to the High Level Committee chaired by Chief Minister for approval. After

approval of architectural design, structural design was prepared by the team that had

designed similar BQS on the BRT corridor. 248 BQS were constructed by DTC in NDMC area

during 2007-08 in BOT mode at an attractive license fee of 93,000 per BQS per month.

However, construction of more shelters could not be taken up as the bidders did not turn

up to sign agreements and backed out on the plea that adverse market conditions did not

yield the expected advertisement revenue. The successful bidder, who had offered fee of

93,000 per shelter per month, also pleaded in the Court that the adverse market

conditions had affected his advertisement revenue and, pursuant to the directions of the

Court, was now paying around 30,000 per shelter per month.

8.3 Since the construction of more BQS was getting delayed, the Chief Minister

convened a meeting in June 2009 and, during her review of the progress on the

construction of BQS on PPP model, expressed concern at the slow progress and the

delay32

8.4 Pursuant to this decision, tenders were invited by Project Management Consultant

on behalf of the DTC in September 2009 for construction of 500 BQS in three packages. Of

the three packages, only one (157 BQS) could be awarded.

. To expedite construction of BQS, it was decided in the meeting that DTC would

take up construction on its own, to be awarded by July 2009 through an open bidding

process with the funds to be provided by the Government of National Capital Territory of

Delhi (GNCTD).

32 See Relevant Document 8B


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8.5 Delhi Integrated Multi-Modal Transit System (DIMTS), a joint venture company

with equal equity of the GNCTD and the Infrastructure Development Finance Company

(IDFC) was engaged as Project Management Consultant (PMC). The Board of Directors

comprises of eight members with Chief Secretary, Delhi as Chairman. The other members

from GNCTD include Principal Secretary, Finance; Princiapal Secretary cum Commissioner,

Transport and Principal Secretary to the Chief Minister.

8.6 In view of the urgency, after detailed deliberations in the meeting taken by the

Minister of Transport and Education on 23rd December, 200933

Summary of Findings

in which MD, M/S Delhi

Integrated Multi-Model Transit System Ltd.( DIMTS )was also present, it was decided to

entrust 1000 odd sites to DIMTS for construction of BQS, 250 on BOT basis and about 800

to be constructed with the funds to be provided by the GNCTD and the Government of

India, even though the Finance Department had advised to explore the PPP route and

observed that in view of funds constraint the remaining bus shelters be taken up on

PPP/BOT basis.

Sl. No. Findings

1. Procurement of project management services were not formally advertised to evaluate technical attributes and cost factors.

2. Of the 500 BQS to be constructed, agency could be fixed and work awarded for 157 BQS (Package A) only, of which only 99 were constructed by 27th August, 2010, the stipulated date and as of December 2010, five still remained to be constructed. Thus the timeline was not met.

3. The offered rate of second lowest (47.06 per cent above estimated cost) and third lowest (61.57 per cent of above estimated cost) for Package A were well wide of the lowest offer (8.38 per cent less than the estimated cost), suggesting unrealistic competition.

4. There was wide variation between the rates offered and the estimated rates purportedly worked out on market rates, suggesting imbalanced bid, unrealistic and unreliable estimate.

5. 15,000 fixed as cost for material retrieved from old dismantled BQS was only an ad-hoc estimate and not based on any survey. Though the contractor had offered

16,155 for old dismantled BQS, recovery had been made @ 15,000 only.

33 See Relevant Document 8C


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6. The contractor had to give credit to DTC at his tendered and accepted rate of 16,155 for each old dismantled BQS. He was instead paid @ 16,155, thus resulting in an irregular payment of 12.60 lakh.

Observations

Selection of Project Management Consultant 8.7 Delhi Transport Corporation (DTC) sought an offer from Delhi Integrated Multi-

Model Transit System Ltd. (DIMTS) on 24th June 200934

(i) Preparation of detailed architectural drawings;

, to be received by 29th June 2009, for

providing project management consultancy service for construction of Bus Queue Shelters

(BQS) in stainless steel similar to those executed by New Delhi Municipal Corporation (NDMC)

in its area and DTC in Municipal Corporation of Delhi area. The scope of work, inter-alia,

included:

(ii) Preparation of structural design and drawings;

(iii) Preparation of cost estimates;

(iv) Preparation of tender documents including call of tenders;

(v) Arranging a pre-bid meeting and technical and financial evaluation of tenders

received;

(vi) To make recommendation to DTC for award of work to a selected contractor.

8.8 The procurement of project management services was negotiated and not formally

advertised to evaluate technical attributes and cost factors. Delhi Integrated Multi-Model

Project System (DIMTS), a joint venture of the Government of National Capital Territory of

Delhi (GNCTD) and the Infrastructure Development Finance Corporation Limited (IDFC),

expressed their willingness on 26th June, 200935

34 Refer Relevant Document 8D

to undertake the role of Project

Management Consultant (PMC) asserting that in view of Cabinet decision No.1473 of 10th

35 Refer Relevant Document 8E


153

September, 200836

8.9 DIMTS sent another letter on 15th July, 2009 containing a proposal to undertake the

consultancy and the fee payable, which DIMTS offered as per CPWD manual. In the meeting

of 25th August, 2009, DTC Board accorded post-facto approval to the engagement of M/s

DIMTS as PMC for construction of 500 BQS at various locations on routes to various

Commonwealth Games (CWG) venues at 3.75 per cent of the cost of work. The Board also

authorized DTC to approve tender documents and also take action for execution of the

project of construction of 500 BQS entrusted to DIMTS for which funds were to be provided

by the Government of NCT of Delhi.

, the work of PMC by DTC was to be assigned to DIMTS. As per Cabinet

decision the fee payable was, however, to be according to the rate card approved by the

Government. To decide the terms of payment for works given to DIMTS, a meeting was

convened by Chief Secretary (also Chairman of DIMTS) on 9th February, 2009 which was

attended by six officers including the Principal Secretary, Finance, Secretary cum

Commissioner, Transport and Managing Director, DIMTS (all on the Board of Directors of

DIMTS). As far as civil works were concerned, it was decided to follow the norms laid down

in the CPWD Code for Project Management Consultancy for determining the charges

payable to DIMTS.

8.10 Formal agreement was signed between the DTC and the DIMTS only on 24th May,

2010. As per agreement, DIMTS was to receive consolidated remuneration of 5 per cent of

project cost for bid process management and supervision of work including quality control.

Out of 500 BQS, DIMTS was not to charge for last 125 provided the total No. of BQS was not

less than 500.

Invitation of Bids 8.11 Request inviting bids on behalf of DTC for construction of 500 BQS of stainless steel

design in three packages, Package A: 157; Package B: 165 and Package C:178 was issued by

DIMTS in September 2009 to be received by 12th October, 2009 (up to 1500 hrs). The

construction was to be completed in 7 months. For the 3 packages, 3 bids each were

received. The details are tabulated below:

36 Refer Relevant Document 8A


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Package No of

BQS

Name of Bidder and Tender cost

1 2 3

A 157 M/s Ozone KLA JV

18,97,75,365

Bus Shelters Ltd

30,46,15,689

Uttam Surcotech International Pvt. Ltd. & Uttam Surcotech Ltd

33,46,99,592

B 165 C.S Const. Co. Pvt Ltd

23,99,59,417

Bus Shelters Ltd

32,01,31,644

Tolar Manufacturing Co. & Minaean Habitate India Pvt. Ltd

28,51,08,210

C 178 C.S. Construction Co. Pvt. Ltd

25,88,65,799

Bus Shelters Ltd

34,53,56,402

Uttam Surcotech International Pvt. Ltd. & Uttam Surcotech Ltd

37,94,65,031

Evaluation of Technical Bids 8.12 Technical bids received from M/s Ozone KLA JV, (ii) M/s Bus Shelters Ltd., (iii) M/s

Uttam Surcotech International Pvt. Ltd. & Uttam Surcotech Ltd. JV, (iv) M/s Tolar

Manufacturing Company JV M/s Minaean Habitate India Pvt. Ltd. and (v) M/s C.S. Construction

Company Ltd. were evaluated on 6.11.2009 by Evaluation Committee constituted by DIMTS,

comprising three members. The Committee found the technical bid of all the bidders

conforming to the qualifying criteria and recommended their acceptance and opening of their

financial bids.

Evaluation of Financial bids 8.13 Financial bids were opened on 18th November 2009. Three-member Tender

Committee of DIMTS met on 26th November, 2009 to evaluate financial bids. For Package A,

offer of M/s Ozone KLA JV was the lowest at their quoted rate of 18,97,75,365 which was

8.38 per cent lower than the estimated cost of 20,71,40,486. For Package B, bid of M/s C.S.

Construction Company Pvt. Ltd. was the lowest at their offered rate of 23,99,59,417 which

was 10.23 per cent higher than the estimated cost of 21,76,91,693. For Package C, bid of M/s

C.S. Construction Company Ltd. was the lowest at their offered rate of 25,88,65,799 which

was 10.23 per cent higher than the estimated cost 23,48,44,197. In all the three packages, bid

for Package A was the lowest. During negotiation, bidders for Package B and Package C, did not


155

agree to reduce their offer to match the offer received for Package A nor did the bidder for

Package A agree, because of his capacity limitations to take up construction under Package B

and C. Hence, these could not be finalized.

8.14 The Committee recommended to DTC on 26th November, 2009 to accept offer of

M/s Ozone KLA JV, the lowest bidder (L1), at his offered rate of 18,97,75,365 which the

Committee contended was 8.38 per cent lower than the estimated cost of 20,71,40,486

worked out by DIMTS purportedly on market rates. The average cost offered by L1 worked out

to 12.09 lakh per BQS against the estimate of 13.19 lakh. The DTC Board in its meeting held

on 22nd December, 2009 approved award of work of Package A: 157 BQS to M/s Ozone KLA JV

at a cost of 18.98 crore.

Award of contract 8.15 Letter of acceptance and award of work at a total cost of 18,97,75,365 was issued

by DTC to M/s Ozone KLA JV on 28th January, 2010. The work was to be completed in 7 months

from the date of award of work. The offer was accepted by M/s Ozone KLA JV on 10th February,

2010. By the stipulated date of completion of work, only 99 BQS had been constructed. As of

December 2010, of 157 BQS, 152 had reportedly been completed and balance 5 were still

under construction. Payment of 13.51 crore has been made as of December 2010.

Reasonability and Competitiveness of rates 8.16 Tender Committee of DIMTS constituted for evaluation of financial bids for Package

A: 157 BQS of stainless steel design for DTC in their report of 26th November 2009

recommended award of work to L1 at their offered rate of 18.98 crore being the lowest offer

of the three offers, the second lowest being 30.46 crore and the third being 33.47 crore.

While L1 was 8.38 per cent less than the estimated cost, the second and the third were 47.06

per cent and 61.57 per cent respectively higher than the estimated cost, well wide of the L1,

suggesting unrealistic competition.

8.17 The tendered rate for various items is not comparable with the estimated rate. The

offered unit rate for items listed below is extraordinarily, higher or lower than the estimated

rate; indicative of imbalanced bid, unrealistic and unreliable estimate.


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Item No. of BOQ

Unit Estimated Rate ( )

Offered rate ( ) Offered rate (4 ) compared to

estimated rate (3) high (+) or low (-) in per cent

1 2 3 4 5

11 Sqm 1450 4469.55 (+) 208.24

12 Each 8000 3231 (-) 59.61

14 Cum 4000 7836.25 (+) 95.91

17 Each 5078 1346.25 (-) 73.49

24 Set 2500 376.95 (-) 84.92

26 Each 9600 7646.70 (-) 20.32

28 Cum 4000 6031.20 (+) 50.78

30 Each 5000 2477.10 (-) 50.46

31 Each 70,000 26,925 (-) 61.54

Dismantling of old exiting BQS – Item No.27 of BQS of Package A 8.18 Dismantling of any type of existing old BQS structure including sorting out of

dismantled material, disposal of all serviceable and unserviceable material at the cost of the

contractor is a part of the construction contract. Stipulation in the BOQ provides that the

contractor shall take away the dismantled material for which he will give credit to the

department. No reserve price had been fixed for the dismantled material. DIMTS clarified in

the pre-bid meeting that DTC had fixed 15,000 on an average for each old demolished BQS

to be credited to DTC by the bidder. Obviously, the value had been fixed on ad-hoc basis and

not after proper survey.

8.19 L1 had quoted 16,155 for each dismantled BQS. This cost had been included in the

price bid of L1, notwithstanding the fact that the contractor had to give credit to DTC at his

tendered and accepted rate of 16,155. Evidently, the bid amount of L1 18.98 crore had

been over-worked out by 25.36 lakh (@ 16,155 for 157 BQS)

8.20 In RAB 1-3 deduction had been made from the contractor for 25 BQS at 16,155

towards the cost of dismantled material of each old BQS. In RAB 06 recovery was made from

the contractor at 15,000 only per BQS for 78 BQS (remaining BQS constructed on new


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sites) instead of 16,155 and the difference of deduction made for 25 BQS in RAB 1-3 at

16,155 adjusted in RAB 06.

8.21 In RAB 06, contractor had been paid for dismantling of old BQS at 16,155 per BQS

for 78 old BQS which has resulted in an irregular payment of 12.60 lakh.

Advertisement Rights 8.22 Tender for display of advertisement rights on the newly constructed BQS has been

invited by the DTC only in January 2011.

Box 1: What really happened?

HLC received complaints that the Transport Deptt., GNCTD had awarded the work relating to construction and maintenance of 200 modern Bus Shelters without tender to a MNC JC Deaux in 2009. The Firm is to pay a fixed amount of Rs.12,000/- per month to Govt. for the next 15 years. This has been done ostensibly on the earlier model of NDMC wherein similar work was awarded to the same Company in 2007 for a period of five years on the same terms and conditions. Govt. of Delhi has suffered revenue loss as there is no escalation clause in the rent amount; work was awarded without tender. This was reportedly done through DIMTS, the consultant company for BRT corridor in Delhi.

Enquiry conducted by HLC reveals that

i. Selection of DIMTS as Project Management Consultant was without following the tender process;

ii. While on paper, the work of Phase 1 for construction of 157 BQS was awarded to M/s Ozone KLA JV after calling tenders, the wide variation in the rates offered by other two bidders gives rise to suspicion that those were ‘stage managed’; work was not awaded to JC Deaux on BOT basis;

iii. Irregular payments of 12.60 lakh has been made to the contractor;

iv. Recovery from contractor has been made @ 15,000 for each dismantled BQS even when the contractor had offered 16155!


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Chapter 9: Tourist Infrastructure

9.1 The Group of Ministers (GOM) in its 8th meeting held on 7th November, 2005

discussed the issue related to preparing the infrastructure for accommodating the tourists

during the Commonwealth Games 2010. It was decided that “the DDA and Ministry of

Tourism would hold discussions so as to arrive at the optimum number of hotel sites for

CWG 2010”. Following up on this decision, DDA consultant (PwC) engaged the services of

Jones Lang LaSalle. The relevant section of the report (Aug. 2006) that deals with the

NCRORE Hotel Market Analysis indicated a demand supply gap of 3055 rooms in NCRORE by

2010 for normal category of foreign and domestic business/professional/executives visiting

Delhi. The report further estimated that an additional 29,800 hotel rooms were required in

NCRORE during the Commonwealth Games 2010 solely based on the CWG experience in

Melbourne (2006) and Manchester (2002).

9.2 The issue of augmentation of hotel rooms to the desired 30,000 rooms in NCRORE

was discussed in the meetings of GoM, Committee of Secretaries (CoS), MoYAS, Organizing

Committee, MoUD and MoT as well as the Task Force set up for monitoring the progress.

The measures to promote augmentation of tourist accommodation included;

• Auction of Hotel plots by the DDA, Uttar Pradesh and Haryana;

• 5 year tax holiday for those hotels that become functional by 31st March

2010. A separate notification was issued by the Ministry of Finance and

subsequently for extension of the incentive up to 31st July 2010.

• Speedy issue of completion certificates to hotels by DDA,

• Grant of interest subsidy on loans to licensed Guest houses in NCRORE.

• Several suggestions included increase of FAR even for existing hotels,

reverting possession of the Akbar Hotel to ITDC, converting the old MCD

office into heritage hotel, setting up Mini India tourist complex, exploring

the possibility of tented accommodation, Housing units of DDA and other

builders, and initiating the Bed & Breakfast Scheme.

Whereas many measures were implemented with varying degrees of success, there were

several suggestions that were not implemented for various reasons.


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9.3 The High Level Committee (HLC) examined the governance issues related to the

augmentation of tourist infrastructure and additionally selected two major activities of DDA

that sought to contribute to the augmentation of tourist accommodation, viz., (a) auction of

plots for setting up hotels in Delhi. (b) Vasant Kunj Housing project which was to be

furnished by ITDC.

Expert Report 9.4 Jones Lang LaSalle (JLL) report estimated demand supply gap of hotel rooms

assuming 80% occupancy (daily number of rooms) in Delhi during 2010 at 3055 for the

normal category of foreign and domestic business/professional/executives visiting Delhi.

This figure was based on JLL research of total number of room nights available annually as

juxtaposed to annual demands of foreign and domestic tourists. Whereas the daily demand

supply gap as deduced from the annual figures may provide a general indicator of the room

requirement, it does not provide adequate information for taking an informed decision for

meeting the demands during the conduct of the Games in October 2010. In the opinion of

the HLC, estimation of the demand-supply gap could have been projected for the month of

October 2010 based on the corresponding figures for the months of October in other years.

The figure of 3055 therefore is not fully reliable for taking the decision. In any case, those in

the governance role did not specifically seek to bridge this gap.

Rationale for Room Deficit 9.5 The HLC attention was devoted to the additional room requirement of 30,000. The

records showed that while estimating the additional hotel room requirement of 29,800 in

NCRORE during the Commonwealth Games in October 2010, the PwC (JLL) solely relied

upon the CWG experience in Melbourne (2006) and Manchester (2002) where reportedly

“approximately 50,000 foreign visitors visited the host cities for the games. This number of

50,000 tourists represents additional inflow over normal tourist numbers in that particular

year for the host cities. Apart from the international tourists, around 40,000 domestic

tourists also visited Melbourne for the games.” The same figures of 50,000 foreign tourists

and 40,000 domestic tourists were adopted for the CWG 2010 in Delhi while estimating the

requirement for additional hotel rooms.


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9.6 It may be noted, that these figures do not elaborate on the Manchester experience

as to visitors and restricts itself to Melbourne only. The HLC moreover found no

amplification as to the verifiable source of this data and exact nexus with the city of Delhi.

The JLL reliance upon unverified general data of the past events in other countries without

factoring parameters specific to Delhi in particular and India in general seems inappropriate

while suggesting the hotel room requirements.

9.7 It was obligatory upon the Ministry of Tourism and DDA and those in the governance

role to assess whether the requirement for additional rooms (29,800) was arrived at

through scientific approach to estimation and projection of specific demand drivers for hotel

rooms in Delhi. The HLC found a study commissioned by the Ministry of Tourism as late as

July 2009 through the Indian Institute of Tourism and Travel Management to assess the

needs for hotel rooms during the CWG 2010. By this time, actions and measures were

already in place based on the PwC (JLL) report to the DDA.

9.8 The HLC finds that the general gap of 3055 rooms was ignored and overall

anticipated shortage figure of 29,800 was rounded up to additional 30,000 hotel rooms. This

figure then was accepted without question and acted upon for taking administrative and

operational decisions that attempted to augment tourist infrastructure in NCRORE

accordingly.

Tourist Arrivals 9.9 The actual arrival of foreign tourists in Delhi showed following scenario over the

years.

October All India Year on Year Actual percentage share of Delhi

Delhi – Actual figures

JLL estimates for Delhi

2005 347757 31.9 110,934 121,000

2006 391399 12.5 32.0 125,247 133,000

2007 444564 13.6 31.4 139,593 145,000

2008 450013 1.2 31.8 143,104 156,000

2009 445963 (0.9) 169,000

2010 487000 9.2 75,606* 182,000

*Figures relate to period October 1-14, 2010 & stated in a reply to Parliament question


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The JLL estimate of foreign tourists in Delhi against the actual arrivals during the period

October 1-14, 2010 was 25% less than expected. It may be recalled that Melbourne had

attracted 90,000 foreign tourists during CWG, 2006. Thus, like many other assumptions

made in relation to CWG, 2010, the estimate about the potential number of foreign tourists

likely to visit Delhi during the Games period was also misplaced.

Wrong treatment based on wrong diagnosis 9.10 Those in the Governance role monitored the implementation periodically and set up

specific task force for monitoring. Following instances are indicative of the nature of

attention given to the activity with heightened concern to fill the projected demand-supply

gap of 30,000 rooms.

9.11 Several agencies such as DDA, ITDC, Delhi Government, UP and Haryana

Governments and the Ministries were pressed into implementing ‘urgent’ measures to

augment the tourist accommodation on priority basis, on fast track mode citing national

interest and time constraints.

9.12 Incentives were held out in the form of tax holiday, interest free loans, compliance

clearances on priority, and approval of building plans and completion certificates ahead of

the CWG event.

Conclusion 9.13 The demand - supply gap for the additional inflow of tourists in Delhi was not arrived

at on a systematic basis but was based on unverified general data related to CWG events in

Melbourne 2006. This had the effect of generating heightened pressure on DDA and others

to put in place structures and activities on fast track basis thereby unreasonably stretching

the resources at their command.

Tourist Accommodation for CWG-2010

9.14 Although the CWG 2010 was allotted to India in 2003, preparations for the Games

did not start immediately. As regards the augmentation of tourist accommodation in Delhi

given the prediction of demand-supply gap of hotel rooms, the GoM directed (Nov 2005)

the DDA and Ministry of Tourism to study the case for additional hotel rooms. The DDA

thereafter appointed the PwC as its consultants who submitted its report in August 2006.


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Echoing the report findings, the GoM and COS highlighted the need to augment the capacity

in Delhi.

Auction of Hotel plots for setting up hotels in Delhi 9.15 The demand supply gap was projected in a way whereby auction of Hotel plots in

Delhi by DDA was undertaken on priority basis.

9.16 According to the PwC (JLL) market research analysis the total number of demands for

hotel rooms during CWG 2010 was estimated at additional 29,800 rooms. In order to meet

the demand supply gap for hotel rooms, DDA put in place the programme for auction of 33

hotel sites with the expected supply of a total of 5453 rooms gradually in 2006, 2007 and

2008.

9.17 The GoM and the COS regularly emphasized the importance of auctioning the hotel

sites in various meetings over the period. The DDA accordingly, auctioned / tendered 33

hotel sites in various parts of the city.

Year of auction/ tender

Number of Plots Conditions regarding construction37

Total number of expected rooms

Within 24 months

Within 36 months

Within 42 months

By end of 2006

09 2 0 7 2338

By end of 2007

18 16 2 0 2955

By end of 2008

06 6 0 0 160

TOTAL 33 24 2 7 5453

9.18 It was noted that the DDA had been holding out assurances as to 5453 additional

hotel rooms that would be available in view of the auctions / tendering of the hotel plots. In

addition to the various incentives held out to the hoteliers, the DDA proposed and the LG

approved the scheme of Limited Term Use Permission for Commonwealth Games related

building projects. The DDA also modified the Master Plan 2001 to enhance the FAR for

37 Leasehold condition laid down completion of construction within 24 months whereas freehold plots had varying number of months, typically for 24, 36 and 42 months.


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hotels from 150 to 225. Following incentives were offered to the Hotel owners to speed up

construction.

• Permission to start construction without prior clearance from DPCC;

• Permission for construction up to plinth level pending clearances from statutory

bodies like DUAC and CFO;

• Conditional waiver of prior to sanction charges for construction beyond plinth

level, subject to the condition that the hotels are operationalized before CWG;

• Approval by Technical Committee to forward the revised building plans to DUAC

& CFO, pending show cause notice issued for deviations in buildings during

construction stage and guidelines to deal with deviations in terms of height in

basement and public areas.

9.19 The Demand cum Allotment letter adequately projected the completion of hotels

before the start of the Games; however, following issues were noted that resulted in non-

completion of the desired number of hotels despite several incentives.

9.20 In case of at least 18 hotel sites, the same were not developed for a long time after

lapse of the condition related to development of site. The details of additional time gap

between the date on which plots were to be developed and the date of receipt of plan from

the hotels is cited as indicative of the delay in construction.38

9.21 Out of 33 hotel sites, only 1 site became functional with valid occupancy certificate

before the commencement of Games offering 219 rooms out of the expected total rooms

5453.

9.22 Officials of HLC undertook a field visit of the plots auctioned to develop hotel sites.

Conclusion

9.23 Demand forecast for additional Hotel Rooms for September – October, 2010 was

based on a superficial juxtaposition between Melbourne (2006) and Delhi (2010). Evaluation

Commission (2003) had noted the sufficient availability of quality Hotel rooms in Delhi.

Hotel occupancy during September – October 2010 in Delhi was % despite the failure of

38 See Annexure 9A


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DDA project. Surprisingly, Ministry of Tourism remained emphatic about exaggerated

additional requirement till 2010 and frequently flagged this at GoM meetings.

9.24 The strategy to augment hotel rooms for tourists could not be realized to the extent

of 5453 rooms even after offering several incentives for speedy and timely completion of

the hotel projects. The HLC is of the opinion that under the pretext of ‘shortage of hotel

rooms in Delhi’, the entire exercise was dovetailed to auction off hotel plots on ‘fast track’

basis coupled with several financial and compliance related incentives. However, DDA did

not monitor the activities of successful bidders to ensure completion of the hotel projects

ahead of the Commonwealth Games, nor inserted a condition to resume the land in case of

failure to implement.Thus, DDA land parcels were alienated in the name of the Games.

9.25 Among other schemes for augmenting the tourist accommodation, the DDA’s

existing ongoing Housing scheme comprising of (a) 805 Low Income Group (LIG) flats and (b)

1904 LIG/MIG/HIG flats under construction was chosen for the purpose of augmenting

alternative tourist accommodation within the time schedule expected for CWG 2010.

Following up the matter, the meeting (7th November, 2008) chaired by Secretary, Tourism

regarding infrastructure development for CWG recognized the DDA information that around

4500 rooms in Vasant Kunj would be made available by March 2010 for use as alternative

tourist accommodation as upgraded by ITDC with 3 star facilities.

Status of Vasant Kunj flats in Nov. 2008

9.26 It is relevant to note that the Vasant Kunj scheme of DDA had run into several legal

hurdles since acquisition of land in 1999 and its change of land use. Following the PIL dated

12th August, 2002 which was disposed off in September 2002 with the direction that

approval of Central government for construction on the site is necessary before resuming

any construction; the DDA formally obtained in 2004 the Gazzette notification from MoUD

for modification in the Master Plan for Delhi. The Scheme conceived in 2005 for

construction of 805 LIG flats was implemented to the extent of 91% by November 2008.

9.27 The timeline of events for the 1904 flats (Mega Housing Scheme for LIG/MIG/HIG)

would highlight the important dates in the history of the project till date.


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S.No. Particulars Year

1 DDA Vasant Kunj Mega Housing project conceived 1999

2 DDA housing scheme started in 2001

3 Initial tendering by DDA 2001

4 PIL by NGO & hence work stopped Aug 2002

5 High court directed to obtain Central govt. approval Sep 2002

6 Central govt. approval obtained & Gazette notification issued

Jan 2004

7 DDA retendered the project Sep 2007

8 10% civil work completed Sep 2007

9 MoT meeting chaired by Secretary of Tourism 07Nov2008

10 17% civil work was complete 07Nov2008

11 Final specifications worked out for CWG purpose April 2009

12 Re-start of civil work Dec 2009

13 Stage of construction (56%) April 2010

14 Stage of construction at the start of the CWG (70%) Sep 2010

15 Stage of construction (75%) Dec 2010

9.28 Evidently, DDA was aware of the dormant nature of the 1904 flats Mega Housing

project (MHP) as on November 2008 (the date of taking the decision to use them as

alternative tourist accommodation), only 17% of the civil work was completed. It was also

aware that several sanctions were to be obtained from various authorities that would make

the date of readiness by June 2010, a daunting task. The date wise detail of actual sanctions

obtained often citing ‘urgency’ as regards Commonwealth Games was as under:

S.No. Particulars Date for LIG flats (805 nos.)

Date for MHP flats (1904 nos.)

1 MCD for drainage 30.9.2008 21.07.2009

2 Delhi Jal Board sanction for sewerage

5.11.2008 08.09.2009


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S.No. Particulars Date for LIG flats (805 nos.)

Date for MHP flats (1904 nos.)

3 Environmental clearance 30.04.2010 24.10. 2009

4 Delhi Jal Board for water supply 05.12.2008 30.11.2009

5 Demolition of unauthorized Shanti sports complex

- 24. 02. 2010

6 Civil aviation - 19.4.2010

7 Fire Not available 01.10.2010

8 Lift Sep.2010 Sep 2010

9 MCD for drainage 30.9.2008 (for 2 blocks out of 16

9.29 From the above, it may be noted that 1904 flats did not even have the civil aviation

clearance till 19th April, 2010. The HLC scrutiny of records showed that there was only 70%

completion of the project even as late as September 2010. Yet, the LG, being Chairman of

the DDA, assured the GoM on 29th June, 2010 that he was personally monitoring the work

to ensure their completion in time and that these units would be made available for

tourists.

Expedited clearance for building height

9.30 Whereas 805 LIG flats needed no height clearance as these were built as Ground + 4

floors; the 1904 flats project was conceived as Ground + 8 floors and, being within the

radius of Airport Authority, required permission of Civil Aviation Authority. The Vice-

Chairman approached the AAI on 20th November, 2009 and was provided with revised NOC

dated 19th April, 2010.

9.31 The HLC noted that the issue of height clearance was raised in the meeting of the

Committee of Secretaries held on 29th December, 2009. The Ministry of Civil Aviation

reported that the 4 additional floors were constructed by the DDA apparently in violation of

the aviation norms and required to be resolved by the Appellate Authority. It was felt in the

meeting that these flats project was conceived in 1999 whereas present height norms had

been evolved keeping in view the 3rd runway of the Delhi airport and therefore “should not

come in the way of a project conceived much earlier”. Cabinet Secretary desired that since


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the structures had come up, the Ministry of Civil Aviation may consider all factors and take a

positive view in the context of requirements for the Commonwealth Games.

Violation of Height restrictions

9.32 The HLC noted that the revised NOC of Airport Authority of India [letter no.

AAI/20012/54/2009-ARI (NOC) dated 19.4.2010] sanctioned 27 meters AGL. On examination

of records the HLC found that the present height of the constructed residential buildings is

more than the approved height and is in violation of the NOC. The HLC requested the DDA

and was provided with the actual height of Group 4 of the buildings (1904 flats scheme).

The HLC finds that as against the 27 meters AGL, the actual height is 30.80 meters AGL and

the DDA has therefore violated the AAI approval.

9.33 The revised NOC from Airports Authority of India was obtained citing the urgent

need to augment the tourist accommodation for CWG even when the DDA was aware that

the 1904 flats would not be ready for the purpose. The entire exercise to obtain ‘revised

NOC’ was spearheaded in the name of Commonwealth Games and consequently important

provisions relating to height restrictions of AAI were compromised to regularize evidently

illegal construction by DDA to the extent of 4 metres.

Availability of Vasant Kunj flats:

9.34 DDA was not able to complete the promised number of Vasant Kunj flats (5009

rooms) in time and as such could not contribute significantly to the availability of alternative

tourist accommodation.

9.35 DDA was tasked with construction of 5009 rooms at its existing housing scheme of

Vasant Kunj area as late as November 2008 although the Ministry of Tourism was aware of

the shortage of tourist accommodation in Delhi as early as 2006.

9.36 The actual performance of DDA was reviewed in terms of the completion of the

rooms, its furnishing by the ITDC and availability for the tourists as under:

Ready flats handed over to ITDC

Furnished by ITDC

Total available Utilized

Target 805 (LIG) 1904 (MIX)

805 (LIG)

1904 (MIX)

805 (LIG)

1904 (MIX)

805 (LIG)

1904 (MIX)


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Ready flats handed over to ITDC

Furnished by ITDC

Total available Utilized

Achieved 805 482 778 - 778 - 445 Nil

9.37 Evidently, the DDA and ITDC were not able to meet the deadline date of 31st March,

2010 for completion of the flats / rooms in all respects including the furnishing of the rooms

for the tourists. The HLC acknowledges the efforts of the DDA towards meeting the deadline

date, yet realizes the very unrealistic time frames that were set up.

9.38 The HLC was informed that of the 445 rooms occupied by 671 persons (7554 nights)

during the period from 23.9.2010 to 14.10 2010 did not include a single tourist. The persons

who occupied these rooms were national technicians sponsored by the Organizing

Committee (OC). The OC incidentally had requested for 1500 rooms on 18th August, 2010

and yet could utilize only 445 of the 778 rooms that were furnished and offered for

occupation. ITDC charged 3500 per person per day from OC for the accommodation

provided to national technicians at Vasant Kunj LIG flats. On the other hand 5 star facility at

the Hotel Ashok charged 6000 per day for double room inclusive of Breakfast plus taxes.

Understandably, the ITDC could not get any tourist booking of the rooms at Vasant Kunj

flats even after displaying their availability on its website.

Conclusion

9.39 The HLC finds that the objective of making available alternative tourist

accommodation of 5009 rooms at the Vasant Kunj flats was not achieved and that only 778

rooms (or 15.5%) could finally be made available.

Furnishing of Residential flats

9.40 Normal DDA housing scheme flats are not conceived to match the specifications of 3

star hotels and as such the expectation that these could be upgraded/ matched with 3 star

facilities was farfetched.

Three Star Rating

9.41 Following are the requirements of 3 star facilities in tourist accommodation and

their comparison with Vasant Kunj flats.


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S.No. Criteria 3 Star Hotel

Vasant Kunj Compliance

1 Minimum no. of ‘Lettable’ rooms 20 Yes

2 Minimum size of bedroom excluding Bathroom in sq. ft.

140 No (78.3)

3 Percentage of rooms with AC >=50 Yes

4 Percentage of rooms with attached bathroom 100 No

5 Bathroom with shower (percentage) 100 Yes

6 Telephone facility for guests at each floor/ in each room

Yes Yes

7 Dining room/ Restaurant With AC Yes Yes

8 Cuisine offering [Indian & continental] Both Yes Yes

9 Bar Yes No

10 Staff : Knowledge of English Yes Yes

11 Staff : Knowledge of other foreign language Yes Yes

12 Lobby & separate ladies & gentlemen’s Cloakrooms Yes No

13 Book stall Yes No

14 Travel counter Yes No

15 Money changer Yes No

16 Safe deposit box Yes No

17 Laundry and dry cleaning service Yes Yes

9.42 Comparison of the 3 star facility requirements against the actual provided at the

Vasant Kunj apartments showed that these were not equivalent to 3 star facilities. The

selection of these LIG flats for example with reference to the size of the bedroom could

have been anticipated ahead of readying them with the soft and hard furnishings.

Conclusion

9.43 The HLC concludes that the decision to match the Vasant Kunj flats to 3 star facilities

was ill-conceived.


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Decision to upgrade Vasant Kunj flats

9.44 Considering Vasant Kunj flats were part of the normal housing scheme of DDA, the

decision to upgrade them to a 3 star facility with a view to augment tourist accommodation

in Delhi for just 15 days seems ill-founded.

Analysis and findings:

9.45 The entire issue of augmenting the tourist accommodation in Delhi recognized the

demand –supply gap of hotel rooms particularly during the period of CWG 2010. A well

informed decision to upgrade the existing upcoming housing scheme to a 3 star facility

should have factored the expected lasting contribution the upgraded rooms would make to

the total availability of tourist accommodation in Delhi. Knowing that the Vasant Kunj flats

would be eventually offered to the public at large, the decision to select, upgrade and

furnish these flats for tourist accommodation for a short period of 15 days seems ill

founded.

Agreement with ITDC

9.46 The HLC was informed that the DDA/ITDC entered into contract (between August

2009 to August 2010) for 108 crore on soft and hard furnishing of these flats in a run up to

the holding of CWG in October 2010. The summary is as under:

• 4204 Air conditioners were procured from Voltas at 8.37 crore.

• 68 Lifts were procured from Otis Elevators at a cost of 8.56 crore.

• Wardrobes and kitchen cabinets etc for 18.99 crore

• Furniture including Curtains 33.15crore.

• LCD, refrigerators and Kettle 7.75 crore

• Furnishing 1.28 crore

• Other Electrical works for 7.21 crore.

• Bathroom accessories and tiles, kitchen mixers, etc. 22.69 crore

9.47 DDA had known by 19th April, 2010 that 1904 flats lacked the NOC from Airports

Authority of India and therefore these could not have been possibly readied by June 2010;

the HLC finds it intriguing that the DDA proceeded with the award of contracts for soft and

hard furnishing of all 2709 flats at the Vasant Kunj. The impact of this decision was that


171

several items of soft and hard furnishing are lying at the site without use as of 21st

December, 2010.

9.48 Lack of coordination between DDA and ITDC, delay in handing over of the premises,

short handing over of flats has resulted in excess receipt of furniture for which proper

storage facility was not available at the site.

Infructuous expenditure

9.49 The quality, durability & future use of furniture is also questionable as per quality

reports and internal DDA file notes including physical site visits. Hence, expenditure of 42

crore for furniture & furnishing was not well planned.

9.50 As of 31st December, 2010, only 1300 ACs were fitted against awarded (Aug 2010)

contract quantity of 4204 ACs; 2904 ACs are still to be received & fitted. Moreover, the size

of the LIG bedroom warranted at most 1 ton capacity of the air-conditioner. It was noted

that powerful 1.5 ton ACs were fitted in small rooms of 8.25*9.5 sft in urgency.

9.51 Following items were pending for installation (though lying in stock) as regards 1904

flats scheme as of 31st December, 2010:

Particulars Pending Installation Pending Supply

Electrical water heater 447 nos. Nil

Ceiling fans 872 nos. Nil

Exhaust fans 485 nos. 160 nos.

9.52 Tender for furniture & furnishing was initiated during December’ 09 and finally work

order was awarded during Feb.-Mar.’ 10 but till then DDA or OC never updated ITDC for the

rooms / flats requirement and hence ITDC continued with the work order for 2709 flats

though in the end only 778 flats were finally furnished for the Games. This indicates poor

coordination among DDA, ITDC, and OC in the setting up of the facility for tourists.

9.53 No mock-up for furniture of 805 LIG flats was made. Due to this, supply quality

cannot be physical compared with the physically approved sample.


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Conclusion

9.54 The HLC finds the decision to upgrade the Vasant Kunj flats to 3-star tourist

accommodations to be prohibitively expensive. Besides, the objective of making available

the desired number of flats was not achieved as neither the DDA was able to complete all

the flats nor was the ITDC able to furnish the transferred flats by the deadline dates.

9.55 Whereas administrative costs of implementing, managing and monitoring the

decision involved huge resources which are difficult to quantify in financial terms; the fact

remains that mere 671 national technicians could be accommodated for a total 7554 nights.

Thus, up-gradation cost worked out to 1.43 lakh per person per night. Besides, this

accommodation did not add to the tourist infrastructure as legacy investment.


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Chapter 10: Grade Separator at Raja Ram Kohli Marg and Shastri Nagar Intersection at East Delhi.

Salient Features

10.1 The project included construction of main flyover including loops, slip roads, cycle

tracks, drainage and allied services

10.2 Grade Separator at Raja Ram Kohli Marg and Shastri Nagar Intersection at East Delhi

is an infrastructure project not directly related to Commonwealth Games – 2010. However,

its progress was monitored along with CWG related projects. The project was conceived by

Public Works Department, Government of Delhi in February 2005. The project was approved

by DDA Technical Committee in its meeting held on 03.07.2006 vide No. F.1[10]/2006/-

MP/218 dated 17.07.2006. The project was cleared by Yamuna Standing Committee on

07.08.2006 vide No. 16/IY-C/2006/B-P.I/206 dated 07.08.2006. The project was also

approved by DUAC vide No. 19(9)/2006/DUAC dated 20.10.2006.

10.3 Initially, two separate Project Estimates were framed in August, 2006 for the project

namely Grade Separator at Raja Ram Kohli Marg and Grade Separator at Shastri Nagar

Intersection for 96.51 crores and 82.75 crores and were submitted to GNCTD on

22.08.2006 for accord of AA&ES. AA&E/S was accorded on 28.09.2006 and 30.03.2007

respectively.

10.4 Both the projects were clubbed and composite Revised PE was prepared for 229.68

crores and was submitted to Govt. of Delhi on 17.04.2008. Since both the projects were

inter-linked and the utility of completion of individual projects separately was not much

purposeful, the PEs of both the projects were clubbed in April, 2008 on cost index 236 [base

100 – 1992]. The main reasons for increase in PE amount were said to be as under:

• RE walls changed to stilt structure to avoid over burden on embankment of existing Road.


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• Depth of pile increased from 21 M to 35 M due to poor soil strata

The administrative approval and sanction for 229.68 crore was accorded on 31.10.2008.

10.5 Due to increase in scope of work and increase in cost indices during construction,

revised PE was further revised for 282.07 crores on 26.10.2010. The PE has been prepared

on actuals. The main items are as under:

• Addition due to incease in stilt area of main flyover

• Additional cost on road work on ramps for approach to main structure

• Escalation paid as per clause 10CCA

• Additional cost for slip road and cycle track

• Steel piers and pier cap changed to RCC pier and pier caps for longer life and to avoid

corrosion of the structure being in the vicinity of river bed.

Table 1: Project Details

# Name of the Division PWD: Delhi - Flyover Project Division F 123

1. Design and Structural Consultants M/s Mahendra Raj Consultants Pvt. Ltd

2. Proof consultant M/s Span Consultants Pvt. Ltd.

3. Tenders received on 23.02.2007

4. Lowest Contractor M/s. AFCONS Infrastructure Ltd

5. Awarded cost of contract 214.57 crore

6. Date of commencement 21.04.2007

7. Stipulation date of completion 20.04.2009

8. Actual date of completion 19.04.2010

9. Likely completion cost 282.00 crore


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SUMMARY OF FINDINGS

# Findings

1. Delay in decision making

The proposal was sent to DDA for its clearance in October, 2005. DDA Technical Committee had cleared the project on 03.07.2006. DDA took nine months in clearing the project proposal.

2. Deficiency in consultancy agreement

Consultancy agreement had no compensation/penalty clause which would have enabled the Department to exercise effective control over non - performance of the consultant as timely completion was the essence of the contract.

Payment to proof consultant was to be made by main consultant; therefore, the Department had no control on the activities of proof consultant.

3. Delay in fixing Third Party Quality Assurance Agency

There was a delay of about 10 months in fixing Third Party Quality Assurance Agency. During this period of 10 months, the service of TPQA was not available for quality control.

4. Escalation in cost due to delay in execution of work

An amount of 1.20 crore was paid to the contractor as ‘escalation’ amount for the delay in completion after 20.04.2009. Delays were due to shifting of services, cutting of trees. delay in issuing of drawings by consultant, acquisition of land etc.

Observations Grade Separator at Raja Ram Kohli Marg and Shastri Nagar Intersection at East Delhi

10.6 Above noted project was conceived by Public Works Department, Government of

Delhi in February 2005. The proposal was sent to DDA for its clearance in October, 2005 vide

no. 23 [18]/PM/PFP/2005-6/951 dated 04.10.2005. DDA Technical Committee had cleared

the project in its meeting held on 03.07.2006. Assuming reasonable time as three month,

there had been net delay of six months in clearing the project. Had timely action been taken

by the DDA technical Committee in clearance of the project, the project could have been

taken six months earlier. In that situation, the project cost would have been reduced.

10.7 There was delay of about 165 days in completion of the work due to delay in

submission of design by Consultant / Proof Consultant. Consultancy agreement had no

compensation / penalty clause so as to enable the Department to exercise effective control


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over non- performance on the part of the Consultant as timely completion of the project

was the essence of the contract. The Department could not take any action against the

Consultant for default. Further, payment to Proof Consultant was made through said

Consultant. In such a situation, the Department had no control over the activities of Proof

Consultant. The provision made in the terms and conditions of contract regarding payments

to Proof Consultant through the Consultant was not appropriate.

10.8 The main work was awarded to M/s. Afcons Infrastructure Ltd. on 12.04.07 and the

work of Third Party Inspection Agency was awarded to M/s. National Council for Cement

and Building Material [NCB] on 27.02.08 i.e. about 10 months after the award of main work.

During the intervening period [from 12.04.07 to 26.02.08], the services of TPIA were not

available to be utilized with the result the very purpose for fixing TPIA stood defeated during

the said period.

10.9 An amount of 1.20 crore has already been paid to contractor as escalation amount

for the delay in completion after 20.04.2009 [stipulated date of completion]. Had the inter-

departmental issues like acquisition of land, shifting of services and trees cutting been

resolved in time, the exchequer would have saved an amount of 1.20 Crore.

10.10 The following table shows the initial date of request made to the concerned agency

for removal of hindrances and the date when it was resolved.

Name of hindrance Concerned Department

When request made

Date of shifting / resolution

Time taken

Acquisition U P Irrigation Land

UP Irrigation Department

17.11.06 08.08.07 9 months

Tree cutting permission for 414 no. trees

Forest Department of Govt. of Delhi

20.06.07 15.03.08 9 months

Shifting of 11 KVA & 33 KVA Lines

BSES 31.07.06 (i) 11 KVA Feb.2008

(ii) 33 KVA May 2008

22 months

Traffic Diversion 25.07.07 08.10.07 3 month


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A perusal of above table shows that various agencies took considerably time in removal of

hindrances. Had these issues been resolved in time, the delay of one year in completion of

work would have been avoided.

10.11 There has been cost escalation of about 68 crore in this project. Reasons for the

same has not been analysed in this report.

Box 1: Delhi: City of flyovers

Friday, 16 October 2009 Promising world class road infrastructure in the national capital during next year's Commonwealth Games, chief minister Sheila Dikshit today said visitors of the showpiece event will remember Delhi as a city of flyovers.

Addressing a function after formally dedicating two new flyovers at South Delhi, Dikshit said she was confident of completing all the road infrastructure projects well in time which will provide uninterrupted connectivity in the city. "We are confident that the visitors during the Games would be able to carry a good impression about the city," she said adding that they will remember Delhi as city of flyovers.

http://commonwealthdelhi2010.blogspot.com/2009/10/delhi-city-of-flyovers.html�

http://4.bp.blogspot.com/_i2aQboggywk/SuhIuQJ8BCI/AAAAAAAAALo/GQ-6OIKn1ss/s1600-h/Flyover+Delhi+.jpg�


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Chapter 11: Construction of 3 level grade separator at Ghazipur crossing on NH – 24 bypass & road No. 56 at Ghazipur on NH – 24 Delhi

SALIENT FEATURES 11.1 The work of Construction of 3 level grade separators at Ghazipur crossing on NH – 24

bypass & road No. 56 at Ghazipur on NH – 24 Delhi is an infrastructure project not directly

related to Commonwealth Games – 2010. However, its progress was monitored along with

CWG related projects. The project was conceived by Public Works Department, Government

of Delhi. The project was approved by DDA Technical Committee in its meeting held on

01.02.2007. The project was also approved by DUAC vide no. 19(7)/2007/DUAC dated

13.07.2007. Thereafter, Preliminary Estimate was prepared and submitted by CE [Flyover

Project F – I] to Principal Secretary, Govt. of Delhi on 15.10.2007.

11.2 Initially, PE was framed in 2007 for 198.47 crore based on conceptual drawings.

Revised PE for 242.53 crore was submitted on 07.02.2008. After correction, PE for 245.73

crore was submitted on 11.03.2008. A/A&E/S was accorded for 245.53 crore vide No.

3(11)/Fly./2007-08/PWD-III/82 dated 15.04.2008.

Table 1

# Name of the Division PWD: Delhi - Flyover Project Division F 121

1 Design and Structural Consultants M/s Tandon Consultants Pvt. Ltd.

2 Proof Consultant M/s Construma Consultancy Pvt.Ltd.

3 Tenders received on 15.1.2008

4 Lowest Contractor M/s. AFCONS Infrastructure Ltd

5 Awarded cost of contract 199.79 crore

6 Date of commencement 01.05.2008


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7 Stipulation date of completion 30.04.2010

8 Present Status All the components of the project i.e. Flyover, Underpass, Surface Rotary and all the 8 No Slip Roads were completed for use of traffic on 29.06.2010 except Foot Over Bridge [FOB]. Foundation work of FOB also completed before CWG-2010. FOB could not be completed because of failure of similar bridge near JLN Stadium

9 Likely completion cost 215.00 crore

11.3 There was escalation in cost due to delay in shifting of services from work site by

various departments.

Observations 11.4 The project was scheduled to be completed by April 2010. The project is still in

progress. All the components of the project i.e. Flyover, Underpass, Surface Rotary and all

the 8 slip roads were opened for use of traffic on 29.06.2010 except Foot Over Bridge

[FOB]. Foundation work of FOB was also completed before CWG-2010.

11.5 An amount of 1.97 crore was paid to contractor as ‘escalation’ amount for the delay

in completion after 30.04.2010 [stipulated date of completion]. The escalation amount

would also become payable on the balance work yet to be executed. Cost overrun for the

work yet to be executed is not quantifiable at this stageI.

11.6 The following Table 2 shows the initial date of request made to the concerned

agency for removal of hindrances and the date when it was resolved.

Table 2

S.No. Name of Hindrance Concerned Deptt.

When request made

Date of final shifting/ Resolution

Time taken

1 Acquisition of land from DDA DDA 08/2007. 10/2008. 14 months 2 Shifting of IGL Gas pipe line IGL 04.07.2007. 03.11.2008. 15 months 3 Permission from Delhi Traffic Police Delhi Police 23.02.2008. 27.08.2008. 6 months


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11.7 A perusal of above Table shows that various agencies took considerably time in

removal of hindrances but overall, it has delayed the work by two months. Had these issues

been resolved in time, the delay of two months in completion of work could have been

avoided.

11.8 There has been cost escalation of about 15 crore in this project. Reasons for the

same have not been analysed in this report.

4 Shifting of 66 KV line on High Tension Towers (Along road No. 56 & Kalyan Puri Road.

BSES 01.10.2007 29.12.2008 14 months

5 Shifting of 66 KV line on High Tension Towers (Along NH-24)

BSES 02.08.2007 22.04.2009 21 months

6 Shifting of various 11 KV line in the whole project area

BSES 10/2007. 12/2008. 15 months

7 Shifting of SW Storm water drain of DDA 1000 mm dia

DDA 20.09.2007 30.09.2009 24 months

8 Shifting of Sewer line of DDA 900/1000 mm dia

DDA 23.02.2008 10.06.2009 9 months

9 MTNL MTNL 05/2008. 10/2008. 5 months 10 Shifting of sewer line of Delhi Jal

Board 1000 mm dia DJB 05.02.2008 05.02.2009 12 months

11 Shifting of sewer line of Delhi Jal Board 900 mm dia

DJB 11.02.2008 05.02.2009 12 months

12 Shifting of 300 mm dia water pipe line

DJB 06/2008. 30.09.2008 4 months

13 Shifting of OFC cable of Indian Army

Indian Army 06/2008. 10/2008. 5 months

14 Shifting of OFC cable of BSNL BSNL 10/2008. 02/2009. 5 months 15 Shifting of religious structure Govt. of

Delhi 23.08.2007 06/2008. 10 months

16 Acquisition of land from Irrigation and Flood Control Deptt. (Govt. of Delhi)

Irrigation and Flood Control Deptt. (Govt.of Delhi)

04/2008. 08/2008. 5 months

17 Tree cutting permission Forest Deptt.

13.12.2007 09.05.2008 5 months

18 Shifting of 300 mm dia water line on Slip road No. 7

DJB 20.07.2009 10.09.2009 2 months


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Chapter 12: Millennium Park Bus Depot Project Overview 12.1 Development of DTC Bus parking at Millennium Park mainly involved civil & electrical

work related to construction of boundary wall, other facilities, road work, development of

site for Baggage Scanning Machine, and development of semi permanent structure type

Building at parking lot for DTC including provision of fire fighting equipment, sewerage

treatment plant and sand piling for stabilizing soil

12.2 The total cost of the project (Preliminary Estimate) and the expenditure sanctioned

amounted to 60.9 crore. Out of this, sanctioned expenditure for the civil work amounted

to 48.73 crore against which contracts were awarded for 42.18 crore.

12.3 Estimated time period for completion was 6 months. The project was officially

handed over to DTC on 17th September, 2010. 5% of the total work is still incomplete.

Financial Details

Contract for building work related to Construction of Boundary Wall and other facilities, Road work for parking of DTC buses

Particulars Details/Amount Date A/A & E/S 30.96 crore 18.12.2009

Technical Sanction 24.86 crore Estimated time period 6 Months L1 Bidder Details M/S Suraj Bhan Goel & Co at

23.64 crore (14.14% above the estimate cost put to tender)

Appointment of Contractor (M/S Suraj Bhan Goel & Co)

23.64 crore 18.12.2009

Actual status on completion 95% work complete and site handed over to DTC for use

Contract for Additional Building work related to Boundary Wall and other facilities, Road work for parking of DTC buses

Particulars Details/Amount Date A/A & E/S 10.28. crore 04.09.2009

Technical Sanction 9.89 crore Estimated time period 6 Months L1 Bidder Details M/S C.P Arora Engineering Contractor (P) Ltd at

7.21crore (5.01% below the estimate cost put to tender) Appointment of Contractor (M/S C.P Arora Engineering Contractor (P) Ltd)

7.21 crore 07.09.2009


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Contract for Development of DTC site for Baggage Scanning Machine for CWG


Technical Sanction 5.66 crore Estimated time period 6 Months L1 Bidder Details M/S Chaudhary

Construction Co at 4.30 crore (3.22% below the estimated cost put to tender)

Appointment of Contractor (M/S Chaudhary Construction Co)

4.30 crore 17.11.2009


Contract for development of Semi Permanent Structure type Building at parking lot for DTC (Provision of Fire Fighting Equipment, Sewerage Treatment Plant and Sand Piling for Stabilizing

Soil for CWG DTC bus parking


Technical Sanction 8.33 crore Estimated time period 4 Months L1 Bidder Details M/S Rama Construction Limited

at 4.34 crore (1.5% below the estimated cost put to tender)

Appointment of Contractor (M/S Rama Construction Limited)

4.34 crore 30.04.2010


Contract for development of parking lot for DTC for CWG: Additional Bituminous Work

Particulars Details/Amount Date A/A & E/S 10.28. crore 04.09.2009

Technical Sanction 2.90 crore Estimated time period 45 days L1 Bidder Details M/S Gupta Construction Limited

at 2.70 crore (8.69% above the estimate cost put to tender)

Appointment of Contractor (M/S Gupta Construction Co)

2.70 crore 16.05.2010



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Land Use

12.4 The change in land use has still not been approved by DDA.

Summary of Findings 12.5 There was lack of conceptual clarity between the GNTCD, DTC, DDA & PWD for the

legacy use of this site. PWD prepared 5 estimates for construction of bus parking, however

the specifications & estimates for 4 of these estimates were prepared on assumption that bus

parking would be of a temporary/semi-permanent nature but one estimate for additional

bituminous work was prepared with specifications assuming the bus parking would be of a

permanent structure.

12.6 M/S Rama Construction Limited was appointed for Development of Semi Permanent

Structure type Building on 30.04.2010 though AA/ES was conveyed on 25.05.2010. Incurring

liability before receipt of sanction was not in order.

Legacy Use

12.7 There was lack of conceptual clarity between the GNTCD, DTC, DDA & PWD for the

legacy use of this site. PWD prepared 5 estimates for construction of bus parking, however

Box 1: A permanent or temporary structure?

A major point of dispute in the construction of Millennium Bus Depot is whether it was to be constructed as a ‘temporary’ structure or a ‘permanent’ structure.

All clearances were provided by the Lieutenant Governor for construction of a ‘temporary’ structure which was ostensibly to be dismantled after the conclusion of the Games. But this project was implemented by the Transport Department, GNCTD and DTC right from the beginning as a ‘permanent’ structure.

It appears as if the hosting of CWG provided a pretext for ‘land grab’ by various Government Agencies after short circuiting the established rules and procedures.


184

the specifications & estimates for 4 of these estimates were prepared on assumption that

bus parking would be of a temporary/semi-permanent nature but 1 estimate for additional

bituminous work was prepared with specifications assuming the bus parking would be of a

permanent structure. Legacy use of this site is still pending to be settled.

Chronology of events on legacy use of the site

Events Date

Letter from DDA to DTC about option of 3 sites available for temporary bus parking for CWG 2010

29.01.2009

Chief Secretary conducted inspection of I.P Power Station & Raj Ghat Power Station and decided to direct PWD to construct bus parking in both the identified areas

01.06.2009

DTC sent letter to IPGCL to hand over the land to PWD (16 acres & 13 acres land near I.P power station and Raj Ghat Power station respectively)

04.06.2009

Letter from Chief Secretary deciding that another land for 14.3 acres should also be earmarked for installation of baggage scanning machines

03.08.2009

As per minutes of EFC meeting amount sanctioned for 10.49 crore without mentioning whether bus parking will be of temporary nature or permanent nature

24.08.2009

Letter from DTC to Pr. Secretary (GNTCD) suggesting that Govt. may consider transferring this land (measuring 14.3 acres) to DTC on permanent basis, so facilities may be created accordingly (Reason given included that said plot is adjacent to bus parking facility being created for secured parking of athlete buses meant for CWG and the plot for X-ray Baggage Machine can be clubbed with the bus parking lot by constructing a road, thus making the entire plot as bus parking plot after the Games are over and further that DTC is in dire need of space required for bus parking from existing fleet of 3500 buses to 6000 buses; so these plots can be utilized for a permanent DTC bus parking)

25.09.2009

Letter from Dy Secretary (GNTCD) for temporary transfer of land measuring 14 acres and 15 acres to DTC

30.09.2009

As per minutes of EFC meeting amount sanctioned for 7.95 crore and it mentioned that developed site will be utilized by the DTC later on as bus depot for parking of buses

12.10.2009


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Noting from Chief Secretary recommended for transfer of additional 34 acres land on temporary basis for developing bus parking

13.10.2009

Letter from IPGCL transferring the additional land for 34 acres to DTC 28.10.2009

In notes of Planning department it is documented that land would be given to DTC on temporary basis

24.11.2009

Letter from Dy. Secretary (PWD) asking Transport department to confirm whether approval of DDA for change in land use would be required or not. Transport department may also confirm whether IPGCL can on their own allot their ash pond for a purpose other than that has been permitted under the land use rule

04.12.2009

Letter from CE (PWD) to Chairman DTC mentioning that PWD assumes that bus parking would be used by DTC for bus parking and asset will be transferred to DTC after CWG 2010

04.12.2009

Letter from DTC to Dy Secretary (PWD) mentioning that present land use is of public utility services and proposed activity for parking of athlete buses is also covered under public utility services. Hence, change in land use at this stage is not required. (This was not supported by any MPD provision)

07.12.2009

As per observations of Finance Department, PWD stated in letters that land would be used subsequently for bus parking by DTC. However, no communication has been received from DTC on this nor the proposal of Chief Secretary indicate any such decision for subsequent use of land & the developed facility

08.12.2009

As per minutes of EFC meeting amount sanctioned for 30.96 crore and it mentioned that land is in possession of GNTCD and is temporarily transferred to Transport Department. It also mentioned that proposed infrastructure would be maintained and used by Transport department as legacy

09.12.2009

Meeting under chairmanship of LG and it was discussed that long term use of the site is a matter of debate. As per the Finance Minister, if DTC is not allowed to use the facilities later on, the investment of 61 crore would go waste. The Hon’able Lieutenant Governor had assured that in the event of DTC not being allowed to use the parking facilities at the site after CWG 2010, the entire amount on developing the site will be reimbursed by DDA.

18.12.2009

Detailed estimate for additional bituminous work mentioned that initially it was considered as temporary bus parking. Later, when it was seen that DTC will use it even after Games as depot cum workshop, estimate was prepared for providing additional bituminous crust

23.02.2010


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thickness

Letter from OSD to LG stating that bus parking is a temporary structure and will be completely removed after Games

07.05.2010

Extra Items 12.8 On an examination of the RA bills for the months of October and November 2010,

we observed that 4 contractors submitted bills amounting to 7.77 crore for extra items

that have been executed till date over and above the contracted items. This amounted to

approximately 19.6% of the total value39

of these contracts. This again reflects the

shortcomings in the preparation of original proposal /work estimates.

39 39.52 Crore


187

Chapter 13: International Broadcasting Centre & Main Press Centre in Pragati Maidan

Introduction: 13.1 India Trade Promotion Organization (ITPO) is an autonomous body (initially known as

Trade Fair Authority of India constituted in 1977 and renamed as ITPO in 1992 with the

merger of Trade Development Authority) under the Ministry of Commerce and has been

designated as the nodal agency of the Government of India for promotion of the country’s

external trade. ITPO has played a proactive role in catalyzing trade, investment and

technology transfer process. Its promotional tools include organizing fairs and exhibitions in

India and abroad, Buyer-Seller Meets, Contact Promotion Programmes, Product Promotion

Programmes, promotion through Overseas Department Stores, Market Surveys and

Information Dissemination.

Box 1: Executive Summary

The ITPO was provided with revised sanction amount of 75.77 crores on 15th January, 2010 to renovate some exhibition halls to serve as the venue for hosting International Broadcasting Centre and MainPress Centre for the CWG 2010. The essential works associated with this venue included renovation of ten halls, replacement of air-condition system, electric works, fire-fighting system, false ceilings, modification of food plaza. This amount also provided for an estimated amount of rent ( 10.82 crore) that could have been earned by the ITPO but for the exclusive use (April to October 2010) of the Halls for the CWG 2010.

ITPO engaged CPWD to undertake the civil and electric related work and balance was carried out by ITPO.

1. The HLC based on the analysis of the expenditure concludes that the ITPO had over-estimated the cost of renovation and finally ended up having an unspent balance amount of 25.90 crore as on January 2011. This should be refunded to the Ministry of Information & Broadcasting with interest.

2. Sale of scrap in the form of dismantled Air-conditioning system generated 2.40 crore, which ought to have been reduced from the total cost of renovation and refunded to the MOI&B. This amount has not been adjusted from the bills of CPWD.


188

Organization chart

Role in relation to CWG- 2010 13.2 Pragati Maidan was selected as the venue for International Broadcasting Center and

Press Center for Common Wealth Games 2010. For this purpose, various halls were reserved

in July 2007. These halls were initially reserved on ‘as is where is basis’ except for

undertaking some repair and maintenance work. The initial administrative

approval/sanction for this project was given by MoI&B on December 31, 2008 for 28.02

crore which included 5.95 crore for Electricity & Water subject to actual (See Annexure-13

A).

Box 2: Features of Main Press Centre

The MPC became operational on September 23 for the national and international Press. The largest Press Centre in the history of the Commonwealth Games had many world-class facilities for the visiting journalists. The centre was run by the Press Information Bureau (PIB).

The MPC was located at Hall No.12 and 12A in the Indian Trade Promotion Organization Complex at Pragati Maidan, New Delhi and was operational 24 hours from October 1 to October 15. Spread across 6,700 sq mts with Wi-Fi facility, it was expected to cater to about 2,000 journalists, including around 800 from overseas. It could accommodate 600 journalists at a time. The Workforce for the MPC and 18 venues included 236 professionals and 135 interns from Indian Institute of Mass Communication and 600 volunteers.

The host of other facilities included a 300-seat Press conference room and a Press Briefing Room which could accommodate about 100 people.

For food and recreation, the MPC had a media lounge with catering services, while a round-the-clock food court was located just opposite to the centre. In addition to that, the Retail Plaza inside the MPC had facilities like post office, convenience store, pharmacy, mobile store and a bank with foreign exchange service and ATM.

Source: Media Reports


189

13.3 Subsequently, the CMD (ITPO) requested (2nd September, 2009)40 for the revision of

the sanction and was provided (15th January, 2010)41 with a revised approval of 75.77

crore. The revision was discussed with Prasar Bharati [PB], Press information Bureau [PIB]

and Organizing Committee [OC] in the light of their requirements for replacement of AC

plants (for operation on 24x7 basis), hiring of DG sets and additional fire fighting

arrangements.

13.4 Funds were received through Prasar Bharati as under and these were deposited in

the Savings Bank account of ITPO:

• 11 crore on 26.02.2010

• 30 crore on 31.03.2010

• 34 crore on 21.09.2010

13.5 The summary of head wise sanction and contracts / expenditure shown is as under:

Head Sanctioned amount

( in crore)

Contract through CPWD

( in crore)

Through ITPO

( in crore)

Various expenditure 54.00 28.92 04.18

Rent,

Electricity, water

DG set hiring & fuel

10.82

05.95

05.00

Nil

Nil

Nil

10.82

05.95

Nil

TOTAL 75.77 28.92 20.95

As could be noted from the above table, the ITPO could utilize a total of 49.87 crores as on

21st January, 2011.

40 CMD (ITPO) request letter for the revised sanction 41 Administrative approval of MoI&B


190

Investigation approach 13.6 HLC sought to examine if the ITPO needed the sanctioned funds and whether it could

utilize the funds for the purpose for which it was allotted and whether there was any

wasteful expenditure and such other related issues in terms of the HLC mandate. The probe

was limited to the sanctioned amount of 75.77 crore.

Scope limitation

13.7 During the process of upgradation of Pragati Maidan premises, ITPO carried out

various works, which included renovation / modification of existing facilities. Many such

works are not susceptible to analysis after having been executed. For example, extension

works undertaken in the already existing building / roads / renovation of electrical

installations / horticulture work etc. To understand the pre-work status / position, we asked

for the photograph / video but neither photographs nor video was available which could

show the actual status existing prior to carrying out of the work. Moreover, in the absence

of monitoring reports in the ITPO, the Team of HLC faced difficulty in accurately assessing

the quantum of work actually carried out.

13.8 Furthermore, there was no Memorandum of Understanding (MOU) between Prasar

Bharati and ITPO to determine the scope of the work carried out.

Box 3: No cost overrun in CWG Main Press Centre

“The Union Minister of Information & Broadcasting, Smt. Ambika Soni today inaugurated the state-of-the-art Main Press Center (MPC) and International Broadcast Centre for Common Wealth Games 2010 at Pragati Maidan. Speaking on the occasion, the Minister said that MPC had been completed in the stipulated time and the project did not entail any cost overrun.”

-Monday, 20 September 2010 HLC has concluded after its probe that there was no question of cost overruns given the perfunctory manner in which the cost estimates had been revised upwards from 28.92 crore to 75.77 crore. The total expenditure on the project could not go beyond 49.87 crore even when ITPO wrongly billed electricity & water charges of 5.95 crore on the project.


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Findings

Excess amount not refunded to the Ministry

13.9 Based on the comparison of the sanction under various heads of expenditure with

what was spent / committed for payment, the HLC noted that the ITPO has retained 28.66

crore out of the sanctioned amount of 75.77 crore. This ought to be refunded to the

Ministry of Information and Broadcasting. The breakup of the savings is shown in the Table

below. (For full details, see Annexure 13 B)

Item particulars in crore

Expenditure on Hiring of DG sets and fuel, not incurred 5.00

Difference between contract values42 20.90 and provision

Sale value of scrap generated on replacement of AC/others 2.40

Difference between actual and provision for electricity charges43

1.39

Interest on funds ( 75 crore) with savings bank account44 0.37

Excess amount with ITPO 28.66

The unspent balance indicates that the works estimate prepared by ITPO was based on

incorrect premises and was ‘highly inflated’. The revised estimated cost was also not

properly scrutinised by the Ministry of Information & Broadcasting before funds were

released.

Over-estimation of requirement

13.10 The ITPO requested for the revision of estimates from 28.02 crores to 75.77 crore

based upon which the MoI&B accorded the sanction under 12 heads of expenses. It was

noted that even 4 months after the conclusion of the event, ITPO has not prepared any

statement comparing head wise expense. HLC therefore obtained relevant information and

compiled the approximate quantum of unutilized funds ( 28.66 crore) still lying with the

ITPO / CPWD. Clearly, the ITPO and the Ministry had not adequately considered the

42 Contract with CPWD envisages departmental charges which are not yet assessed. 43 Electricity difference is based upon sanctioned amount [ 5.95 cr] & actual electricity bill of ITPO for 7 months [ 4.56 cr]. 44 Interest on funds is calculated @ 3.5% only as prevailing in Savings bank account.


192

requirements based on normal estimation methodology used by CPWD and BECIL prior to

obtaining of the sanction. The sanction seems to have been obtained in an ad-hoc manner.

Value of scrap from Dismantled Air-condition plant 13.11 Based on the recommendation of the Committee formed by the Ministry of

Commerce, and to give effect to the intervention made by the Organizing Committee, Press

Information Bureau and Prasar Bharati to improve the AC system and maintain a

temperature of 22 degree celsius 24x7 inside the halls; it was decided to dismantle the

existing air-conditioning plant and replace it with a new one. The CPWD undertook the

replacement of AC system for which a separate tender was floated with a reserve price of

0.74 crore only but against which 2.40 crore was realized (28th April, 2010) by the CPWD.

HLC observed that no clause for disposing of dismantled material was specified in the

Administrative approval issued by MoI&B nor in the revised AA&ES issued by ITPO to CPWD

in this respect. The CPWD has retained this amount which needs to be credited to ITPO for

adjustment in the CWG related sanction.

Interest on CWG related funds 13.12 The actual amount of 75.00 crore received from the Prasar Bharati (MOI&B) in

three tranches was deposited in the savings account of the ITPO. ITPO received interest on

funds through their saving bank account / deposit scheme to the tune of 36.60 lac

(calculated @ 3.5% per annum). Moreover, the value of the AC plant scrap amounted to

2.40 crore which was not passed on by CPWD to ITPO and as such it lost the opportunity of

earning interest thereon.

Box 4: Weakness in System

The quantum of savings in this project (about 35%) against estimated cost is symptomatic of what was wrong with vitually all CWG related projects.

In the first instance, there is no proper preparation of estimates. This is followed by significant ‘upward revision’ of cost estimates and its approval by the competent authority. Finally the works are executed in a manner where the implementing agency, whether it is CPWD or BECIL, exercise hardly any ‘cost’ and ‘quality’ control.

HLC has come across several instances where work has been completed at significantly higher costs!


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Chapter 14: Naraina T-Point Flyover 14.1 A proposal for making a flyover at Naraina T-point sent to the Technical Committee

DDA, was approved on 16.11.2005. The width of the Ring Road at the Naraina T-point was

110 ft instead of 210 ft at other locations. Due to this the flyover got extended from T-point

Naraina to DGBR building at Naraina. The same was also cleared by the Technical

Committee, DDA.

14.2 The Preliminary Estimate for 125.28 crore prepared on 23.03.2006, was revised to

119.76 crore on 11.10.2006. A/A & E/S was conveyed on 08.12.2006 for 119.76 crore.

The completion time for the project was 30 months.

Financial Details

Award of contract for Construction of Flyover

Particulars Details/Amount Date Estimated Cost put to tender 65.76 crores 10.12.2006

Contractors who submitted the bid

1 Navayuga Engineering Co. Ltd 2 UP State bridge Corpo Ltd 3 Senbo Engineering Ltd. 4 Gammon India Ltd 5 Ranjit Construction Co. 6 Simplex infrastructure Ltd 7 Afcons Infracture Ltd 8 ITD Cementation India Ltd.

15.01.2007

L1 Contractor M/S Navayuga Engineering Co. Ltd

Bid Amount 98.13 crores (49.22% above the estimated cost put to tender) 15.01.2007

Justified cost 97.94 crore (48.63% above the estimated cost) Contract Award Details 97.91 crores 20.02.2007 Last bill amount 83.3 crore December 2010

Present Status Flyover is operational and is being used by public. However completion certificate has not been issued for want of completion of certain items including item of Noise Barrier


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Award of contract for Appointment of Structural Consultant

Particulars Details/Amount Date

Consultants who submitted the bid

1 Stup Consultants P Ltd. 2 Construma Consultancy Pvt Limited 3 Arch Consultancy services pvt. Ltd 4 Mahendra Raj Consultants Pvt Ltd. 5 Holtech Consulting Pvt. Ltd 6 Distinct Planning and Design consultant Pvt

Ltd. 7 Engineering & planning Consultants 8 Consulting Engineering Services (India) Pvt.

Ltd 9 Span Consultants Pvt. Ltd. India 10 Zaidan Leeng (India) Pvt. Ltd 11 Consulting Engineers Group Ltd. 12 Secon Pvt Ltd

15.04.2006

L1 Consultant M/S Holtech Consulting Pvt. Ltd bid amount Rs 24.24 lac (excluding service tax)

Award 24.24 Lac + ST 19.07.2006 Justified cost Stated to be within the norms of CPWD manual Last bill amount 21.83 lac March 2010

Award of contract for Appointment of Proof Consultant

Particulars Details/Amount Date

Agencies who were invited to submit the bid

1 Delhi college of Engg. 2 Central Road research institute 3 IIT Roorkee 4 Engineers India Limited

Agency who submitted the bid 1 IIT Roorkee 2 Engineers India Limited

Lowest Bid 120 lacs (excluding service tax)

of M/S Engineers India Limited

Award 120 Lac + ST 03.10.2007

Justified cost Stated to be justified

Last bill amount 1.77 crores April 2010

Present Status Completed 31.3.2010

Summary of Findings 14.3 The work of Construction of Nariana T-Point flyover was to be completed by

13.12.2008 and is still in progress due to certain delays. These delays would have been

avoided had the matter regarding removal of such hindrances were taken up with

appropriate authority in time i.e. the Monitoring Committee functioning under the


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Chairmanship of Chief Secretary, GNCTD. If these delays had been avoided, the exchequer

would have saved 6.89 crore.

14.4 No negotiations were done with M/S EIL on the provision of minimum payment of

5 lacs per month. Non-linking of the said minimum payment with the actual progress of

work at site has resulted in an additional payment of 62.7 lac without any benefit to the

exchequer. This would have also ensured the Third Party Quality check for the work of

8.45 crore executed after 31st March 2010.

Observations Delay in Project

14.5 Project of Construction of Flyover was scheduled to be completed by 13.12.2008.

However the work is still in progress. The flyover has been made operational for use by

public. A delay of 739 days till Dec 2010 was observed mainly due to following reasons:

Reason for Delay No of days

attributable to delay

Remarks

Casting Yard - Change in location & Dismantling , removing of material from Wazirpur casting yard and handing over

140 days Could have been avoided by taking the matter timely with DDA

Non diversion of Traffic

349 days

Could have been avoided by coordination with Delhi Police and Defense personnel

Obstruction due to HT Tower and HT Lines 65 days

Could have been avoided by taking up the matter timely with NDPL

Non availability of nuts and bolts as per galvanization specification 24 days

Non availability of material conforming to specifications

Change in Design pile foundation

7 days

Could have been avoided by proper liaisoning with Structural Consultant

Delay in issue of drawings for super structure curved portion RHS A1 to P12 16 days

Could have been avoided by proper liaisoning with Structural Consultant

Car parking and land scraping below the flyover 104 days

These are additional items awarded at a later date, Advance Planning would have avoided this delay

Weather and National Holidays 34 days As per actual


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Had the delays mentioned above been avoided, the project would have been completed by

December 2008 and the exchequer would have saved 6.89 crores as detailed below:

Particulars Amount

Lease Rent payable to DDA for extension of lease by 2 years for land for casting yard

0.34 crore

Escalation cost payable to contractor after the scheduled completion date i.e. 13.12.2008

5.65 crore

Extension of contract of Third Party inspection agency for 11 months due to delay in construction of flyover

0.63 crore

Extension of lease rent for local acquisition of land 0.27 crore

Total 6.89 crore

Excess Payment to M/S EIL

14.6 M/S EIL was appointed as Third Party Inspection Agency for a contract amount of

120 lacs based on minutes of meeting of Delhi Works Advisory Board held on 12.09.2007 for

a period of 21 months. The contract provided payment to M/S EIL a minimum of 5 lacs per

month for the scope of work entrusted to them. During the Consultant Appointment

Committee meeting held on 10.07.2009, it was stated that due to various hindrances only

about 60% of the work was completed and it was decided to extend the work order of M/S

EIL to March 2010 i.e. for another 11 months at the same rates, terms and conditions.

14.7 Contract provision of minimum payment of 5 lacs per month to the consultant

without linking it to progress of work was not in order. The offer of M/S EIL should have

been negotiated in the beginning itself, especially with regard to minimum payment of 5

lacs per month, and the same should have been linked with actual progress of work at site.

This resulted in re-negotiation of the contract and additional payment of 62.7 lacs (11

months *5.7 lacs) for the scope of work which was already included in the contract amount

of 120 lacs.


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Chapter 15: Main Findings 15.1 The major findings of the HLC are presented in the succeeding paragraphs. The

findings are divided into two parts, viz, “General Observations” relating to policy and

governance issues, and “Specific Observations” relating to the 13 projects taken up for

detailed scrutiny.

General Observations

Absence of Planning 15.2 GNCTD was well aware of the fact that it had supported India’s bid for hosting the

XIX Common Wealth Games and was one of the signatories to the Host City contract signed

in November 2003. It had enough time to undertake comprehensive planning of the

infrastructure projects and put in place a responsive and accountable institutional

mechanism for implementation and interagency coordination within a specified time line,

and devise an effective mechanism for review, intervention and course correction. There is

no evidence to support that GNCTD did any of these.

Ad-hoc selection of projects 15.3 The list of 76 projects was not finalized in advance and as a part of a plan. The

projects were identified and approved at different points in time. If at all the projects had

been part of an overall planned design, all the projects would have been under review since

the first meeting of the Empowered Committee. In the first review, only 11 out of 76

projects were reviewed, two of them being directly related to the Games Project (tunnel

project, subsequently changed to Barapullah elevated corridor and Ring Road bypass). Some

other important Games related projects(e.g. coverage of Sunehri and Kushak nallahs,

Sewanagar RUB, Bus Parking at Safdarjung Airport) were reviewed for the first time by the

Empowered Committee only in its 12th meeting on 1.9.2008, while some others.(e.g,Bus

Parking opposite Millennium Park) in the 21st meeting on 30.11.2009

15.4 Many projects were reviewed and pursued for a considerable time, some of which

were eventually abandoned (e.g. East West corridor, Mahipalpur bypass, signal free

intersection at Noida More); some others, though undertaken and completed are not


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included in the two lists given to the HLC (e.g., improvement of Connaught Place and Gole

market areas, corridor improvement at ISBT Ananad Vihar, and widening of Minto Road).

15.5 The facts stated above clearly suggest that no comprehensive plan was drawn up for

Games related projects. GNCTD followed an ad hoc approach in selection of the projects,

some of which were highly ambitious projects, and had to be abandoned mid way for a

variety of reasons. Projects got added or deleted from the scheme of GNCTD depending

upon changing perception of the needs, priorities, and exigencies of different situations. The

76 listed projects can, therefore, be considered, at best, as those ‘executed’ rather than as

‘planned and executed’.

Inadequate preparation 15.6 All projects require a host of preparatory actions before the start of the project on

ground, such as securing availability of site after getting all the statutory clearances,

appointment of consultants, preparation and approval of design and cost estimates,

prequalification of contractors, preparation of bid documents, invitation of bids, and award

of contract. These actions have to be initiated well in advance as they take considerably long

time. For major projects (e.g Barapullah elevated corridor, Ring Road Bypass, coverage of

Sunehri nallh), at least a year’s time was required for preparatory action alone. Allowing a

reasonable period of 2 years for project execution, major projects ideally require a period of

3 years in normal course for completion. After allowing a year or a year and half for

preparation for major projects, the work should have started during the year 2005-06.

15.7 It is, however, seen from the demand for grants for various years that the GNCTD

made practically no preparation for the Games between the years 2005-06 and 2007-08,

during which budget provisions were consistently surrendered and very little actual

expenditure was incurred. The table below indicates agency-wise provisions and

expenditure exclusively on Common wealth Games Projects.

Year Departments Total

GNCTD MCD NDMC DJB DHS

2005-06 BE 200.00 0.00 0.00 0.00 0.00 200.00

RE 30.00 0.00 0.00 0.00 0.00 30.00

Actual 20.00 0.00 0.00 0.00 0.00 20.00


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Year Departments Total

2006-07 BE 80.00 0.00 0.00 0.00 15.0 95.00

RE 10.64 20.50 0.00 9.75 0.03 40.92

Actual 9.89 20.50 0.00 9.75 1.54 41.68

2007-08 BE 107.00 30.00 7.00 27.00 9.00 180.00

RE 75.00 30.00 7.00 0.55 0.02 112.57

Actual 71.44 50.00 7.00 0.11 0.01 128.56

2008-09 BE 484.00 40.00 7.00 14.00 0.02 545.02

RE 1117.00 175.00 7.00 8.53 0.00 1300.53

Actual 1077.00 175.00 7.00 5.53 0.00 1264.53

2009-10 BE 1420.00 200.00 7.00 15.00 7.17 1649.17

RE 1275.00 371.00 27.00 45.00 0.50 1718.50

Actual NA NA NA 0.00 0.42 NA

2010-11 BE 879.00 225.00 15.00 15.00 10.00 1194.00

RE NA NA 0.00 15.00 NA

Actual NA 0.00 NA NA

Total1 3332.33 841.50 56.00 60.39 16.97 4307.19

1 Sum of expenditure as per actual or RE/BE provisions, where actual expenditure is not available

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

BE

RE

Actuals

Budget Provisions and actual Expenditure


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15.8 There was a rush of expenditure on CWG projects between 2008-00 and 2010-11

when the PWD’s overall spending peaked to almost three and half times the spending level

in the year 2004-05 and CWG projects had the lion’s share in the overall spending. The Table

below illustarates this.

Table 1: Budget- Expenditure on Roads and Bridges for PWD

(Source: Finance Accounts of GNCTD for respective years)

Year Budget Provision1 for all roads & bridges works( crore)

Expenditure2 on all works (CWG projects)( crore)

2004-05 218.10 486.55

2005-06 405.50 538.18

2006-07 535.00 789.35

2007-08 843.00 621.82

2008-09 915.00 1117.79

2009-10 1470.90 1934.98

2010-11 1630.00 1222.79 (upto

Feb.2011)

1 As per original grant 2 As per actual expenditure

This is presented graphically below

0

500

1000

1500

2000

2500

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11


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15.9 A three-fold increase in its work load seriously constrained the PWD. Though GNCTD

restructured the Department by creating posts of 3 Chief Engineers and 7 Superintending

Engineers in 2006 by abolishing certain lower level posts, it is observed that this

intervention did not improve the capacity of the Department to properly handle the

increased work load in the last 2 and half years preceding the Games.

No special preparation by GNCTD despite constrained time frame 15.10 Even though GNCTD was aware that the work load during the last couple of years

before the Games had increased two-three fold of PWD’s normal capacity, all it did was to

create 3 posts of Chief Engineers and 7 posts of Superintending Engineers in 2006 by

abolishing certain lower level posts. This was not enough and, given the short time frame

available for preparation and implementation of works as well as the limitation in the in-

house capabilities, some systemic changes should have been introduced. These innovations

could have been, for example, (a) bundling the projects into larger projects to reduce the

number of contracts to be supervised and monitored; (b) to dispense with the system of

item rate tendering, which requires the Department’s consultant to prepare the tender

design, a time consuming process, and follow instead a design build system, wherein the

design responsibility shifted to the contractor; (c) study and adopt some best practices in

procurement and implementation while maintaining the transparency and accountability of

the system. Unfortunately, no thought was given to these aspects and the work agencies

were left to follow the routine procedures.

Response of Work Agencies 15.11 It was left to the implementing agencies to follow the routine procedures to ensure

completion of the projects before the Games by making compromises that impacted

transparency and cost. PWD continued to follow the routine procedures; MCD introduced

some half-hearted innovations / changes, as briefly outlined below:

(i) The routine pre-qualification procedure, was followed despite the mismatch between

the number of projects (which were rather large) and number of prequalified

agencies (which was rather small), which would compromise with competition. A

panel of prequalified contractors, valid for 3 years, is prepared for two categories of

works, viz., building works and bridges and flyovers, in two cost ranges viz., 60 to

100 crore and more than 100 crore. In the bridges and flyover of more than 100


202

crore category, there were 13 pre-qualified contractors while the projects on offer in

that category were 12. The competition was thus seriously limited. The routine

prequalification should not have been followed in the special situation of the CWG as

the scale of PWD’s operation was almost twice of routine operation and PWD should

have resorted to ‘project specific prequalification’, but it was not done ostensibly

on grounds of saving time and meeting the dead lines .

(ii) PWD followed the system of ‘item rate tendering’ based on a design prepared by a

consultant appointed by PWD but gave very little time to the Consultants to prepare

a proper design and BOQ. In major projects like Barapullah and Ring Road bypass,

only 2 months time was available for preparation of BOQ, which is grossly

inadequate.

(iii) ‘Design Build System’ was not considered by PWD at all. MCD followed this approach

in Sunehri nallah project, though without providing adequate checks and balances.

(iv) Preparation of cost estimates for seeking AA&ES was not based on detailed project

reports, but on similar contemporary works awarded. Theoretically, this reflected

market rates. However, the tenders were mostly higher than the approved cost, and

the higher tenders were ‘justified’ post opening of tenders on the basis of market

rate analysis. This process is not transparent and is prone to be misused for

accepting or rejecting a high tender.

(v) Even though composite projects were got approved, the project was split into

smaller packages. Instead of bundling the smaller contracts into larger packages to

attract bigger resourceful firms and thereby effect economy of scale, better quality,

accountability, efficient project management and monitoring, PWD did just the

opposite, despite seeking approvals for a composite project. It split the projects into

two packages (Barapullah, Ring Road Bypass). MCD combined Sunehri nallah and

Kushak nallah into one package. Tenders for the split packages were approved by

Works Advisory Board without a question being raised about the splitting of the

projects.

15.12 Thus, it is evident that Principal Secretary, PWD did not intervene and took no steps

to bring in more efficiency and transparency while maintaining the project time lines,

despite the fact that the scale of operation had increased two fold and the time frame for

completion had been compressed.


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Period of inaction (2003-06)

15.13 The period of 3 years between end 2003 and end 2006 was a period of near total

inaction as far as the Games related infrastructure projects are concerned. Nothing

noticeable happened during this period, except that work on two bridges and fly overs viz.,

Geeta Colony bridge (See S.1/ Table 2 of Chapter 1) and ROB on Road No.63 (See S.N11/

Table 2 of Chapter 1) had commenced in the year 2005; Munak canal project was already

under implementation since 2003. In the year 2006, the only project launched was

Mukaraba Chowck fly over (See S.N.12/Table 2 of Chapter 1), and in addition two widening

and road resurfacing projects were undertaken. In the same year GNCTD constituted the

Empowered Committee headed by Chief Secretary for review of the projects, and in-

principle decision was taken to undertake two major projects figuring in the list of 76

projects, viz., Ring Road Bypass, and the tunnel project (subsequently changed into

Barapulla elevated corridor).Thus, by the end of 2006, the progress achieved was launching

of 6 projects (3 in 2005 and 3 in 2006) out of 47 projects and ‘in principle’ decision to

undertake 2 more projects. Clearly, the 3 years period passed with nothing much to show.

Works taken up in 2007 15.14 In the year 2007, about a dozen infrastructure projects commenced, and it would be

fair to assume that year as the commencement year of the infrastructure project by which

time about 18 projects had been launched. This stage of progress could have been achieved

in the year 2004 itself after allowing for a year’s time for preparatory activities since the

signing of the Host City Contract in November 2003,

Real Beginning is made 15.15 Even by the year 2008, work on 29 of the 76 projects remained to commence. Most

of these 29 works had normal gestation period of 1 to 2 years. There were at least 8 projects

for which the gestation period would normally be around 2 years (Barapullah Elevated

corridor, Ring Road Bypass, covering of Sunehri nallah, UP Link Road, corridor improvement

of Road No. 56, fly overs at Gazipur, Apsara border, and Road No. 68). These eight projects,

which were falling on critical routes, from the very outset, had a reasonable chance of not

getting completed before the commencement of the Games. This was largely due to delays

in decision making and completion of pre award of work formalities.


204

Fallout of ‘emergency’ conditions 15.16 As a result of delays, the implementing agencies had to make compromises with the

established norms and procedure. Contractors / suppliers extracted unfair cost advantage

due to these ‘emergency’ conditions and an environment conducive to ‘collusive bidding’

was created, overtly or covertly, and greatly limited the leverage of GNCTD vis a vis the

errant contractors.

15.17 Due to delays, in a majority of the projects, several compromises had to made, e.g.

(i) Tenders were invited and sometimes accepted before AA&ES;

(ii) Design consultants were given very little time for preparation of design, cost

estimates and bid documentation;

(iii) Unreasonable compression of construction time was done to meet the Games

deadline;

(iv) Instead of ‘work specific prequalification’ for high value projects, a general panel

of pre-qualified contractors were allowed to bid;

(v) The panel valid for three years was expanded from time to time without

specifying any frequency; and

(vi) High value projects were split into ‘two packages’ so as to enable the existing

prequalified contractors to bid.

Unfair cost advantage to contractors 15.18 Due to compressed time frame, the contractors quoted higher rates, which were

justified and contract awarded. The extra cost was necessitated only due to delays, which

were avoidable and, hence, it constituted a ‘loss’ to the Government. The contractors

gained because they did not adhere to the contractual completion schedule and improvised

to make the projects only functionally operational and not contractually completed

Likelihood of ‘Collusive Bidding’ 15.19 PWD invited tenders from prequalified contractors. There were 7 pre-qualified

contractors prior to December 2006 and three more were added in December, 2006.


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Subsequently, M/s.DSC was added to the list in May, 2008 and two more firms in

September, 2008. The list of pre-qualified contractors is shown below:

Table : List of Prequalified Contractors

# Prior to December, 2006 Added in December, 2006

Added on 19th May, 2008

Added on 22.9.2008

1 M/s Gammon India M/s ITD Cementation

M/s DSC*

M/s Valecha Persys JV

2 M/s Nava Yuga M/s IJM Infrastructure

M/s Senbo Engineering

3 M/s Larson and Toubro M/s Punj Lloyd

4 M/s UP State Bridge Corporation

5 M/s Hindustan Construction Co.

6 M/s AFCONS

7 M/s Simplex

15.20 If all the major contracts awarded for Projects of 100 crore or more by PWD/MCD

from the year 2005 onwards are tabulated, then the pattern becomes clear.

Table : Contracts for Projects costing 100 crore or more S.N. Name of Work Sanctioned Cost

( crore) Start date of contracts

Name of Contractor

1 Geeta Colony Bridge 129.07 Jan’05* M/s Valecha

2 Fly over at Mukarba Chowk

195.22 Sep’06* M/ AFCONS

3 Fly over at Naraina 119.76 Mar’07 M/s Navayuga

4 Fly over at Raja Ram Kohli Marg

230.00 Apr’07 M/s AFCONS

5 Fly over at Azadpur 153.60 Apr’07 M/s Navayuga

6 Fly over at Nelson Mendela / Vivekanand Marg

104.30 May’07 M/s AFCONS


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S.N. Name of Work Sanctioned Cost ( crore)

Start date of contracts

Name of Contractor

7 Corridor improvement of Road No. 56

200.00 Apr’08 M/s Valecha

8 Fly over at NH 24 bypass at Ghazipur

245.56 Apr’08 M/s AFCONS

9 Fly over at Apsara Border 226.47 Apr’08 M/s AFCONS

10 IGI Terminal Linkwork / storm water drain from Mahipalpur to Nazafgarh drain

171.00 Aug’08 M/s DSC

11. Barapullah Elevated Corridor

498.00+

51.00

Sept.,08 M/s DSC

Package I Sep’08 M/s DSC

Package II Sep’08 M/s DSC

12 UP Link Road 334.00 Oct., 08 M/s DSC

13. Ring Road Bypass 654.39 M/s Simplex

Package I Jan. 09

Package II Dec., 08

14. Bus Parking at Sunehri and Kushak Nallah

324.00 Nov’08 M/s Punj Lloyd

*Separate Prequalification done

15.21 The Table above reveals the following:

(i) The 14 projects (sanctioned cost 3519.37 crore) listed above comprised 16

contract packages,

(ii) 15 (sanctioned cost 3195.37 crore) out of the 16 packages were

implemented by PWD, GNCTD and the remaining (S.N.14 in the Table above)

by MCD.

(iii) Out of the 15 packages with PWD, separate prequalification was done for 2

packages (S.N. 1 and 2), leaving 13 packages (sanctioned cost 2871.08

crore) for which bids were invited from the list of prequalified contractors.


207

(iv) Out of the 13 packages, 7 (sanctioned cost 1474.91 crore) were awarded

during the period when the list of prequalified contractors contained 10 firms

(i.e. between December 2006 and April 2008): 4 packages (sanctioned cost

1000.51 crore) were awarded to M/s AFCONS, 2 packages (sanctioned cost

273.36 crore) to M/s Navayuga, and 1 package (sanctioned cost 200 crore)

to M/s Valecha.

(v) The remaining 6 packages (sanctioned cost 1708.39 crore) were awarded

during the period when the list contained 11 names (M/s DSC was added): 4

packages (sanctioned cost 1054 crore) were awarded to M/s DSC, and 2 to

M/s Simplex (sanctioned cost 654.39 crore).

(vi) Overall, 5 contractors bagged 15 contract packages of PWD, GNCTD, and 3

out of them (AFCONS, Simplex, DSC) hogged 11 contracts (sanctioned cost

2709.94 crore).

(vii) M/s AFCONS dominated the bidding during one period (between December

2006 and April 2008) and M/s Simplex together with the late entrant to the

prequalified list M/s DSC another period (between April 2008 and

September 2008).

(viii) It is noted that M/s Valecha were awarded the work on Corridor

Improvement of Road No. 56 worth 200 crore in April 2008 when they were

not a pre-qualified contractor in the ‘A’ category. It is also noted that M/s

Valecha were added to the list of pre-qualified contractors as a JV only in

September, 2008. This indicates that there was no consistency in policy

adopted by GNCTD.

15.22 It is striking that the value of projects assigned to M/s DSC, Afcons and M/s Simplex

is roughly of the order of 1000 crore each (after taking into account the two projects

awarded by NDMC – Shivaji Stadium45

45 In case of Shivaji Stadium, M/s Simplex secured the contract peudonymously through China Railway Shisuji Corporation for over

and Talkatora Indoor Stadium to M/s Simplex). It has

also been shown in the foregoing chapters of this report that bigger firms like M/s Gammon

160 crore – reported in the Report on Games Venues.


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India, Larson & Toubro and Hindustan Construction Company were kept ‘at bay’ in the

projects floated by PWD by dividing them into smaller packages. Thus, competition was

restricted and it appears that officers were complicit in awarding works to ‘favoured’

contractors.

Limiting GNCTD’s options 15.23 Having delayed the projects and simultaneously linking their completion with the

start of Games and not drawing up a contingency plan, GNCTD was left with no option but

to persist with the projects notwithstanding the serious implications and the fallout of

delays.

15.24 GNCTD delayed the start of the projects, though it was within its power to avoid

the delays. It failed to appreciate the grave implications of the delay and ignored the

implications of the delays as brought out above while giving approval to the projects and

accepting the bids of the contractors and their performance.

Ineffective monitoring mechanism 15.25 While the Empowered Committee made useful contribution in solving problems

relating to the GNCTD, it was found to be totally ineffective in solving interdepartmental

issues. Some of the examples, where reviews by the committee failed to solve the problems

are as follows.

1. The Ring road bypass proposal was rejected by ASI and DUAC, and was finally

cleared by them only in August 2007 (ref. Minutes of the 7th meeting) by which time

DDA’s clearance was still not available. There were issues pertaining to land

belonging to DDA, L&DO, MCD which remained unresolved until 1st of September

2008 (ref. Minutes of the 12th meeting). The tenders were awarded in two packages

as late as in December 2008 and Railways awarded their portion of work sometime

in May - June 2009. By the time of the last review on 12.08.2010, the progress

reported was 94% and 90% for the two packages.

2. The Tunnel project, which was being pursued with various agencies like ASI, DUAC,

DDA etc. since 2006 was changed from tunnel to an elevated corridor over

Barapullah nallah on the suggestion of DUAC in January / February 2008 and had to

be referred to GOM, which approved it in April 2008. A Structural consultant was

appointed in May 2008, the tenders for the main work were received on 25.072008


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and the contract finally awarded on 27.8.2008. By the time of the last review on

12.08.2010, the progress of the project was 95.5%.

3. UP link road from NH 24 (NOIDA more) to Chilla Regulator: The project was

reviewed for the first time in the 9th meeting (11.02.2008). DDA was supposed to

hand over some land to UP Irrigation Department, which in turn would have handed

it over to CEO Noida, and the latter would have then handed over the land required

for the project. It had been decided to refer the matter to COS. By the 11th meeting

(26.06.2008), the matter was neither resolved by DDA nor by Noida, nor any

reference was made to COS. Meanwhile the estimate for the work was sanctioned

and tenders called without the land issues having been settled. Even when the

contract was awarded on 26.09.2008, the land issue remained unresolved. The land

was acquired invoking emergency provision and full land became available on

29.01.2010, In the last review on 12.08.2010, the progress reported was 78 % and

the expected completion was in September 2010.

15.26 It is also seen that the Empowered Committee took up for review many projects,

which were eventually not part of the 76 projects listed in Table 1 and Table 2 of Chapter 1.

Time spent on review of these projects could have been better utilised for monitoring other

projects:

(i) Corridor Improvement at ISBT Anand Vihar and new Railway Station at Anand Vihar

(ii) East West corridor connecting Connaught Place area to East Delhi (iii) Mahipalpur and Masoodpur bypass (iv) Widening of Minto Road (v) Signal free intersection at Noida More (vi) ROB/RUB at Sultanpuri and Sarai Kale Khan (vii) Improvement of surroundings of New Delhi Railway station (vii) Construction 5 roads/ underpasses/ tunnels for dispersal of Airport traffic (viii) 200 bedded special ward in Apllo Hospital (ix) Road connecting Aurobindo Marg- Safdarjung Airport to Vinay Marg, parallel

to Railway line (x) Signal free junction at JB Tito Marg &Siri Fort Road (xi) Parking under Shaheed Bhagat SinghPark (Ambedkar Nagar BRTS corridor) (xii) Strengthening and raising of left D/S Guide Bund of Nizamuddin Railway

bridge (by PWD) (xiii) Strengthening and raising of right D/S Guide Bund of Nizamuddin Railway

bridge (by DDA) (xiv) Strengthening of Akshardham Bund (by DDA)


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15.27 It is also observed that Empowered Committee took up for intensive reviews many

highly ambitious projects, which had to be later aborted or abandoned. These are as

follows.

(a) Mahipalpur (and Masoodpur) bypass first remained stuck with AAI, whose ‘in-

principle’ clearance was obtained by Decemeber 2006 (ref minutes of the 3rd

meeting held on 18th December, 2006), and, thereafter, with DDA. The matter kept

on shuttling between DDA, PWD, DMRC, and consultants for a long time and was

finally dropped in the 15th meeting of the EC held on 30.01.2009.

(b) East West corridor was reported to be pending with DDA since September 2006.

DDA did not give clearance until 6th meeting (held on13.06.2007). A model was

submitted to DUAC on 31.08.2007. A structural consultant was appointed, who was

supposed to submit his report in December 2008. The project was proposed to be

integrated with Railways proposal and it was finally decided that the project be

funded under JNNRUM as the estimated project cost was about 3000 crore (ref

minutes of the 13th meeting held on 15.10.2008).

15.28 The unresolved problems were mainly with DUAC, ASI, Railways, L&DO, and DDA.

There was no effort to raise the level of interaction and take the matter to Secretary MoUD,

Secretary, Culture, GoI; Lieutenant Governor, Delhi, and Member/ Chairman, Railway Board.

There was also no effort to take up the matter in COS, GOM, or Cabinet in time for securing

appropriate directions to the concerned Ministries.

15.29 It is seen that the Empowered Committee was constituted too late in the day (in

October 2006). It took up for review several important projects after a considerable lapse

of time. It spent a lot of time reviewing projects, which were not figuring in the list (Table1

and 2 of Chapter 1), and which eventually were dropped. The level of intervention was

not raised for unresolved problems. Overall, the review by Empowered Committee was

not effective.

Absence of Plan B 15.30 Many major projects were getting delayed and the chances of their getting

completed before commencement of Games becoming increasingly doubtful, yet the

GNCTD did not have Plan B to deal with such situations. It did not really know as to how to


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deal with ‘non performing’ contractors – whether to terminate their contracts or persist

with them. In almost all cases, it chose the latter option. This meant that having awarded

the contracts, GNCTD was entirely at the ‘mercy of the contractors’ and could take no

punitive action against them for fear of non-completion of the projects before Games.

Similarly, where the bidders quoted high prices during the late initiated bidding process, the

implementing agencies were under pressure to ‘justify’ higher rates as retendering would

have meant loss of time and impacted on completion before the scheduled start of the

Games.

15.31 If only GNCTD had a cogent and well thought out Plan B, it could have chosen to

abort the projects or delink the projects from Games and pursue them as normal projects to

neutralize the likelihood of malpractices, and / or taken decision upfront and issued

appropriate guidelines to the implementing agencies / Departments about the manner and

extent to which the procedures / norms etc. could be relaxed in view of the tight time

schedule.

Box 2: Deadlines ‘fixed’ and ‘missed’ After a cabinet meeting on July 10, Dikshit had read out the guidelines - July 31 for finishing digging works, August 10 for removing debris from roadsides and August 31 for completing all works. Earlier in the day, when asked by reporters whether removal of the waste and rubble will be completed by today, Sheila said, “Debris has been removed to a very large extent. There is debris here and there..When you build a road or a house or a building, debris is bound to be there.” -Zee News Bureau Delhi CM sets August 31 as final deadline for all Games works PTI | New Delhi, July 9, 2010 | 21:22

At a high-level meeting to review preparedness of the city in hosting the mega sporting event, Dikshit made it amply clear that she will not tolerate any "blame game attitude" on part of any agency for delay in any project. "It was also decided that nothing should be left beyond August. The Chief Minister said Delhi should be completely ready by August 31," said a senior official. She also asked all the agencies to strictly comply with the deadline. Three major projects to miss Aug 31 deadline It seems the city will fail to meet the August 31 deadline, set by the chief minister herself, of completing the Commonwealth Games-related infrastructure projects. Senior Delhi government officials say, critical portion of work on at least three projects, the elevated road on the Barapullah drain, streetscaping along roads leading to the venues and renovation of the Yamuna Sports Complex, is still pending. Officials say they may take at least 7-10 days after August 31 to finish these three crucial projects. CWG: 4th deadline missed for venues New Delhi: August 31 was the fourth deadline set for the completion of the venues that will host Delhi's Commonwealth Games. It's not going to happen. No Deadlines now, Delhi to be ready before the CWG: Sheila Dikshit Posted by The Sports Mirror on Aug 30th, 2010 Delhi Chief Minister Sheila Dikshit admitted to the fact that the work for Delhi Games would not be complete in time, despite missing numerous deadlines, due to the heavy rains. “CWG work will be completed in 10-15 days within the end of monsoon. The work has been delayed due to the heavy rains”, Dikshit said in a press conference. After Union Sports Minister MS Gill, Dikshit too invoked God for timely completion of the unfinished Commonwealth Games projects.


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15.32 By not drawing up Plan B, GNCTD put the implementing agencies under pressure to

make compromises like ‘justifying’ higher tender rates instead of retendering, and

withholding action against errant contractors.

Manipulation in ‘Justification of Rates’ 15.33 Another shortcoming in the Tender evaluation process that has been observed in

almost all projects examined by the Teams of HLC is the evidence of ‘manipulation in

justification of rates’ with a view to avoid re-tendering when faced with unreasonably high

tendered costs. In all cases the ‘justified rate’ was prepared after the bids had been opened

with the sole aim to somehow award the work and avoid further loss of time in

‘retendering’. Even though this procedure of justification of rates has the sanction of the

CPWD’ Works Manual, this has great potential of being misused and abused to justify

tenders much higher than estimated cost by bringing them within the Manual-specified limit

(10% of the justified cost) for acceptance by manipulation.

Box 3 : Observations of CTE , CVC regarding ‘Justification Rates’ of some ‘City Infrastructure’ Projects

1. Elevated Road over Barapulla Nallah The estimate was approved on 30.07.2008 by the Govt. and technically sanctioned by the competent authority in July 2008. Approx.90% items in the estimate were calculated/analyzed on the prevailing market rate.The justification was also prepared in July 2008. The basic rates adopted in justification were enhanced for almost all the items which were adopted in detailed estimate. Thus it appears that the basic rates adopted in the justification were taken on higher side just to bring justification within the permissible limit. Hence the work was awarded by PWD on higher rates by 23% in both packages.

2. 3 level Grade Separator at crossing of NH-24 and Road No.56 at Ghazipur on NH 24, Delhi The justification of the tender was prepared on the basis of current market rate which worked out to 10.52% higher than the estimated cost. The rate quoted by L1 bidder was 5.42% more than the market rate justification. After negotiation, L1 bidder offered 0.60% discount and so the offer was worked out to4.79% above the market rate justification. DWAB accepted the tender for 199.79 crore which was 15.25% above the estimated cost.

3. Ring Road By-pass from Salimgarh Fort to Velodrome Road, Package –II, Delhi Artificial jacking up of justification to mislead the competent authority for facilitating award of tender at higher rates In labour rates extra 20 per person per day was included (for 100% labour) as transportation charges from labour camp to site of the work. These extra transportation charges were not justified since these are already included in the over-head components as per standard analysis of rates at Para 3(v) on page 3 of Standard Data Book for analysis of rates published by MORT&H. These charges amounted to 3.68 crore (approximately). Surprisingly, labour camps were allowed at the site which does not involve any transportation of labour. Higher rates of material and labour were considered. It was found that the basic rates of important materials and labour were jacked up to 36%. 25% extra on labour and machinery cost was added for works to be taken up in night shift which is not prescribed in standard data book for Analysis of Rates of MORT&H. 25% overheads was added on this 25% extra cost. Further, 10% profit was added on above extra cost for night working and overheads. This entire amount was unjustified which works out to about 25.84 crore.


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Specific Observations

15.34 The overview of the 11 projects selected for detailed scrutiny is presented in the

Table below:

# Name of Project Approved Cost ( in crore)

Date of AA&ES

Date of award of work

Contract Amount ( in crore)

Tender Premium (%) over

Name of Contractor

Project Owner

Estimated cost ( in crore)

Justified cost ( in crore)

1. Barapullah Elevated corridor Package I Package II

498.00 +51.00

26.08.’08 20.08.’08 218.79 214.92

23.05 23.09

4.84 4.72

DSC DSC

GNCTD

2. Ring Road Bypass Pacakage I Package II

654.39 05.05.’08

07.01.’09 05.12.’08

195.00 214.00

24.00 24.00

5.6 3.5

Simplex Simplex

GNCTD

3. Coverage of Sunehri and Kushak Nallahs

325.50 08.08.’08 19.12.’08 303.95 (-) 6.62 - ITD Cementation

MCD

4. Ghazipur Grade Separator

245.56 15.04.’08 09.04.’08 199.79 15.94 4.79 AFCONS GNCTD

5. Naraina T Point 119.76

08.12.’06 20.02.’07 Navayuga GNCTD

6. Raja Ram Kohli Marg 229.68

28.09.’06 30.03.’07

30.03.’07 214.57 46.78 4.41 AFCONS GNCTD

7. Streetscaping 269.00 160.00 25.10

01.04.’09 (consultancy)

07.01.’09 08.10.’08 (consultancy)

29.05.’09 to 31.03.’10

8 contracts for Rs 232.58 cr awarded in Oct’09 3 contracts for Rs Rs 65,14 cr awarded in Oct’09 12 contracts for Rs 26.51 cr awarded in Nov’r’10

GNCTD MCD NDMC

8. Street lighting 198.00 95.27 53.42

19.12.’07 30.07.’07 19.12.’07

19.03.’08 03.10.’08 01.07.’08 05.08.’10 29.07.’09

GNCTD MCD NDMC

9. Signages 72.00 3.25 18.90

Sept’07-Oct’09 May’08- Feb’09

Aug’08-Oct’09 Aug’08 Oct-‘09

3 contracts for 53.14 cr in Aug’’09 + Pilot project for

1.43 cr 7 contracts for 19.52 cr in May-Oct’09 + Pilot project for

0.43 cr

GNCTD MCD NDMC

GNCTD MCD NDMC


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# Name of Project Approved Cost ( in crore)

Date of AA&ES

Date of award of work

Contract Amount ( in crore)

Tender Premium (%) over

Name of Contractor

Project Owner

Estimated cost ( in crore)

Justified cost ( in crore)

10. Bus Parking at Millenium Park

60.00

5 contracts 0f estimated cost 52.03 crore awarded for 42.19 crore between September 2009 and May 2010

DTC DTC

11 Sewa Nagar RUB 26.00

MCD

Total 3053.83

Additionally, HLC has also reviewed Tourist Infrastructure projects and construction of

Media Press Centre at Pragati Maidan.

15.35 In almost all major projects, it was observed that the contracts were split into

packages. This tendency has been observed in City infrastructure projects as well as Games

Projects. Further, even after splitting, the packages went to the same contractor. Some

examples are the Ring Road bypass, Barapullah Nullah elevated corridor, Thyagaraja

stadium, Talkatora stadium, DU Games and Training Venues. This is suggestive of collusive

bidding by contractors and the officers turning a blind eye to this possibility.

Limited Legacy use 15.36 The HLC is of the view that the Barapullah Nullah elevated corridor, which was part

of Delhi Master Plan 1962 but was dropped in subsequent Master Plans, has limited legacy

value till a new bridge on river Yamuna linking East Delhi with this road and the portion

Box 4: Splitting of Project into two packages There was no justification for splitting the project into two packages. There are many firms in the country capable of handling projects worth 500-600 crore including some of the firms already prequalified (e.g. L&T, Gammon, HCC), who would have been in competition had the bids been invited in a single package. There was little incentive for big and resourceful firms to bid for relatively smaller packages in the range of 200-250 crore as they would not have been competitive. Moreover, splitting the contract into two would have meant coordination with two different contractors, managing the interface, and reducing the accountability of the two contractors. The failure of either of the contractors would have meant failure of the project, and hence two contractors did not per se guarantee timely completion of the project. It appears that the sole purpose behind splitting of packages was to limit the bidding to only the prequalified contractors and eliminating from the field big resourceful contractors, thereby provide undue benefits to the contractor as in all cases


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linking it to Aurobindo Marg as per PWD Plan are taken up and completed. As far as smooth

transfer of athletes and officials from the Games Village to JLN Sports Complex was

concerned, this could have been possible through effective traffic management.

15.37 There is no legacy use planned so far for the Sunehri Nallah proect constructed at a

cost of about 300 crore. After the use of the facility for 14 days during the Games, the

facility is lying unutilized and its revenue generating potential has not been exploited.

Tourist Infrastructure projects – non-starter? 15.38 It was observed that DDA used requirement of additional rooms for foreign tourists,

who were expected to visit Delhi during CWG over and above the normal tourist inflow in

October, to auction 33 hotel sites but did not care to put in place any monitoring system to

ensure that the successful bidders took steps in time to build the hotel projects. Only one

hotel could come up before CWG 2010.

15.39 The HLC noticed that as against the 27 meters AGL clearance obtained from the

Airports Authority of India for its stalled 1902 Vasant Kunj flats project (G+8) in April 2009,

the actual height of the flats is 30.80 meters AGL. DDA has, therefore, violated the

Box 5: Traffic Management during CWG 2010

Delhi Traffic Police decided to provide ‘dedicated CWG lanes’ on all identified routes from the Airport to the Games Village, Games Family Hotels and competition venues.

CWG lanes were marked with a distinct colour and Games Logo. These were to generally be on extreme right except on certain stretches. Delhi Traffic Police deployed adequate number of Traffic officers, Lane monitors, volunteers and motorcycle patrols to enforce lane segregation. Notification for a stiff fine of 2000 and/or impounding of vehicles was also issued apart from running an extensive awareness campaign through media.

These measures yielded good results and traffic movement during the duration of the Games was, by and large, smooth. Why the same system could not have been adopted for transporting athletes from the Games Village to JLN Sports complex instead of utilizing Barapullah Nullah elevated corridor remains unanswered.


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conditions laid down in AAI approval. This shows lax supervision of the project by officers of

DDA.

15.40 It was also noticed that the objective of making available 5009 rooms as

alternative tourist accommodation at the Vasant Kunj flats was not achieved. Only 778

rooms (or 15.5%) finally became available during CWG 2010. Public money has also

been squnadered in the ill-conceived attempt to furnish these flats to 3 Star level. ITDC,

the agency entrusted with the job of furnishing the flats by DDA, could not fully furnish

even the limited number of flats that became available. DDA officials must be held

responsible for this wasteful expenditure as they did not inform ITDC about the status

of flats that were to become available in time.

Improvement in “City Image” 15.41 With a view to refurbish the image of the city, over 700 crore was spent on

upgradation of streetlighting, streetscaping and signage in the city. Archaeological Survey of

India (ASI) had also undertaken works to upgrade facilities at important monuments and

heritage sites in the city. Delhi Tourism Development Corporation too undertook several

programmes aimed at providing better facilities to tourists.

15.42 Probe by the HLC teams has shown that the projects relating to streetlighting,

streetscaping and signage executed by PWD, NDMC and MCD could have been

implemented in a more ‘cost effective’ and ‘efficient’ manner. Over designing was noticed in

Streetlighting projects. The average lux level on most roads is way above the specified 35 lux

level. This involved higher capital cost of the project and will also result in higher energy

consumption and energy bills. Decision to use imported luminaries was also not justified.

Quality of streetscaping works undertaken in the run up to CWG is also not upto standard.

The work could have been executed at lesser cost. Same is the story with signage project.

Green Delhi 15.43 GNCTD undertook a well publicised campaign to have a ‘green’ Delhi in time for the

CWG. According to Government data, the Metro project involved felling of 4340 trees and

another 8000 trees for 30 flyover projects. Delhi Government had made it mandatory to

plant 10 trees for every tree that was cut for any infrastructure project. The Forest

Department has been entrusted the responsibility for compensatory plantation of DMRC,

BRT and NHAI. Officially, 18 city forests have come up in Delhi between 2007 and 2008.


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Even under the streetscaping project, a sum of about 40 crore was earmarked for

horticulture and plantation.

15.44 HLC has following observations to make regarding the plan undertaken by the

GNCTD to have a ‘green’ Delhi in the run up to CWG, 2010:

i. Exotic and expensive plant varieties have been planted which may not be able to

survive the weather extremes witnessed in Delhi;

ii. Like all other works, plantation of trees and plants was also done at the last

moment in a ‘hurry’;

iii. Tender conditions relating to maintenance of plants and their timely

replacement in case of mortality appear to have been largely ignored;

iv. The mortality rate of plants appears to be on the higher side.

v. Lack of proper planning and hasty execution has affected horticulture works

more than civil works and chances of expenditure being rendered infructuous

are high.

Poor Monitoring 15.45 It appears that in the race to complete a large number of CWG projects that were

initiated in haste by GNCTD, a major casualty was ‘effective and proper supervision’ of the

Projects. Lack of supervision by engineers as well as the Consultants may be blamed for the

collapse of the Foot Over Bridge near Jawahar Lal Nehru Stadium. Poor quality of other CWG

works cannot be discounted although HLC had no occasion to conduct an independent

‘quality audit’ of CWG projects. This seriously compromises the legacy value of a large

number of projects.


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Violation of Labour Laws 15.46 It has also been observed that labour laws were flouted with impunity on almost all

CWG projects. Despite Government making additional payments to the contractor on

account of likely expenditure on worker amenities, these were rather ‘denied’ rather than

‘provided’ by most contractors engaged in city infrastructure or other CWG projects. A

Public Interest Litigation was filed by PUDR in Delhi High Court (WP (Civil) No. 524/2010 in

People’s Union for Democratic Rights & 2 others Vs. Union of India & two others dated 3.2.2010)

and the case is still going on in the High Court. Government has admitted in Parliament that

109 deaths have taken place on various Games related projects.

15.47 On 3rd February, 2010, the Hon'ble High Court of Delhi, while considering a public

interest litigation filed by PUDR and two others relating to the working conditions of

building and construction workers in Delhi, primarily those at sites where construction work

was being carried out for the forthcoming Commonwealth Games (3-14 October, 2010) set

up a Monitoring Committee comprising of the following:-

• Shri R.D. Srivastava, Labour Secretary, Government of Delhi

• Shri A.K. Singh, Labour Commissioner, Government of Delhi

• Ms. Arundhati Ghose, former Indian Ambassador to the UN

• Shri Lakshmidhar Mishra, Special Rapporteur, NHRC

The Committee’s Report is in the public domain and highlights the ‘exploitation’ of labour by

Labour Contractors.

15.48 Some of the major findings of the Monitoring Committee are as under:

Wages: • It was difficult to confirm that minimum wages were being paid to all workers.

• Almost all the main contractors use ‘labour contractors’, often without verifying

their antecedents and the fact that whether they have obtained the licence

required under the Interstate Migrant Workmen (Regulation of Employment and

Conditions of Service) Act, 1979.


219

• The Labour Contractors and ‘thekedars’ recruit workers from villages where they

have some connection.The main contractor pays the 'thekedar' by cheque; in turn,

he disburses cash to the workers, reportedly in the presence of the principal

employer.

• This system is obviously open to abuse. The majority of the employers did not seem

aware of the provisions of the Interstate Migrant Workmen (Regulation of

Employment and Conditions of Service) Act, 1979 and the Rules framed

thereunder, making thereby the plight of the workers more vulnerable.

• In many cases the workers were not receiving overtime at all and wherever

received, it was single at the rate of ordinary wages as against the double the rate

of ordinary wages which is the statutory position.

• In large number of cases, there was no weekly off i.e. getting 7 days wages for 6

days of work.

• Workers were employed on daily wage basis and received payment only for the

days they actually work.

Health and safety:

• While most sites visited issued basic safety gear, it was common to observe that

the workers were not using boots or gloves.

• Wherever workers were found to be using boots, a sum of Rs. 300/- to Rs. 800/-

was reported to be deducted from the wages of some of the workers.

• Most of the accidents were not reported to the Commissioner Workmen's

Compensation.

• While safety officers have been appointed by some of the large establishments,

safety training was not being imparted and safety supervision was even rarer.

• Medical examination of workers at regular and prescribed intervals was not usually

taking place.

• Health facilities such as first aid centres at the work sites were few and far

between; a first aid box was all that was available.

• Arrangements have been made by most establishments with a local clinic/nursing

home/hospital for major injuries.

• At some sites, full fledged clinics were observed though not at the workers camps.


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Living Conditions: • Except in the case of the site at the Airport under DIAL/Larsen and Toubro, the

living accommodation was basic, number of toilets too few considering ;the

number of workers, the use of GI sheets for the hutments making these barracks

insufferable in the extreme Delhi weather.

• Lack of overall hygiene, environmental sanitation and cleanliness was deplorable.

Other general observations: • In many cases, neither the principal employer nor the contractor/sub contractor

was aware of the provisions of the Building and Other Construction Worker's

(Regulation of Employment and Conditions of Service) Act, 1996.

• Very few workers at the sites visited had been registered under the Act.

• There is obvious ineffectiveness in action taken by the regulators in monitoring

compliance with the provisions of various laws/rules.

• There appears to be a distinct bias against the employment of women and

provision of suitable amenities for them while they are accompanying their

husbands. Only one creche was found operating at the Games Village.

• Much of the problems regarding accommodation arise from the non availability of

land to build proper camps; MCD and PWD projects frequently use the road sides

for worker's accommodation.

• The Committee was made aware of the numerous communications by the

petitioners and other NGOs working in the field addressed to Government (both;

Central and State) at various levels as also the labour law enforcement machinery

(both Central and State) which received either no response or incomplete

response.

15.49 HLC is of the view that GNCTD and other Government agencies could and should

have done a lot more to ‘safeguard’ the worker’s interests on construction projects that

were being executed in open view of the Government and its law enforcement machinery.


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Refund of money

15.50 Enquiry by HLC Team into construction of International Broadcast Centre and Media

Press Centre at Pragati Maidan has revealed that ITPO needs to refund 28.66 crore to the

Ministry of Information & Broadcasting.

Commitment by LG 15.51 HLC is also surprised to note that the Lieutenant Governor of Delhi gave a

commitment in a meeting held on 18th December, 2009 that “in the event of DTC not being

allowed to use the parking facilities at the site (Millennium Park) after CWG 2010, the entire

amount spent on developing the site will be reimbursed by DDA.”

Box 5: Report of the Monitoring Committee set up by the Hon'ble High Court of Delhi Recommendations • Direct all principal employers/main contractors, whether of projects for the Commonwealth Games or

the other, to immediately take steps to ensure that minimum wages are actually paid to the workers, to be confirmed and reported on action taken by the regulatory authority concerned i.e, the Chief Labour Commissioner (Central)/Labour Commissioner, Delhi.

• Unpaid wages should be immediately disbursed directly to the workers. • Payment of wages through zero balance bank account should be tried urgently wherever possible. • Claims u/s 20 of the Minimum Wages Act in the event of non payment of wages or short payment should

be filed by the officers of the labour law enforcement machinery (both Central and State) before the competent authority and a direction should be issued by the Hon'ble High Court to such authority to adjudicate and settle the claims in a time bound manner.

• Direct the regulators i.e. the DG (Inspection) both at the Central and State level to monitor steps taken to ensure that all the safety measures stipulated by law are implemented and the action taken reported to the Hon'ble Court on a regular basis.

• Direct all principal employers/main contractors to ensure basic clean and hygienic working and living conditions for all workers on an urgent basis in accordance with the provisions of the relevant laws.

• Direct the Welfare Board to start a time bound programme for registration of all construction workers, preceded, if necessary, by a wide ranging and easily understandable campaign among the workers and process the request for assistance on an urgent basis.

• Longer term issues, as brought out in the report need to be studied and addressed urgently, such as re-examination of recruitment procedures by changing the Thekedar system, allotment of land for accommodation of workers at the same time as land is allotted for a project, recruitment of and provision of amenities for women including creches for infants and above all, responsiveness to and collaboration with concerned civil society organizations on all these issues by the authorities both at the Central and State Government levels. • Consider the imposition of exemplary and deterrent punishment for ail violations of the provisions of

relevant laws. • Consider continuous and empowered monitoring of the directions of the Hon'ble Court.

Source: Report of the Monitoring Committee


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Undue Gain to Contractors A. Lack of competition and higher tender rates

15.52 It is observed by the Committee that on account of bidding being confined to a set of

prequalified contractors and acceptance of ‘higher’ tenders have resulted in windfall

financial gains to some of the contractors as their quoted price were considered justified

and accepted. In Barapullah and Ring Road Projects, the price quoted are 23-24% higher

than the estimated cost. Since the rates for most of the items in these projects were

analysed on the basis of MORTH Data Book, which provides for the coefficients for labour,

material and machinery, and the Department had input the prevailing market rates for

arriving at the cost estimate, there is no justification for such high rates, especially because

the time gap between estimates and the tenders was only 2-3 months. Assuming that the

contractors might factor in the risks involved in executing these high profile time bound

projects to the extent of 5% (say for example liquidated damages for delay) and costs

involved in accelerating the projects by another 6 or 7%, (actual cost considered in Ring

Road project is about 3% and Barapullah as 7.5%), the maximum justification for the rates,

prima facie, appears to be of the order of about 12%. Thus, the contractors of these projects

have got undue gains to the extent of at least 12%, if not more. The other two major

projects, viz, Raja Ram Kohli and Ghazipur, were constructed by the same contractor,

AFCONS. In case of Raja Ram Kohli, the tender premium is 46.78% over the estimated cost,

which was based on DSR 2002. After factoring 30% increase in cost as per construction cost

indices between 2002 and 2007, the tender premium works out to about 13 %. Since unlike,

the above two projects, this project was not on a fast track, this premium appears high, by

about 10%. The tender for Gazipur project is higher by about 16%. Since the estimated cost

was based on the same contractor’s quoted rates in another project (Mukarba Chowk),

awarded about a year ago, the tender premium is very close to the increase in construction

cost index (14%) during the intervening period. The premium could, therefore, be

considered justified.

B. Overprovision in various contracts

15.53 The contracts for streetscaping, street lighting, and signages were overprovided,

which had serious cost implications and resulted in undue gains to the contractors as

discussed below:


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(i) In street lighting contracts, the contractors have received undue gains to the

tune of 63.20 crore. This is estimated on the basis of the following:

• Imported Luminaries – 17.5 crore • Indigenous Luminaries – 7.7 crore • Poles - 21.0 crore • NIT Conditions – 17.0 crore

(ii) In streetscaping contracts, the contractors are estimated to have been unduly

benefited to the extent of at least 16 crore (reviewed two contracts per

agency). This is on account of the following:

• Consultancy – 5 crore • Over measurements – 11 crore (MCD Only)

(iii) In signage contracts, the contractors have received ‘undue benefits’ of almost

50% of the contracted price - 36 crore. It has also been observed that due to

inappropriate NIT conditions, contractors have been unduly benefited to the

tune of 10.90 crore.

Thus, following are the estimated undue gains to the contractors.

# Name of Project Name of Contractor Likely cost of completion

Undue gain (%)

Undue Gain (in crore)

1 Barapullah Nullah Elevated Corridor

M/s DSC Limited 440.00 12 52.80

2 Ring Road Bypass M/s Simplex Ltd. 380.00 12 47.00

3 Streetscaping Multiple contractors - - 16.00

4 Streetlighting Multiple contractors - - 63.20

5 Signages Multiple contractors - - 46.90

6 Rajaram Kohli M/s Afcons 282.00 10 28.20

Total 254.10


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Savings 15.54 It has also been observed that in almost all projects there could be significant

savings. In the following projects that were examined, savings to the tune of about 160

crore is expected. Details are as under:

# Name of Project Project Owner

Contracted Cost ( in crore)

Projected completion cost

Likely Savings ( in crore)

1 Elevated corridor over Barapullah Nullah

PWD 433.71 +50 = 483.71

440.0 43.71

2 Ring Road Bypass PWD 408 380 28.00

3 Covering of Sunehri & Kushak Nullah

MCD 303.95 297 6.95

4 Upgradation of Streetlighting

PWD, NDMC, MCD

285.88 28.00

5 Streetscaping PWD, NDMC, MCD

324.22 22.34

6 Signage PWD, NDMC 77.52 5.70

7 Media Press Centre at Pragati Maidan

ITPO 75 49.95 25.05

Total 159.75

15.55 HLC is of the view that concerned Agencies must exercise due caution and carefully

scrutinize all bills that are now produced by the contractors before making payments as the

projects have been largely completed.


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Centralization of Power 15.56 It has been noticed that while the Expenditure Finance Committee has traditionally

been headed by the State Finance Minister, GNCTD. All projects of and above 5 crore and

upto 100 crore were considered and sanctioned by the EFC headed by the Finance Minister

vide orders of LG issued in October, 200746. Projects of 100 crore or more were to be

approved by the Cabinet.

15.57 Vide orders dated 14.01.200947 the powers of EFC were bifurcated into two with EFC

I chaired by the Chief Minister empowered to approve projects between 50 to 100 crore

and Finance Minister as head of EFC II authorised to approve projects ranging between 5 to 46 See Annexure 14 A 47 See Annexure 14 B

Saturday, 19 December 2009 Sports minister M S Gill optimistic despite delay concerns Sports Minister MS Gill today claimed that the organisers for Commonwealth Games were trying to make up for the time that was lost due to the late start of the project work but assured that all the venues will be ready well in time. Only yesterday, Commonwealth Games Federation (CGF) chief Mike Fennell claimed that he was disappointed that some of the venues, including the Jawaharlal Nehru stadium which is to host the opening ceremony for the October 3-14 Games, will not be ready until June next year. 'Whatever time has been lost since 2003, we are trying to make up for that,' Gill told mediapersons here. 'Fennell has said it again and again that a lot of progress has been made of late and we are doing the catching up job,' he added. Gill further lavished praise on the engineers for their dedicated support round the clock. 'The engineers are working hard, give them some credit. The workers from Bihar, Orissa, Bengal are also working hard and it's these people who are putting up the game and not me.'God willing, I am sure we will get there in good time,' Gill said after his meeting with the Group of Ministers today. Delhi Chief Minister Sheila Dikshit too admitted that she was a little 'nervous' but said she was confident as well that the national capital will deliver successful Games. 'I am not feeling comfortable. I'm rather nervous, but I think we can do it,' Dixit said.


http://commonwealthdelhi2010.blogspot.com/2009/12/sports-minister-m-s-gill-optimistic.html�


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50 crore. However, vide orders dated 15.7.200948

15.58 HLC has come across six cases where proposals for less than

it was ordered that all CWG projects

would be put up for approval before EFC I headed by the Chief Minister. This order was not

issued with the approval of the LG unlike all other orders relating to constitution of EFC and

its powers issued earlier.

50 crore were

accorded approval by EFC I chaired by the Chief Minister. Details of these projects are as

under:

Ref. to EFC Meeting

Date of Meeting

Name of Project Project Cost ( in crore)

3rd meeting of 2009-10

24.08.09 Development of parking lot for Transport Deptt (DTC) for CWG near IP Power Stataion at Ring Road

10.49

4th meeting of 2009-10

12.10.09 Providing Park & Ride & Holding Facility at Safdarjang Airport

31.25


12.10.09 Development of DTC site for Baggage Scanning Machine

7.78


12.10.09 Development of Park & Ride facilities for Buses near Rajghat Power Plant & other miscellaneous works

19.82


09.12.09 Development of facility and creation of infrastructure by Transport Department / DTC

30.96

1st meeting of 2010-11

22.04.10 Semi-permanent structure type building at Parking lot for DTC near IP Power Station at Ring Road

12.67

15.59 HLC is unable to fathom the reasons behind the centralization of powers by the Chief

Minister of Delhi. The Chief Executive should, as a rule, delegate as much power as possible

to subordinates and focus on policy issues and monitoring and supervision of works. Here,

unfortunately, the reverse happened and with not too great results.

No dearth of money syndrome 15.60 The manner in which estimates were prepared, specifications arbitrarily changed,

and project cost hiked up shows that almost everyone, from ‘top to bottom’ believed that

48 See Annexure 14 C


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once a project had been categorized as a CWG project, then funds were not a constraint at

all! Funds were to be provided by Government of India – first, from the Ministry of Youth

Affairs & Sports; second, from Ministry of Urban Development under JNNURM; third, from

the Planning Commission as higher Plan allocation. In case, funds were not forthcoming

from GoI, GNCTD was always there to fund the project. In such a scenario, where everyone

seems to be afflicted with the ‘no dearth of money syndrome’ it is hardly surprising that

even ITPO inflated its demand by just 35% and in case of most other projects, costs appear

to have been inflated by at least 25 to 30%.

Major Flaws in Tendering process

15.61 Major flaws in tendering process have been observed in works relating to

upgradation of Streetlights; Streetscaping; Signage and Bus Queue Shelters. These flaws

restricted competition and in certain cases went against the conditions laid down in the

Tender Documents, thereby, vitiating the entire tendering process. Instances have come to

light where none of the bidders protested because it appears they knew that each one of

them would get a ‘share of the spoils’!

Cost of Delay

15.62 Keeping in view the facts that have emerged in the course of this probe, HLC finds it

difficult to straightaway discount the strong public perception that there was a ‘method in

the madness’ i.e. such unduly long dilly dallying in deciding on projects was, perhaps, a

deliberate attempt at higher levels to create a sense of panic with a view to giving ‘undue

advantage’ to all concerned. HLC has tried to estimate the ‘cost of delay’ in case of a

number of projects.

15.63 If work on the ‘city infrastructure’ projects had commenced even by the year 2007

and the contractor had got a period of 36 months to complete the projects, Government

would have made a cumulative savings of 130.60 crore on just the Barapullah Nullah and

Ring Road Bypass project alone, approximately 13% of estimated cost of these projects.

Applying this factor to the remaining city infrastructure projects results in a figure of about

900 crore as the ‘cost of delay’.


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Complicity 15.64 It has also been observed that ‘Undue Gains’ of about 254.10 crore to contractors

in projects scrutinised by HLC are attributable to various acts of omission and commission of

persons and officers involved in the process.

Responsibility 15.65 Detailed examination of the projects undertaken by the GNCTD, NDMC, MCD show

that for certain ‘city image’ improvement projects (streetlighting, streetscaping, signage),

NDMC and MCD acted as adjuncts of the GNCTD rather than as independent entities. The

Chief Minister took personal interest in the planning and execution of these projects. While

full credit must be given to the CM for the leadership provided, she also carries the

responsibility for the decisions taken including those relating to ‘city image’ improvement

projects which cost the city dear.

15.66 The responsibility for the shortcomings that have been highlighted in this report will

have to borne by the top brass of PWD, GNCTD, NDMC, MCD and DDA. These include Shri

K.K.Sharma, Principal Secretary, PWD, GNCTD; Shri R.Subramanian, then Engineer-in-Chief,

PWD; Shri Parimal Rai, Chairman, NDMC; Chief Engineer, NDMC and concerned officers of

MCD and DDA. There may be other officers whose acts of omission and commission have

caused loss to Government and undue gain to contractors whose responsibility can be fixed.


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Chapter 16: Recommendations

Justification of Tenders 16.1 HLC is of the view that the present system of working out a ‘justified cost’ based on

market rates and comparing the tenders with the so-called justified cost is totally flawed

and needs to be immediately dispensed with.

16.2 As per CPWD Works Manual, the need for preparing the justified cost arises only

when the tenders are in excess of 10% of the “estimated cost”. In such situations, the

tenders are compared with the “justified cost based on market rates” and if (a) the tenders

are found to be within 5% of the justified cost, such excess has to be ‘ignored’ (a

euphemism for accepting them without reference to higher authorities), (b) the tenders up

to 10% in excess of the justified cost, can be accepted, and (c) if the tenders are more than

10% of the justified cost, these have to be rejected.

16.3 The manner in which justified costs have been worked out in the projects examined

by HLC vary widely from project to project. Generally, quotations are invited from market to

determine the market rates. The rates arrived at in this manner neither reflect the

competitive price, nor factor the economies of scale in bulk supplies nor systematically

collected and held in a database. Such rates are, therefore, non-transparent. Therefore, the

band of 10% of a non-transparent “justified cost” has great potential of being misused to

justify a ‘high’ tender by artificially jacking up the justified cost to bring a tender within the

Manual specified limits, and abused to eliminate a bid by suitably depressing the justified

cost and bring a tender outside the limits.

16.4 The “estimated cost” is in fact the cost put to tender. This cost is generally based on

DSR and not indexed to construction cost indices, thereby, artificially depressing the cost

with respect to current rates. The problem is accentuated further as DSRs are not revised

frequently (the latest revision was done in 2007 after 2002) and there are many non-

scheduled items (such as machinery, equipment, and other supply items), the rates of which

are taken from market quotations. The “estimated cost” thus is not very authentic and, in

majority of cases, is less than the current costs, which brings in more and more works within

the “justified cost” procedures.


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16.5 HLC, therefore, recommends that more and more transparency should be brought in

estimation of “estimated cost” and “justified cost”, by adopting the following measures:

(1) Preparation of cost estimates should be on firm cost basis, and the cost put to

tender, should be updated for current cost by indexing the costs (if the DSR is

old) or doing due diligence on the rates of non-schedule items before receipt of

the bids. Once the cost is firmed up, all comparisons of the tenders should be

made with this cost rather than arriving at a justified cost post receipt of bids.

(2) GNCTD and CPWD should have a system of market research on a continuous

basis to collect data on the costs of non-scheduled items, which can be used

across all projects by all Divisions

(3) Where special items are to be procured (such as lifts, generators, bridge

bearings, etc) for which suppliers are limited, the due diligence on the cost

should be completed before the bids are opened. In no case the rate should be

justified after receipt of the bids.

(4) The Manual should provide flexibility of operation and define the situations

where the cap of 10% for accepting a tender can be relaxed and provide for

raising of the decision making level. This will bring in more transparency and

accountability in the system of tender acceptance.

Procurement Process 16.6 HLC observed that there was no uniformity in procurement process across all

projects. While the predominant mode of procurement was through item- rate contracts,

many compromises were made in terms of adequate time for preparation and procurement.

HLC does not consider it appropriate to recommend a particular system of contracting.

Nevertheless, it strongly feels that a well laid out procurement policy is necessary, which

should be followed in letter and spirit, urgency or no urgency. In emergency situations

appropriate level in the Government should decide the relaxations in the provisions of the

policy, which should be internalized in the policy itself.


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16.7 Some of the recommendations in this regard are as follows:

(1) Where time available is short enough for preparation of proper design and

preparation of bid documents (say less than 6 months) preparation time

should not be hurried. Alternatives like Design Build, Fixed Cost contracts

should be adopted with proper safeguards to ensure integrity of design and

suitable warranty for works.

(2) All procedures for prequalification, bid invitation and evaluation should be

standardized and deviation from standards prohibited or decided at a higher

level.

(3) No changes should be made in qualification conditions after receipt of PQ

application or technical bid. If changes are required for any reason, the PQ or

bid should be re-invited

(4) Splitting of projects should be done only after recording reasons for doing so.

(5) A proper time should be given for submission of bids. For works costing more

than Rs 100 crore, no less than 4 weeks time should be given.

(6) Independent design check should be done by Proof Checking Consultants

(7) No single bid should be accepted as a rule in the first call of tenders

(8) Where multiple packages are invited, all the packages should be invited at

the same time instead of staggering them, and the bid conditions should

provide for award of contracts on ‘least cost to Government’ basis.

Other Recommendations 16.8 In order to make optimum use of the elevated road over Barapulla Nala, immediate

action should be taken to commence construction of the two links viz. from JLN Stadium to

Aurobindo Marg and from Star City Mall on the eastern side of the Yamuna river to Sarai

Kale Khan.

16.9 Complete information about street lighting and street scaping projects, including

works undertaken and the amount spent, should be disseminated at the ward level. RWAs

should be involved in the task of social audit and the citizens should be encouraged to give

feed back on the quantum and quality of work carried out. This exercise may be carried out

in the next two months.


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16.10 It has been observed that administrative approvals and sanctions for expenditure

have been given rather liberally. Several projects are likely to show “savings”. It must be

ensured that the project accounts are closed immediately (as the projects have already

been completed) and any attempt to present bills showing “utilization” of unspent amounts

should be discouraged and penalized.

16.11 Undue gains given to contractors should be identified, utilizing the leads and

information given in the report and steps may be taken to recover the amount from pending

bills of these contractors. Suitable action should also be initiated against those contractors

who have received undue benefits.

16.12 Disciplinary and other action should be initiated against persons and officers for their

acts of “omissions” and “commissions” identified in the report.