Sunday, December 23, 2012

CAG Audit Report Exposes OF & Land allotments







CAG nails Army: Audit report exposes ordnance factory and land allotment scams causing Rs.1277 crore los .
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The Comptroller and Auditor General (CAG) has unearthed irregularities and inefficiencies mainly in the Army's ordnance factories that have cost the national exchequer an estimated Rs.1,277 crore and led to huge gaps in the country's war preparedness.
Apart from this there was a huge loss due to diversion and misuse of prime cantonment land to private builders in cities such as Pune, Kandivili, Panchmarhi and Barrackpore. The CAG has also chastised the Indian Navy and the Air Force for inefficiencies and wastage in several of their projects.
While the armed forces have been pulled up for decision deficiencies resulting in losses, the defence ministry has not been spared either by the CAG "for gross mismanagement of land under its possession."

There is striking similarity with the Adarsh housing society scam in Kandivili where 5,166 sq metres belonging to the Central Ordnance Depot ,which was in possession of the army since 1942, was given to a private company for residential purposes on the basis of an irregular no-objection certificate issued by the Defence Estates Officer, Mumbai.

The CAG has pointed out that unauthorised construction and running of 36 hotels on old grant sites at Panchmarhi was not prevented by the Defence Estates Service.

Similar cases were reported from Barrackpore cantonment where two old grant sites were misused as restaurants and shops despite a shortage of land for military use.

Perhaps a more damaging revelation relates to tank ammunition. Even as the army has been complaining about the shortage of ammunition, the CAG has pointed out that more than 1,00,000 rounds of tank ammunition designed indigenously were declared unserviceable without proper verification.
The value of this wasted ammunition was pegged at Rs.408.06 crore. The wastage was detected by auditors in 2010 in the Southern Command which is headquartered in Pune.
The report noted that out of 3,50,000 rounds of ammunition worth
Rs.1,400 crore produced by the Ordnance Factory Board, 1,34,608 rounds were unserviceable.

A major chunk of these - 1,02,014 rounds had not even completed a shelf life of 10 years.

This compelled the defence ministry to import 16,000 rounds of ammunition worth
Rs.278.88 crore from Russia earlier this year.

In another instance pointed out by the CAG, the Defence Research and Development Organisation had developed a modular charge system for 105 mm and 130 mm artillery guns.

But by the time the project was completed, the army was not interested in the technology which led to wastage of `13.48 crore that had been spent in developing a modular charge system for field guns.

Poor soil investigationand bad engineering by the Military Engineering Service Engineers led to the construction of sub-standard bunkers meant for the storage of ammunition.
The bunkers were constructed for Rs.7.61 crore and have remained defective even after three years.

The ministry has admitted that some of the structures actually collapsed.

Radar Warning Receivers are used by combat aircraft to warn them that enemy radar has "illuminated" them. The CAG has pointed out a serious deficiency in an Air Force project where it failed to install radar warning receiver systems in most of its fighter aircraft fleet.

The IAF had sought to equip its entire fleet of combat jets with RWRs but the CAG has revealed that the project has come a cropper even after a spending
Rs.521 crore.

The IAF ordered 336 RWR systems from Bharat Electronics Limited in 2005. A major chunk of these- 94 per cent- were supplied in 2007, well before the delivery deadline of 2010.

But the CAG noted that till April this year, only 73 out of these 336 systems had been installed. There is also a dispute between the defence ministry and the CAG over performance of these radars.


The IAF had claimed that these RWRs had not performed satisfactorily, but the defence ministry, in its reply, claimed it was a proven and totally reliable system with an exceeding 80 per cent.

The CAG report said it does not agree with the defence ministry's observation as the performance of 69 out of 73 RWRs integrated to date with IAF aircraft were not up to the mark.

The Navy and the Coast Guard have not been spared by the CAG either.

In one instance it has said that operations of Navy submarines were affected because of delays in commissioning of "a crucial system onboard." This led to a loss of
Rs.167.64 crore

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