CAG flags Indian HC in London undertaking renovation work without MEA approval

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New Delhi, Mar 24 (PTI) The Comptroller and Auditor General of India has flagged the Indian High Commission in London undertaking work relating to renovation of basement at its India House premises without prior approval from the Ministry of External Affairs, and said initially the work was awarded to an 'ineligible' company through an 'irregular' tendering process.

The country's top audit body, in its report for 2018-19 tabled in Parliament on Wednesday, said the High Commission of India, London undertook work relating to renovation of the basement at the India House, at a cost of 744,971 pounds (approx. Rs 6.63 crore), without prior approval from the Ministry of External Affairs.

The initial award of the work was to an 'ineligible company through an irregular and manipulated tendering process' which was followed by award of extra work without tendering to the same company, thereby extending undue benefit to it, the report said.

'Further, additional work was awarded based on fraudulent quotations, to an associated ineligible company, incorporated immediately prior to the award of work and dissolved after receipt of payments,' it said.

The CAG recommended that the inquiry by the mission be followed up by the ministry with a comprehensive vigilance enquiry so that responsibility is fixed on officials responsible both for the commission of the grossly irregular acts and for supervisory lapses, and suitable deterrent action is taken.

'In addition, controls on execution of works including documentation at each stage, may be strengthened, and allocation and utilisation of funds for works, including minor works, may be closely monitored so that diversion of the same for unapproved purposes is curbed,' the report said.

Separately, the CAG also said the High Commission of India in London irregularly engaged a private party, authorising it to -- receive and retain government receipts of Rs 78.41 lakh in its private bank account and disburse a substantial part of the receipts towards the mission's own expenditure.

In its report, the CAG also said the Ministry of External Affairs made excess payment of Rs 2.89 crore to the service provider for passport services due to incorrect application of rate of service charges for processing passport applications during June 2015 to February 2020.

The auditor also flagged the issue of loss of revenue due to irregular tax exemption to South Asian University (SAU) registrar.

The South Asian University (SAU) was established by the eight member nations of the South Asian Association for Regional Cooperation (SAARC).

Under the SAU Act, the President and other faculty members were exempted from payment of taxes in respect of their salaries.

'On January 15, 2009 the Ministry of External Affairs issued a notification to make the Registrar of the University eligible for grant of tax exemption, which was contrary to the provisions of SAU Act. Irregular exemption of income tax granted to the Registrar resulted in loss of Rs 90.06 lakh to the government exchequer,' the report said. PTI ASK AAR AAR