NEW DELHI: A Cost hike of Rs. 3, 385.21 cr in 21 medical education projects, has led the Public Accounts Committee (PAC), to reprimand the Employees State Insurance Corporation (ESIC), which comes under the Ministry of Labour.
“All the medical education projects taken up were behind schedule, except for two projects at Rohini (Delhi) and Ayanavaram (Chennai). Extensions ranging from one year and two months to four years and nine months were granted to these projects,” states the 67th report of the Public Accounts Committee on the performance audit of ESIC, submitted to the Parliament recently.
The ESIC in its reply giving reasons for the setback in project completion and cost overruns, stated delays in obtaining permission from authorities, handing over parts of building under occupation, shifting of sites, as some of the factors. The Public Accounts Committee cited the reason for the same to be – the lack of adequate planning and due diligence on the part of ESIC .
The PAC observed, that the frequent hike in costs of these projects from 2 to 12 times, had resulted in the income of ESIC, to be used in providing medical and cash benefits to insured beneficiaries had been consumed in completing the incomplete projects.
The PAC in its conclusive comment in the report recommended that “liquidated damages may be imposed on the contractors who caused delays in completion of works and responsibility be fixed on concerned officials.”
The Committee report submitted also reveals that the KV Thomas, headed cost hikead also observed that ESIC’s capital commitment on 21 medical education projects had increased from Rs. 8,611.49 crore to Rs. 11,997. 15 crore (March 31, 2015).; resulting in cost hike of Rs. 3,385.21 crore.
“Against the revised cost of Rs. 11,997.15 crore, the ESIC has incurred expenditure of ₹5,955.03 crore on 21 medical education projects,” the report stated.
A cost overrun of Rs. 200 crore has been incurred on six of the 21 projects. The more prominent ones being Medical College at Basaidarapur, Delhi and PGIMSR. Their original estimate being Rs. 730.82 crore and revised cost Rs.1,470 crore (March 31, 2015). The cost overruns of the two cited at Rs. 739.18 cr by the report. With work at Bhubanehwar postponed reports the Hindu Businessline.