CAG flags MoEFCC projects costing Rs 4.47 crore for procedural lapses

A Comptroller Auditor General (CAG) of India report has highlighted two projects that failed to materialise due to lapses in following procedures by the Union Ministry of Environment, Forest and Climate Change (MoEFCC). The projects cost Rs 4.47 crore to the public exchequer. 

The ministry spent Rs 1.04 crore on technical research for the development of polyols from plant-based non-edible oils in collaboration with Indian Institute of Chemical Technology (IICT), Hyderabad and an industrial partner, the report found.

MoEFCC approved the two-year project in 2013 under the “Development and promotion of clean technology and waste minimisation strategies” scheme. At a total cost of Rs 2.58 crore, IICT was designated to develop the technology. 

The industrial partners were expected to design and install the pilot plant on its premises and upgrade the technology. 

In February 2014, the MoEFCC released Rs 31 lakh to IICT and another Rs 64 lakh to the industrial partner to begin the work. 

However, the audit found that no memorandum of understanding was signed defining the responsibilities as agreed mutually between the industrial partner, the ministry and the institute. Furthermore, the bipartite agreement between the IICT and the firm was delayed and signed in November 2017. 

The CAG also found that no intermediate milestones and deliverables were laid, which was an issue raised in the first meeting in 2014 and on later occasions as well. The project monitoring committee (PMC) had also highlighted the need for financial safeguards.

The audit noted that the IICT developed the technology to display know-how for two polyols, but could not demonstrate the technology in the absence of the pilot plant by the industrial partner. 

As the plant was not established, the PMC then deferred the release of further payments to the industrial partner. MoEFCC, however, released the second installment amounting to Rs 20.5 lakh and Rs 40 lakh to IICT and the industrial partner in October and December 2016, respectively.

After an assessment of the pending tasks, the duration of the project was extended until October 2017. But as the industrial partners failed to install the plant, the IICT expenditure of Rs 50.94 lakh to develop the technology did not materialise for commercialisation, bringing the total expenditure to Rs 1.04 crore.

The MoEFCC said the firm was repeatedly asked between June and October 2022 to establish the plant and demonstrate the production developed by IICT, but in vain. 

In January 2023, the ministry also issued an ultimatum to complete the project in 90 days, following which the industrial partner failed to do so, resulting in failing to achieve the objectives of the project. 

In another such case, the MoEFCC in September 2010 approved the “Demonstration project of plasma technology for waste destruction” in Gujarat in a tie-up with a foreign partner.

The project, costing Rs 6.26 crore, was to be set up at the Gujarat Industrial Development Corporation (GIDC) in Ankleshwar, Gujarat. It aimed to convert hazardous waste into electricity using plasma technology.

As per the agreement, MoEFCC was to support the project with Rs 3.71 crore as grants-in-aid while the remaining amount of Rs 2.55 crore was to be spent by the industrial partner. 

The Gujarat Pollution Control Board (GPCB) was appointed as the implementing and monitoring agency, which also constituted PMC in October 2012. 

The estimated timeline for the completion of the project was September 2014, but it kept on extending until June 2018. 

In April 2013, the foreign partner bailed out, after which the PMC decided to rope in another foreign agency for the project. Between March 2012 and November 2016, the ministry disbursed Rs 3.34 crore against the expenditure tables for Rs 3.49 crore until August 2019. 

During the audit, the CAG observed the cost of the RF torch and power supply system, crucial components of the plasma technology, were to be borne by the industry. However, after the change of foreign partner, the ministry funds of Rs 1.6 crore were used by the project proponent to pay the foreign partner, the audit revealed.

“The RF torch, delivered in March 2019, was bought at the expense of the ministry, which is evident from the show-cause notice served by MoEFCC in January 2019. Further, the torch is lying uninstalled as the foreign partner closed down their Indian office. lt is also observed that the tip of the RF torch has corroded due to lack of maintenance and needs repair,” the audit observed. 

It also discovered that, of the total Rs 2.55 crore spent by the project proponent until August 2019, approximately Rs 2.42 crore was allocated to building, land development, salary, transportation, electricity connections, and so on.

As per the guidelines underlined in the scheme, the expenditure on the cost of land and buildings was not approved. PMC meetings were also not conducted for five years, between April 2015 and January 2020.

A meeting held in January 2020 revealed that the plasma plant was not functioning and in September 2021, a vigilance team from GPCB found the plant was non-functional with machinery in idle condition.

During a trial run conducted in September 2022, Central Pollution Control Board and PMC members declared that the project was in poor state and failed to achieve its goals.

Further, the MoEFCC issued an ultimatum to the project proponent in January 2023 to complete the project in 90 days, but never materialised until the preparation of the report. 

“Hence, due to lack of monitoring by PMC and absence of any legal agreement defining clear responsibilities with penalty provisions, the project to demonstrate the treatment of hazardous waste to produce electricity by using plasma technology could not be established,” the audit noted.

The overall failure caused unnecessary expenses of Rs 3.43 crore, including the sum of Rs 1.6 crore spent on purchase of RF torch, the CAG said.

Subscribe to Daily Newsletter :

SUPPORT US

We are a voice to you; you have been a support to us. Together we build journalism that is independent, credible and fearless. You can further help us by making a donation. This will mean a lot for our ability to bring you news, perspectives and analysis from the ground so that we can make change together.