AG seeks clarification on MoUs without competitive biddings

Bhubaneswar: Raising question over non- existence of a proper policy for signing MoUs, the Accountant General, Odisha, has sought a clarification from the state steel and mines department on selecting promoters to set up industries, official sources said.

The AG during audit found that the state government signed MoUs with promoters without open tenders or competitive bidding while companies were allocated land, water and mineral linkages.

"…We also found that neither any competitive bidding was made for selection of parties for setting up particular type of industries/infrastructure projects nor given any Request for Proposal (RFP) was issued," G Chandraprakash, deputy AG said in a letter to the steel and mines secretary Rajesh Verma.

The AG said that states like West Bengal, Gujarat and Karnataka were inviting RFP for setting up industries.

"No such practice had been maintained in Odisha," the letter said.

The AG said that the state had framed a policy in 1998 and revised it in 2003 for mini, micro/small hydro-electric projects.

"But similar policy was not framed by the department (steel and mines) for other industries in heavy and mega industry category like integrated steel plants and steel plants," the AG said.

Stating that land, water and mineral being finite and scare resources which required need based allotment to promoters of industries, the AG said the government in MoUs had committed supply of 74.61 MT of bauxite per annum to industries against the state's estimated total reserve of 1805.81 MT.

"..the entire bauxite reserve of the state would be exhausted in next 24 years," the AG pointed out.

The AG has also sought clarification on non-adherence to timely financial closure, non-furnishing of detailed milestones to government for monitoring, unauthorised accordance of mortgage right, extension of validation of MoUs after lapse of validity period, according administrative approval prior to signing of MoUs, irregular continuance of land acquisition and handing over of land to promoters after lapse of validity of MoUs.