CAG's CWG Audit Report - Chapter - 21 (2011)

8/6/2019 CAG's CWG Audit Report - Chapter - 21 (2011)

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c : : :wl-e ..::I:uStreetscaping and Beautificationof Roads around CWG Venues

Streetscape generally refers to urban roadway design and conditions as they impactstreet users and nearby residents. Streetscaping programmes are an importantcomponent of efforts to redevelop urban areas and can include changes to the road crosssection, traffic manaqement, sidewalk conditions, Iandscapin gl street furniture,buildinqfronts, improving sign ages etc.In 20041 GNCTD decided to implement streetscaping and beautification of roads for"aesthetics" before CWG-2010. However, in our view, the street-scaping andbeautification project was ill-conceived and ill-pkmned, without a broad overarchingvision and perspective of how this would impact urban design and development. Theproject was not part of Delhi's City Development Plan under the Gol's flagship JNNURMprogramme for urban development and renewal. Although preservinq, developing andmaintaining the aesthetic quality of urban and environmental design within Delhi isclearly within the remit of the Delhi Urban Art Commission, GNCTD did not deem itnecessary to obtain clearance from DUAC for implementation of the streetscaping/beautification project. Also, considering that traffic management is a key component ofstreetscaping projects, we also did not find evidence of consultation with the TrafficPolice at an appropriately early stage to assess and co-ordinate the impact of this projecton the management of the huge volumes of Delhi traffic. Streetscaping andbeautification at exorbitant average awarded costs of Rs. 4.8 crore/ km (compared toNHAl's estimated cost of Rs.9.5crore / km for constructing afour-lane national highwayor Indian Railways' estimated cost of about Rs. 4.1 crore/km for constructing railwaytrack) awarded and executed in an ad hoc and arbitrary manner confirm waste of publicfunds totalling Rs.101.02 crore.The project was largely a consultant-driven project, with the selection of consultantsbeing arbitrary and non-transparent and at an exorbitant average cost of Rs. 12.5lakh/km. Further, GNCTD did not provide any common design quidellnes, withcorresponding target budgetary estimates per km of work. The consultants were givenfree hand to draw up designs and estimates for the packages allotted to them. Thisresulted in adoption of richer specifications in an arbitrary and inconsistent manner indifferent packages (with an avoidable cost of Rs. 51.33 crore], with the cost of sUrfacingthe pavement for pedestrian walking ranging from Rs. 717 to Rs.2679 per sq. meter. Wealso found adoption of higher rates/ short recovery totalling Rs. 8.27 crore, and otherdeficiencies in contract management with an avoidable cost of Rs.8.14crore.Third Party Quality Control through the Heads of the Civil Engineering Departments of theDelhi College of Engineering and liT Roorkee failed to provide adequate assurance on thespecifications and materials used in the works, despite expenditure of Rs.1.47 crore.

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Chapter 21 -Streetscapingand Beautification of Roadsaround CWGVenues

21.1 What is Streetscaping?'Streetscape generally refers to urbanroadway design and conditions as theyimpact street users and nearby residents.Streetscapes are an important componentof the public realm (public spaces wherepeople interact), which help define acommunity's aesthetic quality, identity,economic activity, health, social cohesionand opportunity, not just its mobility.Streetscaping programmes are an importantcomponent of efforts to redevelop urbanareas and can include changes to the roadcross section, traffic management, sidewalkconditions, landscaping (particularly treecover), street furniture (utility poles,benches, garbage cans etc.), building fronts,improving signages, and materialsspecifications.Streetscaping can help create more diversetransportation systems and more accessiblecommunities by improving non-motorisedtravel conditions, creating more urbanenvironments and integrating special designfeatures such as pedestrian improvements,cycling improvements, traffic calming, HighOccupancy Vehicles (buses etc.) prioritystrategies and road space re-allocation.

21.2 Planning for streetscaping/beautification in Delhi

21.2.1 Lackof overarching visionOne of the objectives of CWG-2010 was thedevelopment of city infrastructure. GNCTDdecided in 2004 to implement streetscapingand beautification of Delhi roads before

Adopted from Victoria Transport Policy Institute's OnlineTOM Encyclopedia "Streetscape Improvements-Enhancing Urban Roadway Design" -18January 2011.

CWG-2010. The project remained more orless in a dormant stage till May 2008, whenGNCTD initiated the process of selection ofconsultants.Gol's flagship programme for upgradation ofcivic infrastructure - the Jawaharlal NehruNational Urban Renewal Mission (JNNURM)was launched in 2005, under which eachmission city was to submit a CityDevelopment Plan (CDP)with a long termhorizon of 20-25 years to facilitateidentification of projects. Delhi's CityDevelopment Plan for JNNURM, which wasapproved in October 2006, did not indicate"streetscaping and beautification" as anidentified project. Further, we did not findany projects for streetscaping/beautification approved under JNNURM inrespect of other cities. The only JNNURMprojects remotely linked to this aspect werefocused on restoration and redevelopmentof heritage areas.We did not find evidence of GNCTD havingconducted detailed studies of experiences/of streetscaping projects in Indian/ worldcities, and their impact on the localcommunity. Further, although preserving,developing and maintaining the aestheticquality of urban and environmental designwithin Delhi is clearly within the remit ofthe Delhi Urban Art Commission (DUAC),GNCTD did not deem it necessary to obtainclearance from DUAC for implementation ofthe streetscaping/ beautification project.Also, considering that traffic management isa key component of streetscaping projects,we also did not find evidence ofconsultation with the Traffic Police at anappropriately early stage to assess and co-ordinate the impact of this project on themanagement of the huge volumes of Delhitraffic.

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Chapter 21 - Streetscaping and Beautification of Roads around CWG Venues

Table21.1 - Chronology oj events leading to selectionoj streetscaping consultants

Date02 May2008

Events / ActivitiesEol for the consultancy works (split into three packages) called for from 19short listed consultants. Two bids received from Parekh Associates(Ahmedabad based firm not on the panel) and Oasis Designs.Bids cancelled since only Oasis Designs attended the meeting with EIC.

31May2008 Eol again floated, grouping the jobs in seven packages. Bids received fromthe same two consultants - Parekh Associates and Oasis Designs. The BoAconsidered the firms suitable for only one package each, leaving fivepackages.

07 October 2008 At the instance of the Chief Secretary, roads in the remaining five packageswere regrouped into eight packages (A to H) and third call delivered to 17 ofthe 20 short listed consultants', stipulating allotment of maximum twopackages to one consultant.Four consultants (Parekh Associates, Oasis Designs, Pradeep SachdevaDesign Associates and Sikka Associates) participated in the bid. No bid werereceived for three packages (A, B and G), and One to three bids werereceived for the remaining packages (C,D, Eand F) at values ranging betweenRs.8.26 lakh and Rs. 15.00 lakh per km.

12 November2008-11December 2008

BoA recommended no further allotment of work to Parekh Associates asthey were Ahmedabad based and had no office at Delhi, and for allotment of(at most) one more package to Oasis Designs.Before the BoA, Sikka Associates and Pradeep Associates expressed theirwil lingness for the packages. BoA considered them to be experiencedconsultants, and recommended for allotting two or more packages each tothese consultants.The Consultant Appointment Committee (CAe) accepted therecommendation of the BOA, with the modification that Oasis Design wasnot be given any further work (apart from the one package allotted on 31May 2008). Package-E was scrapped. This left only two consultants (SikkaAssociates and Pradeep Associates) for the seven packages. For these seven packages, quotations were available for only twopackages, with Sikka Associates quoting for package D and Pradeep

Sachdeva Design Associates for packages C and D. Although the NITprohibited allotment of more than two packages, the Chief Secretaryapproved allotment of more than two packages to a consultant.

It was decided to allot package Dto Sikka Associates (since there weremultiple bids for this package). For the remaning six packages, the twoconsultants submitted financial bids within one day.

Based on the financial bids, two more packages were allotted to SikkaAssociates (A and e) and four to Pradeep Sachdeva Design Associates (B,F,G and H) at negotiated rates, without specifying the technical works tobe done.

Now including Parekh Associates



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In all, Pradeep Associates and SikkaAssociates received four and three packagesrespectively, while Parekh Associates andOasis Designs received one package each'.We found that Sikka Associates andPradeep Associates submitted bids at thebehest (12 November 2008) of the BoA forthe additional packages (13 November2008) in one day's time. No technical bidswere submitted. The negotiated rates wereapproved by the CACwithout anypreliminary estimate/justification of ratesand conceptual plan; these negotiated ratesfor the six packages ranged between Rs.10.39 lakh and Rs.12.50 lakh per km. In all,the consultants were engaged for thestreetscaping works at a cost of Rs.9.20crore (averaging Rs. 12.5 lakh/ km). TheAdministrative Approval and ExpenditureSanctions were accorded by Government onpost contract stage (December 2008/April2009). Although the process of short listingof consultants was initiated in 2004, theprocess was inexplicably delayed up toDecember 2008, creating a situation ofurgency in execution of the works. On theground of urgency, consultants wereselected on direct negotiation. The extracost on engagement of consultants atvariable rates, excess payment on accountof less execution of work and non-levy of LDwas Rs.1.65 crore.In our view, the consultant selection wasarbitrary and non-transparent, since sixpackages were assigned simply on thebasis of financial quotations andnegotiation with two consultants, thattoo, without specifying the technicalworks to be done.

There were 9 packages for the consultants. However,these were re-grouped into 16packages for award ofwork.

21.4 Cost estimation for worksOut of the total estimated cost of Rs. 209.14crore for the eight packages (PWD portion),49 per cent (Rs. 101.71 crore) of the costwas on items with costs based on the DelhiSchedule of Rates (DSR)and remaining 51per cent (Rs. 107.43 crore) on items withcosts on Market Rates (MR)/Analysis ofRates. We found that the MR weregenerally not supported by any quotation,indicating that the estimates were not atrue reflection of the prevailing marketrates and thus, were not reliable.As pointed out earlier, the department didnot provide any common design guidelinewith corresponding target budgetaryestimate per km of streetscaping work. Theconsultants formulated plans /designs andspecifications for the works. The CEswhileaccording technical sanction, did notundertake a comparative examination ofthe plan/design and cost estimates(prepared by the consultants) across theeight packages with a view to bringing in abroad level of uniformity indesign/specification and cost of execution.This resulted in adoption of differentspecifications and rates for identical itemsof works.In our view, it was the prime responsibilityof the departmental engineers to assess theactual rates and specifications required forthe items so as to ensure economy,efficiency and effectiveness in execution.Further, since all the zones were under thetechnical control of EIC,comparison acrossthe zones should have beenadministratively ensured.The retired Directors of CPWD appointed asAdvisor to the PWD observed that the



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Chapter 21 - Streetscapingand Beautification of Roadsaround CWGVenues

consultants had not gone into theengineering details and suggested variousdesigns. They suggested dispensing withvarious unnecessary/unwarranted worksduring implementation of the Projects.These were not accepted, and the projectswere implemented as suggested by theConsultants.We noticed that due to lack of uniformity inspecifications, furnishings/components andrates between the estimates, the per kmcost of the works ranged between Rs. 3.14crore (Roads around various games venues)and Rs. 8.27 crore (Ring Road from Ashramto Bhairon Marg Crossing)

The streetscaping works were finallyawarded at per km costs ranging from Rs.3.63 crore to Rs. 9.75 crore with anaverage cost of Rs. 5.32 crore. Bycontrast, NHAI adopts an estimated costof Rs. 9.50 crore/ km for construction of afour-lane highway, and Indian Railways'estimated cost of construction of arailway track is around Rs. 4.1 crore/ km.Clearly, costs of this magnitude spent onstreetscaping and beautification wereprohibitive and represented a waste ofpublic money.

Incidentally, the per square metre cost ofsurfacing the footpath varied significantlybetween roads, averaging Rs. 717 for pavingwith normal paver blocks, Rs. 1450 withvitrified tiles and Rs. 2679 with polishedgranite.

21.4.1 Adoption of Richer Specifications/Higher Rates/ Short Recovery

We found that consultants increased thecost of the project at the estimation stageby providing richer specifications and higherrates for various items of work,overlooking/by-passing theprovisions/specifications of DSR,MoRTH,CPWD Manual and IScodes.The consultants' estimates were cleared bythe various levels upto the CEoHigh costbids were approved by the Works AdvisoryBoard (WAB) by way of irregularjustification of the quoted rates at thetender stage. The result of the abovemismanagement was loss of Rs. 59.60 croreto the Government as summarised below:

Table21.2 - Adoption oj Richer Specifications. Use of graniteand vitrifiedtiles forfootpath

Item of work Audit Finding Financial Impact(Rs.in Crore)

27.37

Granite Paving

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Item of work Financial Impact(Rs. in Crore)Audit Finding

GNCTD decided (July 2008) that the pavement forpedestrian walking should be constructed withcoloured cement concrete (CC) paver blocks. Theconsultants, however, proposed for use of gangsaw cut mirror polished machine cut graniteprescribed in the DSRfor kitchen platforms,vanity counters, window sills and similarlocations. We ascertained that the basic cost ofgranite in the market was around Rs. 1022/square metre, against which the estimatesadopted Rs. 1500/ Rs. 1765 per square metre. Wealso noticed that against 5 per cent wastageadmissible as per DSRfor all granite work, theconsultants considered the wastage at 15 percent.

Vitrified paving tiles

They also proposed vitrified tiles for paving, insome packages even specifying a particular brandi.e. "Pavit". The CEsdid not point out thediscrepancies for rectification before putting theworks to tender. This increased the cost of theitem of construction of the pavement. We alsonoticed that the finished rate of Pavit brand tile(16 mm) taking into account the market cost,wastage, overheads and other factors was Rs.965.24 per square metre, whereas he estimatesadopted Rs. 1854.16 per square metre.



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. Item of work Audit Finding Financial Impact(Rs.in Crore)CementConcretepaver block

12.34

Cement concrete paverAs per the specifications prescribed for such workunder CPWD and IScode, factory made 50 mmthick paver blocks of RMC M-30 were to be fixedon 50 mm thick coarse sand spread over a hardbase. We noticed that the consultants proposedfor fixing factory made CCpaver blocks of richerspecifications and excess thickness.

3 4.36erb stone Director General (Works), CPWD acting as Advisor,PWD, observed that the CCkerb stones on thecentral verge and the footpaths were in goodcondition and need not be replaced. The optionwas ignored and the kerb stones were replaced assuggested by the consultants in nines packages.We noticed that the estimates provided for fixingthe CCkerb stones of richer specificationsdeviated from the specifications as per MoRTH.

4 l.76onMotorisedVehicle lane

NMV lane with obstruction

5 YSC,Africa Avenue etc, Dr Kami Singh, CWG Village, Mall Road, Kisan Ghat etc, Bhairon Marg and two packages of MCD.



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Item of work Audit Finding FinancialImpact(Rs.in Crore)The Non Motorised Vehicle (NMV) lanes wereexecuted at a total cost of Rs.9.36 crore. Thedesigns had deviations from the guidelines issuedby UTTIPECon street design. The NMV lane alsodid not fully meet the intended objectives due tolack of continuity throughout the length of theroads on account of obstructions like bus stops,plaza and road crossings in the middle of theNMV track. We also noticed that while four 6estimates provided for its execution in 150 mmthick CC, roads around CWG village/Mall Roadwere executed with richer specification of 200mm thick Cc.

5 Bituminous While the estimate for the work of roads around 3.40Mastic CWG Village provided for mastic wearing coursewearing for 25 mm on the carriageway as per the MoRTHcourse and CPWD specifications, five' other estimatesprovided it for 40 mm thickness over thecarriageway. We also noticed that such work wasexecuted on Mall Road as an extra item at higherrates.

6 Dense The estimates for roads around Yamuna Sports 2.10Bituminous Complex (YSC)and roads around various Gamesconcrete(DBC} venues (Africa Avenue) provided for execution ofDBCin carriageway and service roads using 60/70grade bitumen. However, the estimates for four 8other works provided for using higherspecification of bitumen (Polymer ModifiedBitumen and Crumb Rubber Modified Bitumen)for the carriageway and service roads. Besides,the DBCwas executed at variable thicknessranging between 40 mm and 50 mm.Total 51.33

Dr Kami Singh Shooting Range/ Bhairon Marg to ITO F ly Over/ Ashram Crossing to Bhairon Marg/roads around variousgames venuesK. Ghat, B. Marg Ashram Crossing, Mall Road and Dr Kami Singh Shooting RangeCWG Village/Mall road/IG Stadium/Dr Kami Singh Shooting Range



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In response to our observations, PWDstated that each package had a separateconsultant with his own vision ofstreetscaping, and hence specificationswere different across the packages. Granite,as proposed by the consultants, was used inthe footpath surface where pedestriandensity was high, with the approval of thehighest authority of the GNCTD.Wedisagree with this, since GNCTD haddecided (July 2008) to use coloured paverblocks on footpaths of the streetscapingworks and EIChad also directed the CEstoavoid extravagant provisions in thestreetscaping works. Hence the CEsshouldnot have allowed surfacing the footpath

As regards discrepancies in specification ofcement concrete paver blocks, PWD statedthat different specifications of paver blockswere prescribed by the consultantsdepending upon traffic category and mergerof cycle track with service lane/maincarriageway. We, however, noted that thespecifications of cement concrete base,granular sub base and thickness/strength ofpaver blocks significantly varied across thepackages irrespective of the nature oftraffic.

with granite stone adopting higher rateleading to escalation in project cost.

Table21.3 - Adoption oj Higher Rates/ Short Recovery.

ReinforcedCementConcrete HumePipes

Item of workKerbChannel

Audit Observation FinancialImpact(Rs.in Crore)Compared to the rate of CCkerb channel adoptedin the estimate of Yamuna Sports Complex, theestimates for five" projects adopted higher rates.

0.25

2. 0.83

Mix Macadam compared to the rate adopted in the estimate forMall Road, compounded by a calculation errorresulting in an even higher rate.

Granular SubBaseand Wet

In five" packages, we found that the rates for GSBand WMM were provided at higher rates

3. 0.54pplicationof tack coat

We found that the rates for the tack coat onbituminous surface/sub base were provided athigher rates in six" estimates compared to thelower rate adopted in Mall Road.

4. 0.93e noticed that the rates of hume pipes werehigher in three" estimates compared to the ratesadopted in the estimate in Mall Road.

9 Ashram to Bhairon Marg, Bhairon Marg to ITO, Mall Road, CWG Village and Dr Kami Singh Shooting Range10 IG Stadium-3 packages, MB Road and Africa Avenue.11 IG Stadium-3 packages, Yamuna Sports Complex (YSCj, CWG Village and MB road12 IG Stadium, Dr Kami Singh Shooting Range and Yamuna Sports Complex



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Item of work5. Dismantling

items

Audit Observation

The rates for dismantling the existing works wereprovided at variable and higher rates in theestimates of YSCand various Games venues(Africa Avenue) compared to other estimates.

FinancialImpact(Rs.in Crore)0.83

6. 0.76luminiumCompositePanel

The rate for fabricating, supplying and installingAluminium Composite Panel for the roads aroundIG Stadium (Bhairon to ITO and Ashram crossingto Bhairon) was incorrectly computed at higherrate.

7. 0.54ement We found that the analysis was incorrectlyConcrete items derived in six" estimates and fixed at higher ratesdue to calculation error.

8. 3.19hort recovery The cost of the useful materials retrieved out offor retrieved the dismantlement works was to be deductedmaterials from the dues of the contractors. This was either

not done, or done at a lower rate in five"estimates.

9. 0.40eo textilefabric

Three" estimates adopted a higher rate for Geotextile fabric membrane in place of lower rateused in estimate of roads around IG Stadium.

8.27TotalGrand Total 59.60

GNCTD stated that the inaccuracies in theestimated rates cannot affect the ratesquoted by the contractors. As such, no losscan be attributed. We disagree with thisassertion of the department since in apercentage rate tender, the bidder canquote only a single figure (% above orbelow) for all the items, unlike in an itemrate tender where each item is quoted forindividually. This makes it essential that the

base cost for the items put up forpercentage rate tender are consistently andaccurately assessed. The CPWD manual alsoprescribes use of percentage rate tenderonly in case where most of the items arebased on DSRwhere the costing of thevarious items has been done by a panel ofexperts. We are of the view that anydiscrepancy in the base rate of an item in apercentage rate tender cannot be easily

13 IG Stadium (three packages), MB Road, various games venues and YSC14 CWG Village, YSC,Mall Road, Dr Kami Singh Shooting range and Africa Avenue15 Mall road, CWG Village and MB Road



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factored in by the bidder, as he does nothave the flexibility of quoting separate ratesfor different items. A higher cost estimatefor any given item will lead to theadvantage being passed on to the bidderalong with his quoted percentage premium.Further, the streetscaping work, thoughexecuted as multiple packages, was a singleproject and it was the prime responsibilityof the CEsto follow common rates across allthe packages for identical items, especiallysince multiple external consultants hadbeen engaged for providing the design.

21.5 Tendering process21.5.1 Useof percentage rate tender

instead of item rate in PWDCPWD Manual provides that percentagerate tenders should be resorted to onlywhen the major part of the estimated costis based on the Delhi Schedule of Rate(DSR), irrespective of the value of thetenders.Of the estimates for Rs.209.14 crore for theeight packages under PWD, 49 per cent ofthe value of the works was estimated at theDSRand the remaining 51 per cent at theMarket rates/Analysis rates. Despite theabove position, which did not favour thecall of percentage rate tenders, the CEschose to adopt percentage rate tenders.21.5.2 Irregularity in award and

evaluation of tenderWe found that repeated efforts were madeto deny the award of a streetscaping andbeautification package (Ring Road, BhaironMarg to ITO Flyover) to SwadeshiConstruction Company, until it chose not tobid:

In response to the NIT (October 2009)for execution of the streetscaping andbeautification, Swadeshi ConstructionCompany, quoting Civil Works 19.41 percent above, Electrical 4.8 per cent aboveand Horticulture 4.8 per cent above theestimated cost, was the lowest. The NITstipulated that in case variablepercentages were quoted, the minimumof the percentages would be taken forcalculating the cost of the tender. TheExecutive Engineer (EE),SuperintendingEngineer (SE)and the CE,accordingly,considered the bidder as L1 andconducted negotiations.

Works Advisory Board (WAB), however,rejected (October 2009) Swadeshi'stender on the ground that they hadquoted component wise rates anddirected calling of fresh financial bidsfrom those who were technicallyqualified in the call notice floated inOctober 2009.

Financial bids were called again(October 2009) and SwadeshiConstruction quoting 16.40 per centabove was the lowest, but the WABagain rejected it on the ground that thefirm refused to negotiate the rates anddirected for retendering.

The work was finally awarded to SharmaConstruction at 9 per cent above theestimated cost on fresh tender (whereinSwadeshi Construction did notparticipate). This resulted in a loss of Rs.1.19 crore compared to the initial validoffer of Swadeshi Construction.

PWD stated that Swadeshi Construction hadquoted three different rates for civil,electrical and horticulture components.Considering these rates, he was not L1 and

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hence his tender was rejected. This wasfactually not correct since, as per the NITclauses, the lowest of the three differentquoted rates was binding for all thecomponents. The EE,SEand CEaccordingly,considered him the L1 bidder andconducted negotiations. Therefore,subsequent rejection of the bid by the WABwas unjustified.21.5.3 Modification in codified criteriaThe CPWD Works Manual 2007 providedthat one of the criteria for selection of thecontractor for the work was that his averageannual turnover during the last three yearsshould not be less than 30 per cent of theestimated cost of the work and that 14 dayslead time should be provided forsubmission of tenders. The CEs, however,enhanced the limit of average annualturnover to 45 per cent. Lead time between4 days and 10 days were provided in sevenof the eight packages. The works were alsofloated to tender by the EEs,before thosewere technically sanctioned by the CEoTheEEsdid not follow electronic-tenderingdespite specific instructions by government.21.5.4 Irregular justification of the

quoted ratesCPWD Manual provided for comparing bidvalues with justified cost to assess thereasonability of the bids. The justified costsare to be arrived at by taking market ratesof labour, materials and cartage, other validcharges etc. Any other suitable method canalso be adopted in arriving at the justifiedcost depending upon the kind of work. Bidsreceived at more than 10 per cent abovethe justified costs are not to be accepted.The department worked out the justifiedrates for the various works between Rs.41.82 crore and Rs. 19.46 crore and justified

that the lowest bids were varying betweenminus 16 per cent and plus 3 per cent of thejustified costs {Annexe-21.1}.We found that the justified costs were notsupported with evidence of the correctnessof the rates. Therefore, we adoptedalternate method for arriving at the justifiedcosts, taking into account the cost indexprevailing then and found that the quotedrates of the contractors in five" packageswere more than 10 per cent of the actualjustified costs and thus, the bids were liablefor rejection. The department, however,accepted the tenders considering thembetween 16 per cent below to 3 per centabove of the justified costs worked bythem. In our opinion, the tenders wereaccepted at high cost.PWD stated that the justified rates werearrived at based on market rates, as per theprovisions of CPWD Manual.We disagree, as we did not finddocumentation in support of the marketrates/analysis of rates. For this reason, asmentioned above, we arrived at thejustified rates using the prevailing costindex on the date of tender {August 2009}and found that the five tenders wereaccepted beyond the permissible limit ofacceptance.

21.6 Physical target vis-a-visachievements

The works split up in 16 packages wereawarded {October-November 2009} to 10contractors at a cost of Rs.332.45 crore{Shown in Table 21.4} for completion bySeptember 2010.16 Kisan Ghat, Ashram to Bhairon Marg, Mall Road, DrKomi Singh Shooting range and Africa Avenue

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Table21.4 - Award oj Streetscaping Work

Name of the Contractor Packages AwardedCostawarded (Rs.in Crore)1 Satya Prakash & Brothers (PWD: Four) 4 124.692 MBL Infrastructure (PWD: One and MCD: Two) 3 85.083 SAM (India) Built Well (PWD) 1 41.954 Sharma Constructions (PWD) 1 31.015 Ralhan Construction (PWD) 1 24.426 Devi Construction (NDMe) 1 6.567 India Guniting Corporation (NDMe) 1 6.488 Raunaq Construction (NDMe) 2 5.289 KBGEngineers (NDMe) 1 5.1710 Raghav Engineer (NDMe) 1 1.81

Total 16 332.45

Payment of Rs.208.02 crore had been madeto the contractors for the various packagestill date. The department had reported(December 2010) to have completed all thestreetscaping works. We noticed that theworks were not completed before the CWG(October 2010) on account of delays inexecution of works by the contractors andnon-providing of designs on time by theconsultants. Evidently, the objective ofstreetscaping and beautifying the roadsaround CWG venues was not fully achieved.In financial terms, the payments so farmade to the contractors were between 34and 97 per cent (averaging 63 per cent) ofthe agreement values. In none of thestreetscaping works were the finalmeasurements/payments recorded,although the works were reportedlyphysically complete.

We found that despite non execution of theworks as per the milestones and noncompletion of the works by the stipulateddate, LDof upto Rs.25.96 crore was notrealised.

21.7 Contract managementUnder the project, the works were awardedto the contractors in PWD on theagreements finalized on percentage ratetender. The management of the contractswas the responsibility of the Engineers-in-Charge and the Officers supervising theworks. The terms and conditions of theagreements were violated on several issuesleading to excess payment and unduebenefits to the contractors, besides extraand excess expenditure of Rs.8.14 crorebeyond the cost of the projects as discussedin Table 21.5.

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Table21.5 - Instances oj Poor Contract Management

1.

Brief of the audit Observation Financial Impact(Rs.in Crore)1.79

0.18

1.45

The scope of the contracts included provision for all safety measures fortraffic, pedestrian workmen, machinery etc. Nothing extra was payableto the contractors on this account.We noticed that in eight packages, an item was included in the BOQfor barricading (traffic safety), resulting in extra payment tocontractors.

2.

Red Sand Stone Bollard Precast Cement Concrete Bollard

1.23

In most of the landscaping works, precast CCcylindrical bollards wereused in NMV lane. However, in Mall Road, precast CCbollard wasreplaced during execution with more expensive red sand stonereadymade bollards.

3.

Granite Stone Block Haryana QuartziteWe found that during execution of footpath of Mall Road, HaryanaQuartzite stone was replaced with granite stone/slab.

4. The scope of the work of Mall Road did not provide for execution ofDBM in the entire stretch of the road. The contractor, Satya Prakash &Brothers Private Limited, however, executed DBM in the entire stretch.We noticed that during the identical time period, the tendered itemrates for DBM in other works were lower than his tendered rate. Theexecution of the item through him at higher rate translated to anadditional financial advantage.



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.We also noticed that Satya Prakash & Brothers Private Limited did notremove the malba from the work sites of roads around YSCand roadsaround CWG Village. The department removed malba through IL&FSbut did not recover the cost from the contractor. IL&FSwas paid Rs.280.32 per MT of malba against Rs.73.42 per MT as per the agreementrate for Satya Prakash & Brothers.

Brief of the audit Observation

We found that despite the above specific provisions, the agreementsprovided an item in the BoQ for removal of malba, enabling extrapayment to the contractors.

3.49

Financial Impact(Rs.in Crore)As per conditions of the contracts, the contractors were to remove themalba at their cost and risk.

6.

Scarified Mehrauli Badarpur RoadMehrauli Badarpur Road, a State Highway, was scraped for constructionof a footpath, reducing the width of the road. This had reduced thetraffic carrying capacity of the road.

Total 8.14

21.8 Unwarranted engaging ofThird Party QualityAssurance/Control (TPQC)

The TPQC works were entrusted for fourpackages each to the DCE (Dr S K Singh for

appointed by the EIC for independentquality assessment/control. Necessary testsof the materials and specifications were tobe conducted in the laboratory ofDCE/PWD/CRRI/IIT Delhi/liT Roorkee or anyother laboratory approved by the EIC.

The agreements provided for Third PartyQuality Control (TPQC) for the projectseither by the Delhi College of Engineering(DCE)/CRRI/IIT, Roorkee or any other agency

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three packages of IG Stadium and roadsaround various Games venues) and liTRoorkee (Dr SSJain for the Yamuna SportsComplex, around the Games Village, M BRoad and Mall Road) after lapse of about 50per cent of the period of the agreements.While the scope of the works for Dr Singhcovered the civil works in entirety, for DrJain it covered only the bituminous andconcrete items.We found that the team led by Dr Jainvisited the work sites for two days each andsubmitted job mix reports of bituminousitems for three packages and rated thestandard of work as very good. Dr Singhconducted site visits between eight to 14days for four packages and submitted onlytwo-three page reports for each packagebroadly indicative of visual work supervisionsuggesting minor improvements in finishingitems. The amount of supervision providedby TPQC, and the quality and quantity ofoutput by the consultants leads us toconclude that the TPQC had actually failedto provide independent quality assurance tothe management of the specifications andmaterials used in the works rendering theexpenditure of Rs. 1.47 crore (Dr. SSJain:Rs.0.48 crore and Dr. S KSingh: Rs.0.99crore) on TPQCwasteful.

21.9 Horticulture Works21.9.1 Adoption of different rates in the

estimates for identical itemsAs per CPWD Works Manual, the detailedestimate should be based on the rates givenin the DSRfor those items of work coveredby it and by analysing market rates for theremaining items. We noticed significantvariations between rates adopted in the

estimates for identical items of horticulturework across the packages under PWD. Thevariations ranged between 12 and 400percent. The adoption of variable rates forsame items without considering theminimum possible ratejDSR rate led toextra cost of Rs. 1.08 crore as shown in thetable in Annexe 21.2.Further, the retired Director (Horticulture)acting asConsultant to EICfor horticultureworks mentioned that the consultants hadsuggested landscaping planting withexpensive plants like Cycus revolute, Ficuspanda and Furcaria without consideringclimatic conditions, and their adaptabilityand suitability for Delhi roadsj venues. AlsoPhoenix (Khajoor), a desert plant, and Palm,a coastal plant, had been suggested forDelhi roads. His suggestions for dispensingwith these plants were, however, ignored.The overall estimated financial impact ofthese plants was Rs. 1.10 crore in sevenpackages covered in audit.

21.10 Unwarranted CostlyElectrical Furnishing

The consultants suggested design forelectrical lighting work by specifying costlyelectrical furnishing, some of themimported. The quotations for the itemswere obtained by the consultants. Theestimates were technically sanctioned bythe CEswithout verifying the actual cost ofthe items prevailing in the market. Thepossibility of procuring such items fromindigenous companies was not explored.We observed one instance where electricalfittings costing over Rs.50 lakh wereinstalled in a small area of 10 metre by 15metre.

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Fittings worth over Rs. 50 lakh installed opposite IG Stadium

A few high cost electrical fixtures are shownbelow. We are of the view that thegovernment was unnecessarily burdenedwith this expenditure on overpriced lightfittings in the name of aesthetics. Each ofthese items was specified by brand namewithout giving a generic description,thereby favouring a particularmanufacturing company. Further, these

high cost items were included in apercentage rate tender, whereby the truecost of procurement cannot be easilyassessed. We have found from someinvoices that the costs of the fixtures werefar less than the costs adopted in theestimates. Due to adoption of high cost,undue benefit for Rs. 0.83 crore (Appendix-III) was passed on to the contractors.

Table21.6 - Instances oj high cost electrical items Item Rate per unit(Rs. in lakh)1. 4.30emo TorchKeselecSchreder(Roads aroundIGStadium)

Amount(Rs. in crore) Photograph of the item

1.05



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.Chapter 21 - Streetscaping and Beautification of Roads around CWG Venues

ItemTrapeze PoleKeselec Schreder(Roads aroundIGStadium)

Rate per unit(Rs. in lakh)4.54

Amount(Rs. in crore)

0.33Photograph of the item

3.

4.

Decorative Streetlight-JUNIPER,Bajaj (RoadsaroundIGStadium)

Nemo PoleKeselec Schreder(Roads aroundIGStadium)

0.33

0.49

2.07

0.75



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Item Rate per unit(Rs. in lakh)8. 2.91chreder-CFL36watt(SafdarjangFlyover)

21.11 Greening of Gamesvenues by using pottedplants

The Chief Secretary, GNCTD proposed(August 2008) for creation of 30-50 lakhpotted plants for deployment around theCWG venues and other areas for providing apleasing environment. He also soughtimmediate approval of Chief Minister (CM)since creation of such a large pool of pottedplants would require at least two yearstime. The CM approved the proposal inAugust 2008. We could not find any venuewise break-up of the plants required or anyother yard stick in support of theassessment of the requirement of theplants. The Secretary (E&F), however,decided in a meeting for arranging 60 lakhplants either by local planning or importingfrom outside the state and assigned thetask to DDA, MCD, NDMC, ForestDepartment (FD), and Delhi Parks & GardenSociety (DPGS)for 10 lakh each, and PWDand CPWD at 5 lakh each.

Photograph of the itemmount(Rs. in crore)1.11

GNCTD sanctioned Rs. 28 crore for thisproject, of which an amount of Rs.24 crorehad been spent by the agencies (underGNCTD) given the task of arranging thepotted plants.We observed that: The target for arrangement of potted

plants was set 20 per cent higher thanthe amount estimated earlier andapproved by the CM.

Most of the potted plants wereprocured instead of being created in thedepartmental nurseries as originallyenvisaged. Commissioner of Policeintimated (June/August 2010) to keepthe plants away from the venues and theroutes on account of security concerns.Of the amount of Rs.24 crore spent onthe procurement of the potted plants,DPGS,FDand PWD spent Rs.10.75 croreon procurement (June-October 2010) of18.76 lakh plants from private nurseries/government nurseries outside the state(at average rates ranging between Rs.44



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and Rs.65 per plant), even after receiptof the information from theCommissioner of Police.

The original objective of greening thevenues could not be achieved in the lightof the advice of Commissioner of Police,rendering the expenditure wasteful.

PWD informed that post Games, of the 3.82lakh potted plants procured by them, 0.79lakh perished being seasonal and most ofthe remaining plants were distributed tovarious government offices. We visited twoof those sites at random, and could not findthe potted plants stated to have beenissued.

21.12 Street furniture in thevicinity of Games venues

21.12.1 Planning for Street FurnitureStreet Furniture (SF)is a collective term forobjects and pieces of equipment installedon streets and roads for various purposes.As part of city infrastructure upgradation,the streetscaping and beautificationconsultants (appointed between May 2008to November 2008 by different agencies)also prepared the street furniture plans forthe three agencies (MCD, PWD and CPWD).The street furniture items to be put upincluded information kiosks, police booths,vending kiosks, public toilets, tree guards,bus queue shelters, dust bins, informationpanels, benches and free standing panels.The consultants provided street furnituredrawings containing nature, quantum andlocation of the SFitems in accordance withtheir overall landscaping plan for identifiedroads.NDMC was appointed as the nodal agencyin August 2008 for the project. DIMTS was

appointed as the Transaction Advisor (June2009) on nomination basis for evaluatingEOI submissions; data collection and projectstructuring; and preparation of biddocuments and bid process management.

Street furniture - Public convenience

The SFproject was to be implemented onBOT basis, with advertisements on thestreet furniture created and revenue fromoperations during the contract period in theform of quarterly concession fee (QCF)being the revenue source.To achieve uniformity in design of SFitemsaround a particular venue, DIMTS, inconsultation with NDMCjMCDj PWDgrouped roads around the Games venuesinto five clusters - Delhi University, IGIStadium, R.K.Khanna Tennis Complex, SiriFort Sports Complex and Dr. Karni SinghShooting Range, and the Games Village andYamuna Sports Complex.

The chronology of events for the planningand award of contracts for street furnitureis summarised in Table 21.7.



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Table21.7 - Chronology oj Events[or Award oj Street Furniture ContractsTime Events/Activity

August 2008 NDMC appointed as nodal agencyMay-November 2008 Streetscaping consultants appointed by different agenciesMay 2009 EOI called by NDMCJune 2009 DIMTS appointed asTransaction AdvisorJune 2009 Short listing of biddersNovember 2009 Street furniture requirement report by DIMTSJanuary 2010 Issue of RFPby MCD for 3 clustersApril 2010 Issue of RFPby DTTDC (on behalf of PWD) for 5 clustersFebruary/ May 2010 Opening of financial bids by MCD and DTTDC/ PWDMarch/ June 2010 Award by MCD for clusters 2,3 and 4 for concession period of 7 yearsMay/ June 2010 Award by DTTDC/PWD for clusters 1, 2, 3, 4 and 5 for concession period of15 years

21.12.2 Tendering irregularitiesOut of eight companies that responded tothe EOIf loated in May 2009 by NDMC, fivecompanies fulfilled the criteria of net worthgiven in the EOIdocument and were alsopre-qualified for issuing of RFPs. J.C.Decaux Advertising Pvt. Ltd. Graphisads Pvt. Ltd. Laqshya Media Pvt. Ltd. Adlabs Films ltd. Hindustan Publicity Pvt. Ltd.A sixth company, MEC, did not fulfil the networth criteria, but was irregularly pre-qualified on the strength of its parentcompany.

Street furniture - Traffic police booth



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We found the following deficiencies in thetendering procedure adopted by theagencies: Selection of six bidders merely on thebasis of net worth fixed for each cluster

was restrictive. The value of work in thedesired field in the last few years wasnot considered at all. Further, DTTDC(which implemented the project onbehalf of PWD) and MCD increased thenet worth criteria fixed by NDMC(differently for different clusters),making it even more restrictive.

Six bidders quoted for four clusters incase of DTTDC/ PWD. In the technicalevaluation by the Board of Assessors,the minimum qualifying marks werefixed as 70 for the technical bid. Twoagencies, MEC and Hindustan PublicityPvt. Ltd. scored less than 70 marks andtheir financial bids were not opened.Thus, in three out of four clusters, singlebids were received/ remained.

Bids for cluster 5, i.e. Games Village andYamuna Sports Complex were re-tendered by DTTDCwith modifiednumbers of street furniture items,modified net worth and bid securityrequired from the three eligible bidders,giving them 7 days for bidding. Thework was awarded to the sole bidderAdlabs Films Ltd (Reliance MediaWorld).

Interestingly, all the four bidders whohad qualified the technical bids forDTTDC/ PWD, secured one contracteach. In our opinion, there was no needfor urgency for re-tendering for cluster5, since the stipulated time forcompletion of four months from the

Letter of Award fell beyond the date ofconclusion of the Games.

In case of MCD too, single bids werereceived for three clusters - Graphisadsfor IGI and JLNComplex cluster and R.K.Khanna cluster, and MEC for the Siri FortSports Complex cluster. The single bidswere accepted on the ground that thecaptioned projects related to the CWG.The works were awarded just three anda half months before the Games, with acompletion period of three months.

The agencies had not estimated therevenue expectation from the clusters, andno reserve prices were set. Since nearly allof them (7 out of 8) were single bids, therewas lack of competitive tension, and thereis no assurance regarding generation ofmaximum revenue.The table 21.8 shows wide variationsbetween the monthly concession rates(calculated on a per sq.m basis) acrossdifferent agencies, which further confirmsinadequate exploitation of the full revenuepotential, and corresponding undue favourto the bidding contractors.



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Table 21.8 - Wide range of monthly concession rates for street furniture items(Rangeof rates in Rs.per sq.m)

Public toilets 54 714 238 472Vending Kiosks 32 606 33 152Police booths 32 303 20 48Information Panels 76 1816 91 439Free standing panels 124 629 97 850Auto pre paid booths 32 397

Street FurnitureItems

PWD/DTTDCMinimum I Maximum therbenchmarksPWD/DTTDCMinimum I Maximum

159

MCDHighEndToilets(IRRstatement) -1291DIP17_985DTC-796 to1592

270161161380692

The rates for PWDj DTTDCand MCD arecomparatively lower, despite the concessionperiod of 15 years and 7 years (against theoriginal period of three years indicated inthe EOI). The long term revenue loss isserious, although it cannot be fullyquantified in the absence of reliable andcomparable benchmarks.21.12.3 StatusThe delayed planning and award of SFcontracts for different clusters meant thatmost were not ready in time for CWG-2010.

17 Department of Information and Publicity

In fact, two bidders - JC Decaux and Adlabs- indicated, even before the award, thatcompletion would take longer, since manyof the SFitems were imported and deliverywould take time.Most of the SFclusters for DTTDCjPWD(which were awarded later than MCD) wereincomplete, ranging from 60 - 90 per centfor 4 clusters, with only one clustercomplete as of March 2011. The MCDcluster had, however, been completed as ofMarch 2011.



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CAG's CWG Audit Report - Chapter - 21 (2011)

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