Anna Effect: Prior CAG clearance sought for Rs 30k crore housing project for the paramilitary forces

NEW DELHI: In the backdrop of the Comptroller and Auditor General's scathing reports on award of 2G telecom licences and projects related to the Commonwealth Games, an extra-cautious Ministry of Home Affairs is seeking the audit of the processes of the proposed Rs 30,000-crore housing project for the paramilitary forces by the country's statutory auditor. This would be the first instance of pre-award scrutiny by the CAG.

"We have received the reference," a CAG official told ET.

The Ministry of Home Affairs has already received expression of interest for the project to be implemented on a public-private partnership basis, but it wants the CAG to audit the processes before the project is awarded.

"It's always better to err on the side of caution," said a government official privy to the development. "It's better to get the auditor's comment before the award of the contract so that if there is a lacuna it can be removed and a more robust process can be evolved," he added.

The public angst over corruption in the government saw a massive outpouring of support for Anna Hazare's fast for a strong Lokpal, an institutional arrangement to check misuse of power and graft. Additional due diligence can impart more credibility to the process followed, especially in the current circumstances, said another government official.

The CAG had issued comprehensive guidelines for audit of PPP projects in 2009, a model that has become the mainstay of country's infrastructure development. It has already audited production sharing contract between the government and Reliance Industries for Reliance's D6 field of KG Basin.

Audit of PPP projects came into focus after Prime Minister Manmohan Singh raised the issue at a conference in 2008. "Public Private Partnership Projects are becoming increasingly common in key infrastructure sectors of transport, power, urban infrastructure, tourism and railways. Audit needs new skills to evaluate these complex arrangements," Singh had then said.

The Ministry of Home Affairs will take the proposal to the Cabinet Committee on Infrastructure for its approval after the CAG audit.

The project, announced by finance minister Pranab Mukherjee in his 2009-10 budget, envisages building one lakh dwelling units for paramilitary forces in the PPP mode. The government will provide land for the development of these houses that will be built and maintained for 15 years by the builder. A

fter completion of 15 years, these will be transferred to the government. The government will pay a monthly installment towards the maintenance and the builder will also be allowed to sell additional units that it manages to build in the given land.