NEW DELHI: Speaking on probity issues in public procurement and contract management in public-private partnership projects, Comptroller and Auditor General (CAG) GC Murmu has told a meeting of top secretaries of key ministries and heads of PSUs that there is absence of a dedicated procurement law at the Union level and no uniformity in procurements is leading to deficiencies in services and cost overruns.
The CAG was invited by Central Vigilance Commissioner Sanjay Kothari to address a select group of top bureaucrats and heads of public sector undertakings (PSUs) on reforms required in public procurement and project management here on Friday. According to CVC, government procurements of goods and services constitute around 20% of the GDP, worth at least Rs 40 lakh crore annually.
“There are five major government bodies to check procurement probity issue in India (including CAG, CVC, Competition Commission of India and CBI).. however, as I have mentioned earlier due to lack of uniformity and in the absence of clear practicable directions there are many grey areas which lead to post contract complications and arbitrations etc,” the CAG said.
Since public procurement constitutes about 20-30% of the GDP, this makes the need for integrity not merely an ethical requirement but an economic and social one too, he told the gathering.
Sources said that the supreme auditor expressed his concern at lack of a uniform policy on all government procurements while pointing out “inadequate preparatory work” in PPP projects.
“The main concerns are inadequate preparatory work in relation to the framework for PPP projects, identification of projects, selection of private participants, preparation of strategic plan and project reports, drafting of contracts,” he said, adding that these issues often lead to excessive transaction costs, years of delay in project implementation, inadequate quality, and large contingent liabilities to the government.
On the Engineering, Procurement and Construction (EPC) contracts, the CAG said that one of the main issues is assessment of capability, especially the financial capability of the potential contractor. “There is lack of appropriate eligibility conditions and lack of uniformity across the board,” he said.
The CAG was invited by Central Vigilance Commissioner Sanjay Kothari to address a select group of top bureaucrats and heads of public sector undertakings (PSUs) on reforms required in public procurement and project management here on Friday. According to CVC, government procurements of goods and services constitute around 20% of the GDP, worth at least Rs 40 lakh crore annually.
“There are five major government bodies to check procurement probity issue in India (including CAG, CVC, Competition Commission of India and CBI).. however, as I have mentioned earlier due to lack of uniformity and in the absence of clear practicable directions there are many grey areas which lead to post contract complications and arbitrations etc,” the CAG said.
Since public procurement constitutes about 20-30% of the GDP, this makes the need for integrity not merely an ethical requirement but an economic and social one too, he told the gathering.
Sources said that the supreme auditor expressed his concern at lack of a uniform policy on all government procurements while pointing out “inadequate preparatory work” in PPP projects.
“The main concerns are inadequate preparatory work in relation to the framework for PPP projects, identification of projects, selection of private participants, preparation of strategic plan and project reports, drafting of contracts,” he said, adding that these issues often lead to excessive transaction costs, years of delay in project implementation, inadequate quality, and large contingent liabilities to the government.
On the Engineering, Procurement and Construction (EPC) contracts, the CAG said that one of the main issues is assessment of capability, especially the financial capability of the potential contractor. “There is lack of appropriate eligibility conditions and lack of uniformity across the board,” he said.
