The CAG report released on Tuesday
Bhubaneswar: The state govt suffered a revenue loss of Rs 76.38 crore due to the public works department’s failure to impose liquidated damages on defaulting contractors, the comptroller and auditor general (CAG) pointed out in its latest report tabled in the state assembly on Tuesday.According to the report, the contractors delayed 95 road and bridge projects, with delays ranging from 18 days to as long as 1,609 days, yet they were not penalised despite clear provisions in contract agreements allowing the department to recover penalties for time extension.The CAG noted that the affected projects, awarded between Aug 2018 and March 2023, had a total estimated cost of Rs 763.84 crore, with agreement values pegged at Rs 693.51 crore.
Against this, extra expenditure of Rs 385.97 crore was already incurred, even though many projects remained incomplete as of Nov 2023.“As per the conditions of contract, liquidated damages of up to 10% of the estimated project cost were to be imposed for delays beyond the stipulated completion period. However, concerned superintending engineers neither issued any show-cause notices nor levied penalties,” the audit observed.
In a significant lapse, the CAG found that contractors did not even apply for extension of time (EoT), a mandatory requirement under the Odisha Public Works Department Code for regularising delays, yet no action was initiated by the department. Audit rules stipulate that penalties must be levied in cases where EoT is neither sought nor granted.The report warned that prolonged delays deprived citizens of timely access to critical road and bridge infrastructure, impacting connectivity and public convenience.
Several projects showed financial progress ranging from 0% to 97%, indicating wide variation in execution despite the expiry of contractual timelines.In its response, the state govt reportedly told auditors that liquidated damages would be imposed after analysing reasons for delays. However, the CAG rejected this explanation, pointing out that no justification existed for withholding penalties when contractors failed to seek EoT or complete works within stipulated periods.The audit recommended that the department strictly enforce agreement clauses in future and impose penalties wherever delays are unjustified, warning that repeated lapses could undermine financial discipline and accountability in works.
