Bhubaneswar: The Bhubaneswar Development Authority (BDA) has incurred a loss of Rs 2.62 crore as it could neither develop the proposed citizen-centric services through IT-based platform, nor could it terminate the contract despite the failure of the project, a report of the Comptroller and Auditor General (CAG) of India said Sunday.
As per the CAG report, the BDA had selected a private firm, VFS Global Services Limited (VFSGSL) through an open tender floated in September 2014 to undertake the job of streamlining the system of issuing building plan approval, occupancy certificates, procedures for allotment of assets and other citizen-centric services through IT-based platforms.
However, VFSGSL failed to develop the project. As per norms the BDA should have scrapped the contract, but it did not rescind the contract even when the state government had decided to hire another agency.
“As per the state government, any competent authority, before proceeding to outsource services, should estimate the cost by consulting other organisations engaged in similar activities and also ensure that available budget provision is adequate for the purpose. However, the BDA did not estimate the cost of outsourcing before engaging VFSGSL. It entered into a formal contract in Nov 2014 and paid VFSGSL Rs 2.62 crore between 2014 to July 2017,” the report said.
“The firm did not develop IT-based solution for processing the applications and continued with the manual mode of throughout the contract period (December 2014 to August 2017) despite contract mentioning use of physical mode for only a period of first three months.
BDA had the right to forfeit all outstanding payments and terminate the contract. However, it continued to make payments to VFSGSL. During June 2015 to August 2017, the BDA paid Rs 2.62 crore to the firm which should not have been paid as per the terms of the contract,” it added.
The report also mentioned that the BDA accepted the fact that VFSGSL was supposed to develop IT solution by the
end of February 2015. The Vice Chairman, BDA in June 2019 stated that since the state government had decided to engage another agency for developing IT solution for building plan approval process during the same period, automation work by the Process Manager was put on hold and manual process continued till August 2017.
“Thus, continuance of VFSGSL without development of IT solution did not fulfil the objective of outsourcing, as VFSGSL continued with the manual processes along with the existing officials of BDA. The entailed cost of Rs. 2.62 crore was thus infructuous,” the CAG observed.