In 2012-13, KIADB caused a loss of Rs 104 cr: CAG report

Developed land allotted to three firms without government approval

In 2012-13, KIADB caused a loss of Rs 104 cr: CAG report

 The Comptroller and Auditor General (CAG) on Wednesday stated that the Karnataka Industrial Areas Development Board (KIADB) had caused a loss of Rs 104.40 crore to the State exchequer for the year ending March 2013.

The CAG, in its report on the economic sector, has noted that the KIADB allotted developed plots (128 acres) to three industrial units in Narasapura Industrial Area, Kolar, at subsidised rates. The first beneficiary company is Mahindra Aerospace Private Limited, which was allotted 20 acres of developed land (in lieu of the original 12 acres of undeveloped land that was approved by the government).

The second beneficiary company was Honda Motorcycles and Scooter India Private Limited for establishing their third factory. It was allotted 119.05 acres of developed land at a subsidised rate. The third company which benefited from the same kind of deal was Cerebra Integrated Technologies Limited for establishing an ‘e-waste recycling plant’ as proposed.

The CAG has noted that the developed land was allotted to the three firms, despite the State government approving only the allotment of undeveloped land. The CAG has calculated that the cost per acre of allottable area of developed land worked out to Rs 1.10 crore and the allotment at concessional rate has caused a loss of Rs 104.40 crore.

Magadi scam

Several irregularities in the allotted funds by the Public Works Department towards projects in Magadi sub-division have also been highlighted. The scam, which has been in the limelight for close to two years, was probed earlier by a Joint Inspection Team and a House Legislators Committee.

In its report, the CAG has noted that the Magadi sub-division was allotted Rs 250.62 crore during 2011-12, 27 times over and above the allocation to the sub-division during the preceding three years.

It has said that fraudulent payments of Rs 1.70 crore were made by preparing fake bills in several projects undertaken in the sub-division during the said period. “The estimates were split up so that they are below Rs 20 lakh each and manual tendering was adopted for 1,311 works,” notes the CAG. It has noted that the Earnest Money Deposit and Performance Security were not collected and 891 contracts out of the 1,311 tenders were bagged by three contractors.

The report has said that improper and deficient scrutiny prior to release of grants for establishing 12 biotechnology finishing schools resulted in excess release of grants towards ineligible investments. The ineligible investments aggregated to Rs 7.93 crore, of which Rs 4.39 crore subsequently remained unutilised.

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