The Comptroller and Auditor General of India (CAG) has found deficient planning of Madhya Pradesh State Tourism Corporation (MPSTC), which had been awarded national level awards for best performance and planning by the Union tourism ministry recently. MP tourism officials received awards from the Union Tourism Minister Subodh Kant Sahay in New Delhi.
The CAG, in its report, has observed due to deficient planning of the company, an expenditure of Rs 64 lakh, incurred on the construction of an unviable project, remained unfruitful. It has also pointed out that persistent failure of the company in maintaining desired level of power factor and non-reduction in the contract demand resulted in avoidable expenditure of Rs 13 lakh.
In its ‘commercial’ report for the year ended March 31, the CAG said, “With a view to promoting tourism, the company decided to construct a cafeteria in the campus of Hotel Subahar at Maihar district, Satna, at an estimated cost of Rs 3 million. The proposal was given to the state government, which was approved. Accordingly, funds to the extent of the estimated cost of the project were allocated by the state government from the grants meant for religious tourism. The cafeteria was constructed at a final revised cost of Rs 6.4 million and became operational in October 2008.
“We observed that the proposal of the company for construction of the cafeteria was not need-based. The company did not carry out any feasibility study and cost-benefit analysis in a scientific manner, duly taking into account all relevant factors. As a result, during the nine months of its operations from October 2008 to June 2009, the maximum monthly sales of the cafeteria were recorded at a considerable low value of Rs 26,000. The sales had further decreased to its lowest at Rs 8,000 in June 2009. Consequently, the company stopped the operations of the cafeteria in July 2009 and shifted the dining hall and activities of the old restaurant in the cafeteria. The premises of the old restaurant was lying unused since July 2009,” the CAG report said.
Further, the report said, due to non-operation of detailed estimates, the cost overrun of Rs 3.4 million, for which no government approval existed, had to be met from the resources of the company. “Thus, due to deficient planning of the company before taking up the project without adequate feasibility study on its viability, it has resulted in expenditure of Rs 6.4 million incurred on the construction of the cafeteria to be unfruitful.
“The company should also ensure prior approval of the state government towards the project cost and also for the cost overrun caused due to unavoidable reasons.
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The CAG has also found flaws in a light and sound show at Khajuraho. “During transit audit of the Khajuraho unit for the year 2008-09, we noticed that the company was not able to maintain power factor at desired level and also failed to reduce contract demand of 117 KVA despite existence of actual demand ranging from 23 KVA to 41 KVA which resulted in payment of avoidable fixed charges of Rs 1.9 million, including demand charges of Rs 239,000, on higher contract demand for the period from April 2007 to February 2010, besides penalty of 202,000 for low power factor.
After being pointed out by us, the company applied for reduction in the contract demand,” CAG reports said and pulled up the corporation, “We observed that the action taken by the company lacks justification as the corrective measures for reducing the contract demand had been initiated by the company only in August 2010 after a long gap of more than three years of admittance of the lapses (November 2006) by its managing director before the committee of public undertakings”.