Sans pact, CITCO operates canteen at UT Secretariat, Chandigarh

Dushyant Singh Pundir

Tribune News Service

Chandigarh, September 25

In the absence of any agreement with the UT Administration, Chandigarh Industrial and Tourism Development Corporation Limited (CITCO) had incurred net expenditure of Rs9.79 crore for running a canteen at the UT Secretariat, Chandigarh, and a guest house in Delhi till March 2018, revealed the report of the Comptroller and Auditor General (CAG) tabled in Parliament on Wednesday.

“CITCO operated a canteen in the UT Secretariat in Chandigarh and a guest house in New Delhi without any agreement or operational arrangement and incurred a deficit of Rs8.27 crore and Rs1.52 crore, respectively,” finds the report.

The report states that the Board of Directors (BoD) of CITCO had approved the arrangement for operations of canteen considering it a package deal from the UT Administration, which also involved transfer of hotels and cafeteria. The operations and management of the guest house in New Delhi were approved by the BoD on the request of the UT Administration, considering the lack of accommodation facilities in New Delhi for visiting officers.

However, CITCO did not enter into any agreement or even reach an understanding regarding terms and conditions for performing such functions at both establishments.

A draft agreement for the UT Guest House in Delhi was sent by CITCO to the Administration for execution only in May 2016, which is yet to be formalised (July 2019). CITCO did not seek any agreement in respect of the UT Secretariat canteen in Chandigarh.

CITCO operated a similar guest house in Chandigarh on behalf of the UT Administration, where an agreement for defraying the expenses was available.

CITCO had incurred net expenditure of Rs8.27 crore from 2004-05 to 2017-18 for running the UT Secretariat canteen and Rs1.52 crore for the UT Guest House in Delhi from 2009-10 to 2017-18.

In view of the financial constraints and declining profitability, CITCO took up the matter with the UT Administration for reimbursement of the expenditure only in February 2014, but to no avail.

The management replied in August 2018 that these activities were taken up as ‘a social function on a non-commercial basis’. It further stated that the issue of reimbursement of expenses with the UT Administration has also been followed up periodically.

“The management’s contention that activities were taken up as a social function on a non-commercial basis is not acceptable as CITCO was set up as a commercial undertaking and supplying food items at subsidised rates to the UT Administration employees or running the UT Guest House in Delhi without reimbursement of expenses incurred is not covered under its object clause in the Memorandum of Association,” states the report.

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