CAG flags up to 500% cost escalation in Haryana projects

The Comptroller and Auditor General (CAG) has flagged massive cost escalations in public works executed in Haryana between 2019 and 2022, with 98 test-checked projects across 11 departments, autonomous bodies and PSUs showing enhancements ranging from 50% to over 500% of the original agreement value.

Range of enhancements in 98 projects

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Range of enhancement    Original agreement      Enhanced amount

Up to 50% (40 works)    ₹210.89 cr  ₹280.03 cr

50–100% (27 works)      ₹783.97 cr  ₹1,307.96 cr

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100–500% (27 works)     ₹132.99 cr  ₹350.81 cr

Over 500% (4 works)     ₹6.68 cr    ₹58.48 cr

According to the audit, works worth Rs 1,134.53 crore were awarded but ended up costing Rs 1,997.28 crore. In 27 projects, the enhancement ranged between 100 and 500%, while in four cases it exceeded 500%. In another 27 works, the escalation was between 50 and 100%.

The CAG observed that the Haryana Public Works Department (HPWD) Code requires revised administrative approval for additions and alterations beyond 10% of the project cost. However, in several cases this was ignored. “There was failure of monitoring as the office of the Engineer-in-Chief, PWD (B&R) kept on releasing payments over and above the agreement amount without calling for revised detailed estimates and proposals for enhancements,” the report said.

Stadium upgrade crosses Rs 114 crore

One of the glaring examples cited is the Ambala Cantonment stadium upgrade. Initially estimated at Rs 45.58 crore and awarded at Rs 40.49 crore in 2017 with a 24-month timeline, the project has already seen payments of Rs 114.03 crore by May 2021, though it remains incomplete.

A committee of engineers later reported that “Rs 65.38 crore had been paid in excess to the contractor on account of unexecuted items and excess rates for non-scheduled items.” The enhancement was processed without approval of higher authorities.

NCC Academy, medical university projects

Similarly, phase 1 of the NCC Academy at Gharaunda, Karnal, was allotted for Rs 17.91 crore but payments worth Rs 42.17 crore were made till September 2020. Work has remained stalled since then. The CAG noted, “The site conditions were not assessed at the time of preparing the detailed estimate, inviting tenders, and commencement of work, which resulted in an increase in the cost of various works.”

At Kalpana Chawla Medical University, Karnal, a boundary wall project awarded at Rs 21.66 crore eventually cost Rs 36.96 crore. All three works — the stadium, NCC Academy and boundary wall — were awarded to the same contractor, the audit revealed.

War memorial, other works

The CAG also cited the construction of a war memorial in Ambala, where the original agreement of Rs 189.41 crore signed in June 2018 was later revised to Rs 362.56 crore, a 91.42% hike.

In Public Health Engineering Divisions, some tenders were initially kept below Rs 1 lakh to avoid e-tendering and later enhanced. Five projects costing Rs 77.89 crore ended up at Rs 178.13 crore, while in 14 cases, Rs 255.70 crore was paid against sanctioned Rs 108.91 crore without necessary approvals.

The audit further reported that contractors were given undue benefits of Rs 73.73 crore by allowing higher rates, of which only Rs 6.64 crore has been recovered so far.