MUMBAI: A comptroller and auditor general (CAG) report tabled in the state legislative assembly on Wednesday has pointed out that the state industrial development corporation (MIDC) directly allotted 15 industrial plots instead of e-bidding or auctioning them.
Around 103 plots were allotted despite their non-availability with the MIDC, the CAG report said.
Around 28 industrial plots were allotted to 23 companies on an alternate basis at old rates while in 32 cases it was found that MIDC re-allotted them and did not forfeit earnest money deposits made in the earlier bids, the report said pointing out that these administrative and financial irregularities clearly overruled the policies and management’s mandate.
“Decisions were in violation of the laid down policy of e-bidding and were taken by the board overuling management proposals which were in line with the policy. Allotments were made on selective basis without framing a policy for land allotment for the stated purpose, which would have enabled all interested applicants to avail benefit of direct land allotment,” said CAG in its remarks in various cases.
Meanwhile MIDC in its clarifications to the CAG said, “Its decisions were on merit and taken consciously to encourage entrepreneurs. There was an increase in demand for products of certain companies and thus they were in need of more land for the project. In a few cases the decisions were taken to meet covid 19 emergencies. Similarly in a few allotments the parties were the sole bidder for the plot.” In case of old allotments, MIDC said since they were via auction and new allotments were at the highest rate in the previous auctions, there were no financial losses.
CAG said the Board of MIDC took important decisions having financial implications overriding the extant rules/policy in cases of land allotment, levy of lease premium/transfer charges/extension charges and sub-letting charges in favour of private parties. “Relaxation in rules/policies on a case to case basis, lacked transparency and brought in arbitrariness in decision making and governance causing loss to public exchequer,” it said directing MIDC to ensure strict implementation of regulations and laid down policies in land allotment and recovery of charges.
“MIDC made direct allotment of plots to ineligible allottees contrary to the laid down policies (such as e-bidding, waiting list, priority and expansion). Further, allottees were issued offer letters for allotment of land despite non-availability of carved out plots in violation of MIDC Regulations. Instances of undue concession to allottees in recovery of revenue from lease premium, transfer charges, Urban Land Ceiling (ULC) Exemption transfer charges, extension charges and sub-letting charges were observed. Irregular grant of instalments for payment of lease premium and non-forfeiture/refund of lease premium in violation of regulations/policy were also observed. MIDC may ensure prompt recovery of dues from allottees as per laid down policies and responsibility needs to be fixed for granting undue concessions to allottees,” the report stated.
“MIDC did not formulate any programme/plan for achievement of targets set in the State Industrial Policy (SIP). MIDC also did not have a perspective plan for land acquisition, development and allotment activities detailing physical targets to be achieved. In the absence of any physical targets, there was no benchmark to assess performance of MIDC,” CAG said asking MIDC to prepare plans quantifying physical targets to be achieved.
“There was no database/system to ascertain/record allottee wise details regarding actual employment generated and investment made by an allottee vis-a-vis the DPR. MIDC, thus, confined its role to development/allotment of land. MIDC may evolve a system of recording/monitoring of actual investment and employment generation and ensure that expected outcomes of industrial development from such land allotment are achieved,” the report suggested.
“MIDC did not ensure timely finalisation of tenders within the validity period as per delegation of powers which resulted in cancellation of tenders and re-tendering at extra cost. MIDC may ensure timely finalisation of tenders within the validity period in accordance with delegation of powers to avoid re-tendering of works. Policy of fixation / revision of land rates was not appropriate. Systemic delays in implementation of revised land rates were observed leading to loss to MIDC,” CAG said at the end asking MIDC to ensure that revised land rates are implemented immediately after approval of the Board and a suitable clause regarding recovery of lease premium at revised rates may be incorporated in the offer letters.
