Delhi govt paid higher rates to procure low-floor buses: CAG

Delhi government today came under attack from the Comptroller and Auditor General (CAG) for paying Tata Motors a higher rate for procuring low-floor buses which may not be suitable for some of the city roads.

During 2004-09, the DTC purchased 3,156 AC and non AC low floor buses to cover a large area comprising rural and suburban regions, the CAG said that making a homogeneous bus fleet would not only increase the cost of operations.

In its report for the year ending March 2009, the CAG pointed out about the procurement order for 1,500 non-AC and 1,000 AC low floor buses in September 2008 and said the vehicles were purchased at "rates over and above the justified rate" prescribed by a technical committee of the corporation.

It said the offer of Tata Motors was lowest with the bid price of Rs55.20 lakh for a non-AC bus and Rs64.19 lakh for an AC bus. But the technical committee of the DTC had, however, worked out a justified price of Rs42.92 lakh for non-AC bus and Rs50.56 lakh for AC bus.

After negotiations the government directed the corporation to procure the non-AC bus and AC buses at Rs51.89 lakh and Rs61.62 lakh respectively.

The CAG said the state exchequer would be further burdened by an additional outflow of Rs833 crore on account of higher annual maintenance charges over a period of 12 years.

The report also rapped the government for extending undue benefit to the supplier, saying norms for releasing money to them were flouted.

It said the as per contract norms for purchase of 650 such vehicles in 2007-08, 20% of the cost was to be withheld for 45 days of delivery of the vehicles and it should have been released after rectification of all the defects and deficiencies by the contractor.

"Audit observed that he corporation released 15% payment amounting to Rs40.16 crore out of the balance withheld by the corporation for rectification of the defects in contravention of the agreement," the report said.

It also questioned installation of unnecessary equipment in the buses like retarder and anti skid lock braking system which cost the exchequer Rs168.94 crore.

"Making a homogeneous bus fleet would not only increase the cost of operations but it might also be unsuitable to ply the buses on uneven and harsher terrains because of the low floors," it said.

It said the DTC suffered a loss of Rs1,708.55 crore in 2008-09 and its accumulated losses and borrowings stood at Rs7,883 crore and Rs7,566 crore as on March 31, 2009 respectively. The DTC earned Rs25.90 crore per km during the period while its expenditure per km was Rs119.27 per km.

About the bus fares, the report said the fare structure of the corporation, decided by the city government, has no scientific basis and "thus there is a risk of commuters paying for inefficiency of the corporation." On the vehicular productivity, the report said the average distance covered by each bus per day has decreased from 193km in 2004-05 to  132km in 2008-09.

"As against the all India average fleet utilisation of 92%, the fleet utilisation of the DTC which achieved 90.5% in 2005-06 decreased to 77.03% in 2008-09," it said.

"It was observed that during the year 2008-09, the average fleet utilisation in the evening shift was less by 33% as compared to the morning shift."

The report also slammed the corporation for plying some buses without fitness certificate, making them hazard to public safety.

"A test check of the records in 17 depots of the corporation during the year 2008-09 revealed that 1,189 buses out of 1,798 buses had been issued MVI certificates with the condition that 'not valid to ply on local routes. It was however, observed that the corporation was plying these buses on local routes," it said.

Talking about the routes, the report said as on as on March 31, there were 842 routes in the city of which the corporation operates only in 607 routes. "Audit report revealed that none of the routes operated by the corporation were profitable and many city routes were not even recovering their variable cost.