CAG censures MTDC for rampant irregularities in functioning

CAG censures MTDC for rampant irregularities in functioning
PRAFULLA MARPAKWAR

MUMBAI, JULY 9: The Comptroller and Auditor General (CAG) has passed severe strictures against Maharashtra Tourism Development Corporation (MTDC) for rampant irregularities in leasing out corporation properties to private entrepreneurs, its inability to create infrastructure to attract foreign and domestic tourists and its failure to initiate disciplinary proceedings against the then managing directors for gross mismanagement.

``Canons of financial propriety were completely ignored while leasing out properties to private entrepreneurs. Utilisation of leased out properties was not monitored by the MTDC. Despite financial assistance from the state government, it failed to create the necessary infrastructure. Under such circumstances, there is an urgent need to review the continuance of the Corporation in the present form,'' the CAG observed.

Following recommendations made by the internal auditors, the MTDC appointed a one-man committee, headed veteran bureaucrat V T Chari to probe into the leasing activity and also fix responsibility on the concerned officials involved in the alleged scandal. In the leasing activity alone, the Corporation suffered a loss of Rs 2.65 crore owing to casual approach of the officials at the helm of affairs.

Though Chari was asked to probe into 31 cases, the Corporation did not provide him adequate information in 24 cases. As a result, he probed into only seven cases. Chari found that in five cases, tenders were not invited while leasing the properties of the Corporation, in two cases, valuation was not done as per the norms prescribed by the government, in three cases, possession of land was handed over to lessee without entering into the Memorandum of Understanding (MoU) and in one case, the board of directors was wrongly informed on the land in possession of the Corporation.

Besides the entire board of directors, Chari had recommended that disciplinary proceedings should be initiated against the then managing directors Dev Mehta and R M Premkumar for their dubious role in the leasing activity. Though the report of the Chari Committee was submitted to the Government in July 1999, so far, no action has been initiated either against the directors or the officials of the Corporation.

There were serious irregularities in the leasing of properties. There was no uniform policy for leasing out hotels, resorts and land. Despite such a situation, no action was taken against the board of directors and officials responsible for irregularities, the CAG pointed out.

The CAG found rampant irregularities in leasing of land to Savshanti Chain Resort Hotel at Lonavala, Krishnali Resort (owned by Congress leader Vidya Belose, who was also on the board of directors of MTDC when the proposal was approved) at Bhandarpule, MTDC hotel at Panshet and properties at Velneshwar.

In case of the hotel at Panshet near Pune, tenders were invited in June 1993 for leasing it. Though the actual value of the property was Rs 221.98 lakh, the tender document mentioned it at Rs 150 lakh. Atur India submitted its offer, which was approved by the board on laid terms and conditions. Significantly, while the tender was submitted by Atur India, an agreement was signed with Baron Hotel.

Though the MTDC submitted that Atur formed a new company to run the resort in April 1999, as per official records, the company has been in existence since 1988. Secondly, though the property was handed over in January 1994 and the lessee was operating the resort with all facilities, the lease agreement had not been entered into till August 1999. The lessee paid only Rs 15.89 lakh against Rs 31.78 lakh to be paid as advance and annual lease rent of Rs 14.30 lakh.

The CAG also expressed surprise over the failure of the MTDC to collect data of domestic as well as foreign tourists visiting the state vis-a-vis those having availed of MTDC's facilities. as a result, the necessary information to assess the growth of tourism had to be collected from the Government of India's tourist office.