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Chennai: In the first major audit of the Union govt’s Smart City Mission projects worth ₹10,000 crore, the Comptroller and Auditor-General (CAG) has flagged widespread violations, including diversion of funds, execution of unapproved projects, deviations from approved plans and works outside designated Smart City areas, in Tamil Nadu . The performance audit of seven of Tamil Nadu’s 11 Smart Cities, including Chennai, for 2015-23 found that 52 projects worth Rs 1,602.20 crore included in the original Smart City Proposals (SCPs) were not implemented despite Ministry of Housing and Urban Affairs (MoHUA) guidelines allowing deletion only in exigent circumstances with clear justification. At the same time, 44 unplanned projects worth Rs 623.86 crore were taken up. Of these, 21 projects worth Rs 184.71 crore were executed entirely outside the approved Area Based Development (ABD) areas. Five projects costing Rs 21.42 crore were routine works that should have been funded by the respective corporations. Tirunelveli had the highest value of unplanned works, with 15 projects worth Rs 314.62 crore, accounting for 25.84% of its sampled projects.
Unplanned works included a green building at the Greater Chennai Corporation campus, floodlighting at Nehru Stadium in Coimbatore, a guest house in Tirunelveli and a convention centre in Madurai.
The audit found Rs 23.83 crore diverted by six cities for impermissible expenditure, including cars, computers, legal charges and other activities. In Chennai, Rs 66.58 lakh was spent on state government advertisements, Rs 18.44 lakh on consultants for non-Smart City projects and Rs 15.33 crore on shifting/resettlement of families. Tiruppur spent funds on renovating a ULB conference hall and buying a 110-inch LED TV, computers, printers and furniture. Erode used Rs 2.59 crore under administrative and office expenses to pay underground sewerage section staff salaries, while Salem transferred Rs 2.95 crore from the same head. Madurai used Rs 48.36 lakh to pay contractors for other civic projects. Although the Centre released its entire share of more than Rs 5,000 crore, Tamil Nadu diverted at least Rs 1,127 crore into personal deposit (PD) accounts of state departments on eight occasions between July and Oct 2021 in violation to Smart City rules which mandates that the money must be in a nodal agency account. There were delays of up to 714 days in transferring funds from the state to TUFIDCO and up to 960 days from TUFIDCO to Smart City entities. Five cities earned Rs 239.40 crore as interest through this, but only Rs 149.01 crore was released back into the mission. TUFIDCO retained Rs 11 crore without specific authorisation and another Rs 2 crore money under the header Dindugal when it wasn’t part of smart city. Coimbatore transferred Rs 150.73 crore towards its ongoing 24×7 water supply project, while Erode, Tirunelveli and Tiruppur transferred funds to the Tamil Nadu Water Supply and Drainage Board or corporations for similar works. The CAG found 93 projects were started without mandatory clearances from agencies including the Pollution Control Board, Directorate of Town and Country Planning and Public Works Department. Against 37 pan-city projects worth Rs 1,488.59 crore originally proposed, 69 projects costing Rs 780.77 crore were taken up. Only 22, worth Rs 209.24 crore, met the mission’s actual criteria. Though each was to have Rs 200 crore capital, all sampled SPVs were established with just Rs 10 lakh, which the audit said was done to avoid statutory provisions under the Companies Act, 2013.
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Corporations also floated limited tenders on behalf of SPVs, violating tender norms and defeating purpose of prudent budgeting, it said. The CAG termed these violations of Union directions and mission guidelines. Smart City funds were also used for other projects. City Level Advisory Forums were convened only after a two-year delay and stakeholder meetings were not held periodically. The CAG also flagged the functioning of Smart City Special Purpose Vehicles (SPVs). Except Chennai, none had a full-time CEO; municipal commissioners effectively ran the SPVs, creating a potential conflict of interest. Download the TOI App.