Orissa signed MoUs ‘indiscriminately’ with power cos: CAG

The Comptroller & Auditor General India has come down heavily on Naveen Patnaik government for signing MoUs "indiscriminately" with steel, aluminum and power companies without any policy or guidelines and its failure to go for competitive bidding while choosing investors.

The CAG, which is doing a performance audit of all MoUs signed by the state government between 2001 and 2012, has found that Orissa had no policy/guidelines in place while signing MoUs.

The report said of the 93 MoUs were signed by the Orissa government with private companies during 2001-12 for setting up industries, not a single promoter came through competitive bidding route. As of March 2012, 35,793.49 acres of land was allotted to 54 companies, which included 25,012.35 acres of private land. Of the 54 MoUs, 34 alone are steel-related industries. As of March 2012, 17,625.8 acres of land was allotted in favour of 34 steel companies who had signed MoUs.

"Neither any competitive bidding was made for selection of parties for setting up of any particular type of industries/infrastructure projects, nor any Request for Proposal was issued. We further noticed that states like West Bengal, Gujarat and Karnataka are inviting RFP for setting up of industries in the state. Due to such suo motu offers by the promoters, interests of the state could not be safeguarded as the state was deprived of best investment proposals of different promoters. Besides Article 14 of Constitution on Doctrine of Equality was violated by entering MoUs based on suo motu offers instead of competitive bidding process.

The CAG further said the steel and mines department had neither invited bids nor made public its decision to promote steel and mines industries in the e-procurement portal of the government for wide publicity.

The draft report said the state committed land, water, mineral without assessing the availability and feasibility.

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