Is everything alright with Bharatmala Pariyojana?

There have been press reports recently about the transfer of the principal officer (along with other officers) of the Comptroller & Auditor General (CAG) dealing with the performance audit of the implementation of Phase-1 of Bharatmala Pariyojana (BPP-1). The suggestion being that the transfer (from Delhi to Thiruvananthapuram) was linked to the observations in the Performance Audit Report (PAR) highlighting irregularities. One would have dismissed this as mere speculation. However, the office of the CAG itself reacted to the reports stating that the transfers were “a matter of administrative convenience” and that the audit reports are prepared by an “extensive team over a prolonged period” and cannot “be attributed to any one officer”. 

The mission of the CAG is mandated by the Constitution of India to ‘promote accountability, transparency and good governance through high-quality auditing and accounting and provide independent and timely assurance to the Legislature, the Public and the Executive, that public funds are being collected and used effectively and efficiently.’ Articles 148 to 151 of the Constitution deal with the duties and powers of the CAG. These have been further elaborated in the CAG (Duties, Powers and Conditions of Service) Act, 1971. 

Incidentally, the issue of whether a performance audit (as opposed to compliance audit) by the CAG was violative of the Constitution was examined by the Supreme Court. The apex court has held that performance audit had to be viewed in the context of the CAG having to carry out “examinations into economy, efficiency and effectiveness with which the government has used its resources.” 

It is in this background that the CAG PAR No 19 of 2022 on implementation of BPP-1, tabled in parliament in August 2023, has to be examined.
The PAR is incisive. It highlights instances of irregularities -- in the award of projects, in following prescribed processes, in appraisal and approval mechanisms, in the scope of projects and cost estimates, resulting in cost overruns and delays in completion of projects.

The Bharatmala Pariyojana is conceived as an ecosystem of 74,942 km of road development consisting of seven components -- economic corridors, inter-corridors and feeder roads, national corridors, border and international connectivity roads , coastal and port connectivity roads, greenfield expressways and residual National Highway Development Programme (NHDP) projects. The first phase of the programme was to develop 34,800 km, including a length of 10,000 km which was the residual of the NHDP. The investment outlay approved by the Cabinet Committee on Economic Affairs (CCEA) was Rs 5,35,000 crore. 

The PAR notes that as of March 2023, 76% of the CCEA-approved project had been awarded, while a massive 158% of the CCEA approved funds have been sanctioned. Significant changes were made; the result -- per km cost of the project has increased dramatically from Rs 14 crore to Rs 24 crore. Additionally, funds worth Rs 1.57 lakh crore that were approved for other schemes were being utilised to report achievements under Bharatmala.  

The PAR observes that the National Highway Authority of India (NHAI) had borrowed far in excess of what had been approved. For the period up to 2021-22, Rs 3,00,349 crore had been borrowed, as against the amount of Rs 2,09,279 crore approved by the CCEA for funding BPP-1 as a whole. The excess borrowing of Rs 91,070 crore was being utilised for meeting the higher fund requirements due to time and cost overruns in development of BPP-1 projects. 

Under BPP-1, various financing models for implementing infrastructure projects were adopted. The CAG observed that of the 23,268 km of national highways (NH) to be built, only 1.8% was constructed under the Build-Operate-Transfer (BOT-Toll) mode, against the approved 10%. Construction  under the Engineering, Procurement and Construction (EPC) model seemed to have been given a higher preference than approved. Further, as many as 35 Multi-Modal Logistics Parks (MMLP) were to be completed under BPP-1. The CAG report observes that not one MMLP had been  completed till March 2023.

The PAR notes the absence of a systematic prioritisation method and the lack of clear completion timelines. As of March 2023, 46% of the length of 11 high-priority BPP-1 corridors were not awarded. Worse, several instances were observed of implementing agencies selecting ineligible bidders who did not fulfil tender conditions or had falsified documents. It also noted that tender notices were floated without prepared detailed project reports, or accurate reports. The CAG recommended investigating anomalies in tendering and fixing the responsibility of erring officials. It also recommended that bids be evaluated online, via an e-tendering portal, to ensure transparency.

The PAR points out that one of the objectives of BPP-1 was to improve the logistics performance index (LPI) (India is ranked a creditable 38 out of 139 countries in the 2023 LPI index, having improved six places, much as citizens of Bengaluru would shake their heads in disbelief!). However the Ministry of Road Transport and Highways (MoRTH) failed to set any target/milestone to monitor and improve the LPI. The PAR also points out to languishing projects being taken up without resolving existing impediments/bottlenecks. This can be self-defeating.

Undoubtedly, one of the achievements of the present government has been the dramatic improvement in national highways and road connectivity. But the MoRTH would do well to examine the CAG report in the spirit in which the audit is conducted – to ensure that government resources are indeed being used economically and effectively. It could make BPP-1 truly a ‘Bharat Mala’ -- a garland – around the nation to provide the shortest, hassle-free, optimum connectivity to multiple places.

(The writer is a former Chairman, Central Board of Indirect Taxes & Customs)