Thursday, September 27, 2012

Planning Commission: Sidelined!

Planning Commission: Sidelined!

The most ardent critic of the procedures adopted in the Yacht Marina Project at Viper Island has been the Planning Commission. In the EFC meeting held on 25 Feb 2010, Gajendera Haldea, Principal Advisor vigorously opposed the project and reiterated that "the state of development of tourism in the Islands had not been a success story, with most of the activities being taken up and monitored under state control." He also raised apprehension that if the intention is to provide parking facilities for the yachts like in Phuket etc, it should not be a welcome idea.
He also insisted on an integrated plan for the Viper Island before commencing the Yacht Marina Project or the proposal would lead to sub-optimal use of the prime public property. It seems that the Planning Commission had been fed that Viper Island is one of the most suitable location for tourism in A and N Islands. It also raised objection about the bidding process being followed.
He also suggested that the hotel component should be taken out of the PPP mode and only Marina to be taken up for which Planning Commission had approved 50% subsidy i.e. Rs 7.5 crores. However, the Committee, it seems overlooked the views of Planning Commission and recommended the proposal to invite financial bids by issuing RFP for the Yacht Marina Project.
Piqued by the outcome of the meeting, an Office Memorandum was sent the very next day by Planning Commission raking up its apprehensions. It only agreed that whatever approval has been accorded are all with "in principle" approval and final approval can be given only after looking into the mandatory guidelines.
It objected that the hotel component should be delinked from the Marina Project, if the fund provided by Planning Commission has to be used.
It also raised objection that the value of the project was shown below Rs 100 crores and is being used as an argument for not applying the PPP related rules, procedures and documents. It alleged that the value of the land and waterfront is being excluded from this computation.
On 26 May 2010, once again Planning Commission shot another Office Memorandum pointing out that ANI Admn has not followed the two-stage bidding process mandated by the Ministry of Finance. It also alleged that the RFP procedure as recommended by EFC was also not used. On 15 June 2010, once again it consistently noted that overlooking the mandatory procedure could lead to sub-optimal outcome, besides inviting objections from CAG and CVC. On 17 June 2010, it kept warning that ANI Admn, which is governed by the financial/procurement rules issued by the Ministry of Finance requires to follow the procedures and any violation or departure from these rules would require competent approvals based on adequate justification. It also questioned why only in this particular instance, such significant departures are undertaken.
However, setting aside all objections, Ministry of Finance on 23 July 2010 observed that the bidding process was found acceptable and fully consistent with the requirement of objectivity and transparency.
The incessant criticism from Planning Commission and the abruptly ended objections raise many questions about the way the whole issue was tackled. The Chief Secretary had tried to convince PC that an integrated project for Viper Island is on the anvil and a consultant appointed. In fact, Mahindra Consultancy was hired for a cost of Rs 33 Lakhs. However the outcome remains a mystery.

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