Mining contractors extended undue financial favours: CAG report

CHANDIGARH: The comptroller and auditor general (CAG) has pointed out during the SAD-BJP regime in 2014-17, the government failed to check illegal mining as “agreements with contractors were not entered into, returns regarding excavation of minerals were not obtained from the contractors, check posts for checking irregular mining were not set up and vital records were either not maintained or were in poor state”. The government also failed to recover dues of Rs 35.56 crore and interest of Rs 12.61 crore from mining contractors as well as brick kiln owners.
In its report tabled in the Punjab assembly on Thursday, the CAG said, “Measures for prevention of irregular mining were inadequate.” Pointing out serious irregularities, the report found replies of general managers (mining) of five checked districts not acceptable.

The report says, “They kept extending undue financial favour to the contractors despite their continued default in payment of government dues.” The CAG has audited records of Amritsar, Ferozepur, Hoshiarpur, Moga and Nawanshahr districts for the period between 2014 and 2017.

Highlighting the lackadaisical attitude of government functionaries, the report says fines of Rs 18.90 crore imposed for irregular mining were not enforced and meetings of state and district mineral foundations were not held at required intervals. The audit also found that record of four general managers (mining) showed successful bidders of 38 mines but did not furnish Environmental Performance Guarantee (EPG) amounting to Rs 78.70 lakh. According to rules, applicable to mines spread over an area of over two hectares, EPG at the minimum rate of 15,000 per hectare was to be furnished by every mine contractor to cover all costs.

The report also found that as on March 31, 2017, in these five districts, an amount of Rs 28.91 crore was recoverable from contractors on account of contract money, environment management fund, contribution towards district mineral foundation, environment clearance expenditure, short collection of tax at source and payment of land compensation. Also, no action was taken to suspend mining operations of those contractors who had defaulted in payment of land compensation though there was a provision in Punjab minor mineral rules, said the auditors.

The audit also found general managers (mining) neither levied nor recovered interest amounting to Rs 10.10 crore on delayed receipt of government dues of Rs 28.91 crore from the contractors of 80 mines in these five districts.

The auditor pointed out that analysis for accumulation of such huge recoverable amount revealed that in a large number of mining contracts, the agreements had not been entered into, which deprived the department of any legal remedies for recovering the outstanding amount. Except in Hoshiarpur, the mining department did not pursue the matter regularly with the defaulters.

With regard to the defaulting brick kiln owners, the CAG says general managers (mining) had neither levied nor recovered interest amounting to Rs 2.51 crore on delayed or non-payment of government dues of Rs 6.65 crore from 1,066 brick kiln owners on account of advance quarterly installments of dues.