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3.1 The Chief Technical Examiners’ Organisation (CTEO) was initially created in 1957 as a distinct wing of the erstwhile Ministry of Works, Housing and Supply for the purpose of conducting a concurrent technical audit of works of the Central Public Works Department and securing economy in expenditure as also better technical and financial control. In 1963, the Committee on Prevention of Corruption (Santhanam Committee) recommended the transfer of this Organisation to the Central Vigilance Commission so that its services could easily be made available to the Central Bureau of Investigation or in inquiries made under the direction of the Central Vigilance Commission. The recommendation was accepted by the Government of India and the Organisation now functions as a technical wing of the Central Vigilance Commission under its administrative control.

3.2 The jurisdiction of the Organisation is coextensive with that of the Commission. Its jurisdiction now extends to examination of civil and other works pertaining to all Ministries/Departments of the Government of India including those relating to works executed by Central public sector undertakings, Banks and corporate bodies etc. falling within the jurisdiction of the Commission.


3.2.1  In order to enable the Organisation to select and examine works from the point of view of vigilance, each organisation within the advisory jurisdiction of the Commission is required to furnish returns on quarterly basis in the prescribed format indicating the details of all major works being executed by it. However, for practical considerations, this information is required to be given only in respect of civil works the estimated cost of which exceeds Rs.70 lakhs; electrical works the estimated cost of which exceeds Rs.10 lakhs; and horticulture works costing more than Rs.1 lakh. These returns enable the Organisation to prepare an action plan for conducting inspections of works. The Chief Vigilance Officers (CVOs) are, however, free to recommend, while submitting the returns, examination of a particular work if they suspect any serious irregularity being committed by certain public servants in the execution of such works to the CTEO.






3.3 Over the years, the Organisation has proved to be an important and effective wing of the Commission’s set-up in detectingmalpractices in the award and execution of works and in suggesting remedial measures to prevent recurrence of such instances. The intensive inspection of the works carried out by the Organisation helps in detecting cases of execution of substandard works or acceptance of substandard materials; infructuous, avoidable and/or ostentatious expenditure; and undue favours and over-payments extended to the contractors.

3.3.1 Many organisations do not have the expertise for investigating cases of corruption and malpractices in construction work. In order to bridge this gap, the Commission had decided in 1991 to assign the task of conducting investigations in select cases to the CTEO.




3.4 The major achievements of the CTEO during the year 1997 are briefly indicated below:

(a) Creation of an awareness for quality control & adherence to the rules, procedures and economy;

(b) The recovery of over-payments made to the contractors. The Organisation meticulously follows up cases of over payments to contractors either due to collusion with contractors or due to slack supervision. During the year 1997, the over-payments accepted by the concerned organisations as a result of inspections carried out by this organisation amounted to about Rs.452 lakhs.

(c) Improvements in specifications, construction practices and contract conditions etc.; and

(d)Assistance to various organisations in preparation of Codes, Manuals and issue of guidelines and circulars to serve as effective tools for preventive vigilance.







3.5 During the year under report, the number of intensive examinations and investigations carried out by the organisation are as given in the table below:


Details of organisations


Number of




Government Departments





Banks, Insurance Companies and Financial Institutions





Public sector undertakings, autonomous bodies etc.






3.5.1 As a result of these inspections, several major deficiencies in the execution of works were noticed. Some of these are briefly indicated below:

(i) During inspection of Horticulture works of South Eastern Coalfields Ltd. Bilaspur, it was observed that a contract work of Rs.523 lakhs was awarded to Madhya Pradesh Van Nigam. The


Madhya Pradesh Van Nigam had been awarded work at exorbitant high rates costing around Rs.217 lakhs extra.

(ii) During inspection of Horticulture Works of Mahanadi Coalfields Ltd., Talcher, work had been awarded at exorbitantly high rates causing excess expenditure of about Rs.22.3 lakhs.

(iii) The work of construction of 6.2 m wide foot over-bridge and booking office at elevated platform of Hazrat-Nizamuddin Railway Station was inspected and it was observed that undue benefit to the tune of Rs.22.16 lakhs was derived by the contractor due to wrong and deficient stipulations/provisions in items related to RCC footings and supply and fabrication of steel work of the bridge.

(iv) In case of construction of staff quarters at IGNOU, New Delhi, excess expenditure of Rs.5.83 lakhs has been incurred by CPWD. The work has been awarded at a higher cost by interpreting the rebate quoted by the contractor in the manner beneficial to the contractor. The work has also been delayed and extension of time has been granted without proper justification causing extra cost due to escalation.

(v) In case of construction of residential complex at Bandra Kurla, Bombay, the Hindustan Petroleum Corporation Ltd. (HPCL) has incurred an extra expenditure of Rs.62.55 lakhs by rejecting the tender received at lower rates in the first call. Similarly, an extra expenditure has been incurred to the extent of Rs.16.86 lakhs in case of Housing Complex at Jaipur.

(vi) Western Coalfields Ltd. have awarded a work of construction of staff quarters at Ballarpur Area after 21 months of receipt of tenders. Even in this delayed period, market rate justification was not prepared and many discrepancies in the agreement remained.

(vii) Mazagon Dock Ltd., while executing the work of residential quarters at Mazagon Dock Complex, Mumbai, substituted external finishing treatment with ROUGH-N-TUFF item incurring an extra expenditure of Rs.31.68 lakhs. The recovery for defective work also amounted to Rs.12 lakhs.

(viii) The Cotton Corporation of India Ltd. awarded the work of Construction of multi-storeyed office Building at CBD Belapur, Navi Mumbai at high rates incurring an extra expenditure of Rs.166 lakhs. Additional work to the extent of Rs.100 lakhs had further been awarded at the higher rates already accepted.

(ix) Konkan Railway Corporation, while executing new broad gauge line work at Roha-Mangalore section, incurred an extra expenditure of Rs.110 lakhs by way of wrong classification of rock and earth filling from outside whereas surplus earth was available with the Konkan Railway.

(x) IFFCO, while executing the work of Naptha Storage Tank at Phulpur, incurred an extra expenditure of Rs.23.85 lakhs by allowing deviations of items advantageous to the contractor.

(xi) Bharat Petroleum Corporation Ltd., while executing the work of Administrative Building, Anna Nagar, Madras, incurred an excess expenditure of Rs.100 lakhs by accepting high rates and executing sub-standard work using less cement and thus reducing the structural strength.

(xii) National Thermal Power Corporation Ltd. (NTPC), while executing the work of Gas based Combined Cycle Power Project at Kawas (Gujarat), incurred an extra expenditure of Rs.600 lakhs by amending contract conditions favourable to the contractor.

(xiii) NTPC, while executing supply and erection of Ash Extracting, Conveyance and Storage Plant package for NCPP Stage-I, Dadri, made amendments in the contract without appropriate direction for cost adjustments. The amount involved in such amendments was about Rs.200 lakhs.

(xiv) In case of Mangalore-Udupi New Broad Gauge Section constructed by Konkan Railway Corporation, extra liability of Rs.25.15 lakhs has been taken by way of paying sales-tax and escalation which were not to be borne by Konkan Railway Corporation.

(xv) The Southern Railway while executing the gauge conversion works from Chennai Beach to Tiruchirapalli-Changalpattu-Villupuram Section incurred loss of Rs.150 lakhs. The contractor was awarded 9 works and mobilisation advance was paid without proper justification. The contractor did not complete the work and advance could not be recovered.

(xvi) India Tourism Development Corporation has incurred an extra expenditure of about Rs.80000 by installing transformer of higher capacity at IITTM, Gwalior. 

(xvii) Hindustan Petroleum Corporation Ltd. while executing the work of ventilation system for OMCC, Boiler House, Cracked LPG & Catpoly substations at Refinery at HPCL at Mumbai paid consultancy fee much more than the cost of the work. The consultancy fee payable was more than Rs.11 lakhs against a work of Rs.11.15 lakhs.

(xviii) Life Insurance Corporation of India while executing the work of providing electric service connections of STC Building at Lucknow incurred an extra expenditure of Rs.50000 by installing a higher capacity transformer. In addition, the transformer installed was of cheaper make than the stipulated make.






3.6 The illustrative nature of prima facie lapses/irregularities detected in the execution of works as a result of these inspections is indicated in the statement at ANNEXURE-II. Serious instances of lapses and irregularities noticed in the course of inspections or during the subsequent processing of the inspection reports are referred to the CVOs or the CBI, depending upon the nature and seriousness of the lapse(s) for detailed investigation from vigilance angle. During the year under report, 89 such cases were referred to the CVOs for investigation. An illustrative list of these cases is given in the statement at ANNEXURE-III. Investigation reports received from the CVOs are examined by the Commission in order to tender appropriate advice. A few illustrative examples of the Commission’s first stage advice in such cases are given in the statement at ANNEXURE-IV.




3.7 The major deficiencies noticed in taking proper follow up action on the observations made by the CTEO and related areas are briefly indicated below:






3.7.1 The intensive examination reports forwarded by the CTEO are required to be examined and responded within a period of 60 days. In the past, there had been abnormal delay on the part of many organisations in this respect. However, with vigorous persuasion there has been improvement during the year. The number of reports more than a year to which reply has not been received dropped from 26 to 6 during the year. A statement of reports issued prior to 31.12.1996 to which no reply has been received till 31.12.1997 is given at ANNEXURE-V. The observations made in these reports are given below :-

(a) The work regarding construction of disposable structures of Metro Railway, Calcutta costing around Rs.377 lakhs was inspected in September, 1996. The work was awarded without proper publicity, assessment of market rates and using richer specifications causing an

extra expenditure of Rs.1.72 lakhs. Further, it was found that recovery for use of electricity and water has not been made and certain other payments not admissible were made. Prescribed testing of materials and concrete was also not carried out.

(b) The work regarding provision of token-less block instruments under Northern Railway Moradabad, costing around Rs.17 lakhs, was inspected in February, 1996. During inspection, it was found that agreement was not properly sealed and measurements were not properly recorded. It was also found that angle iron and MS flats were of smaller size than required and they were not properly bunched. Apart from that, iron parts were not properly painted with anti-corrosive primer.

(c) The work regarding provision of second distant signal on Subzimandi Ambala Section (Northern Railway) costing around Rs.241 lakhs was inspected in January, 1996. During inspection, it was found that drainage section was smaller than specified having a financial implication of about Rs.3 lakhs. The tender of L-1 was not accepted causing extra cost of Rs.43 lakhs. The measurements were not properly recorded. In addition, it was found that site records were not maintained properly.

(d) The work regarding approach road connecting Bijwasan installation and BPCL Service Station at NITC, New Delhi was inspected in May, 1990 and serious irregularities were noticed. The important paras were referred to CVO, Airports Authority of India on 18.7.1990 and no reply whatsoever has been received. The investigations were based on a complaint against the Executive Engineer indicating favour to his friend by not following codal procedure and awarding the work at higher rates.

(e) The work regarding development of camping site and Borari Road executed by DDA was inspected in October, 1992 and report was released in two parts. The facts regarding procedural lapses, award of contract at higher rates and other lapses on the part of Chief Engineer/ Superintending Engineer/Executive Engineer had been brought out. No reply has been received so far.

(f) The work regarding construction of boundary wall along N.G. Drain executed by Flood Control Department of Delhi Administration costing around Rs.7 lakhs was inspected in November, 1993. No reply has been received in spite of repeated reminders. During inspection, it was found that materials used have not been tested from time to time. The wall was found cracked probably due to inadequate design.






3.7.2 Delays were seen to have occurred in the case of finalisation of paras referred to the Chief Vigilance Officers for vigilance investigation. As on 31.12.97, there were 447 cases pending for investigation out of which 290 cases were pending for more than five years. A list of the organisations with more than ten such pending cases is given in ANNEXURE-VI.



3.7.3 The Quarterly Progress Reports in regard to civil and other works, prescribed by the Commission, serve as a important input for exercising general check and supervision over the vigilance and anti-corruption work in different organisations. However, these reports are not received regularly from many organisations and some do not send these reports at all. Some of the major organisations which did not send any report during 1997 are listed in ANNEXURE-VII.



3.7.4 Cases have come to the notice of the CTEO where certain organisations took major construction works without availability of requisite technical establishment. They have depended wholly on private architects/consultants and the contractor engaged for the work exploited the circumstances and provided sub-standard works. The works were not properly checked before making payments resulting in substantial over-payments. In addition, huge claims were made by the contractors which could not be defended properly before arbitrators/courts due to absence of requisite technical support, resulting in corresponding loss to the organisations. It has, therefore, been advised that where requisite engineering infrastructure is not available, major works should be entrusted to Central Government organisations/public sector undertakings authorised to carry out such work.



3.7.4 Many organisations continue to prepare estimates and inviting tenders which are not based on proper Schedule of Rates or Analysis of Rates based on correct market rates. Tenders are accepted without verifying the justified cost as per current market rates. Many times it is stated that tendered amount is within detailed estimate, which itself is not authentic.




3.7.6 The tender document may provide for proper specifications, but these are not followed during execution. For the important work of reinforced cement concrete, controlled concrete with weigh batching and regular testing is specified but volumetric mix is provided at site. Even testing is not carried out properly. For example, three cubes are taken instead of six and testing is not carried out at specified age.





3.8 Based on the Quarterly Progress Reports (QPR) received from about 450 organisations, the CTEO is able to inspect works of about 50 organisations during a year. Thus the Organisation covers a very small area of operation. The CTEO mainly inspects the works with vigilance angle and cannot be a substitute for respective organisations’ internal arrangement for quality control and checking from vigilance angle. In a few cases, the CTEO takes up investigations of cases referred by the Commission or some of the organisations themselves. Sometimes, investigations are carried out on the basis of complaints received by the Commission or by the CTEO itself. The complaints received, which are considered of normal occurrence, are referred to CVOs for investigation at their level and final action to be taken.

3.8.1 The CVOs are required to furnish replies and clarifications to the observations made in the intensive-examination reports on the basis of inspections of the works carried out by the CTEO. To meet with the full requirements, it would be necessary that the CVOs exercise independent check on the works executed by their organisations on the same lines on which the CTEO carries out the inspections and brings out the deficiencies. The CVOs are also required to take necessary corrective actions to ensure that lapses and irregularities pointed out in the CTEO’s reports do not recur in future. In this manner, the CVOs can derive the maximum benefit from the inspections of CTEO.

3.8.2 The CTEO is being broad-based by drawing officers from different disciplines like Power, Telecommunications and Border Roads organisation etc. This would help in widening the coverage from civil, electrical and horticulture type of works to stores (purchase and inventory control), information technology, telecommunication equipment etc. This would also serve the diversification of the role and the responsibility of the Government departments in an expanding economy.



3.9.1 The CTEO has been circulating instances of common irregularities in the execution of works as observed during technical examination of works of different departments/public sector undertakings. Three such circulars have been issued in this year making a total number of thirteen so far.


3.9.2 The Chief Technical Examiners and Technical Examiners are participating in preventive vigilance courses being organised by various PSUs, CBI and other Government Departments. During 1997, the officers of CTEO delivered lectures in more than 20 courses.