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Compliance
Defence

Report No. 37 of 2015 - Compliance Audit on Navy and Coast Guard, Union Government, Defence Services

Date on which Report Tabled:
Tue 08 Dec, 2015
Date of sending the report to Government
Government Type
Union
Union Department
Defence
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Sector -

Overview

The total expenditure of the Defence Services during the year 2013-14 was Rs. 2,09,789 crore. Of this, the Navy spent Rs.33,831 crore, which constituted approximately 16.13 per cent of the total Defence Expenditure. The major portion of the expenditure of the Navy is capital in nature, constituting almost 60.18 per cent of the total expenditure.

This report contains major findings arising from the test audit of transactions of the Navy, the Coast Guard, the Military Engineer Services and four Defence Public Sector Shipyards viz., Mazagon Dock Limited, Mumbai, Garden Reach Shipbuilders & Engineers Limited, Kolkata, Goa Shipyard Limited, Goa, and Hindustan Shipyard Limited, Visakhapatnam. Some of the major findings included in the Report are discussed below.

Medium Refit cum Upgradation of INS Sindhukirti

The Medium Refit (MR) of an EKM submarine was due for commencement in 2001, but was carried out from January 2006, by which time the material state of the submarine witnessed extensive deterioration. The MR was scheduled to be completed by January 2009, however, due to deficiency in manpower deployment by the yard, lack of protection to main line cables, delayed supply of yard materials and modernization of equipment, the submarine was delivered by the shipyard to the Navy in June 2015, with its Sea Acceptance Trials to follow. As a result, the Navy is unable to operate one of their lethal platforms since June 2004. (Paragraph 2.1)

Avoidable expenditure of Rs. 20.80 crore on Medium Refit cum Cadet training ship conversion of INS Sujata due to improper evaluation of bids Navy accepted (February 2009) the unsolicited bids of M/s WISL, Mumbai (i.e. a shipyard) for conversion of Indian Naval Ship (INS) Sujata as Cadet Training Ship, on the assumption that it was a merged entity of M/s ABG, Gujarat (another shipyard) to whom Request for Proposal (RFP) was issued (November 2008). Further, rejection (October 2009) of the bid of M/s WISL in spite of provisions for consideration of unsolicited bids in the Defence Procurement Manual and consequent re-issue (January 2010) of RFP led to a delay of 18 months in conclusion of contract and avoidable expenditure of Rs.20.80 crore. (Paragraph 3.1)

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