The Comptroller and Auditor General of India (CAG) has criticised the Army for letting a private builder take over its land at a prime location in Mumbai by giving it a “no objection certificate" and compromising the defence security.

The CAG has pointed out large scale discrepancies in land records of the Defence Estates Officers (DEO). Its performance audit report on ‘Defence Estates Management’ which was tabled in parliament on Thursday,

The CAG pulled up the local authorities saying that even after certain fraudulent activities regarding the land had come to their notice, Central Ordnance Depot (COD) Mumbai did not get the land demarcated in its favour from the state government authorities, which facilitated usurpation of the land from the Army.

The land measuring 5166 Sq m in the possession of COD is at Kandivli Mumbai. It was in the possession of the Army since 1942. The report said that the said piece of land was allotted to a private company in 2007 and when it started development work there, the COD objected to it and placed sentries there.

The report said, “As the COD obstructed the development work, the Company lodged a complaint with the minister of state for Defence Production, whereby the Minister’s Personal Secretary wrote to the Army Chief’s Secretariat in November 2007 for appropriate action.”

The army chief then forwarded the file to the Quarter Master General’s Branch (QMG) for processing the case, who later informed the Minister's office that the "Local Military Authority had been instructed to remove all obstructions and to let the legal owner go ahead with planned development."

The CAG report observed that the land, which was in possession of the Army since decades and was actively used for patrolling purposes and of the value of Rs 5.94 crore, was give up without any serious effort.

The report said, “Army headquarters instead of investigating and defending its case allowed the company to go ahead with development work in the vicinity of military establishment, thus, compromising on defence security. COD also failed to pursue the matter with the state government to resolve the issue.”

Loss of indigenously designed/manufactured ammunition worth Rs 408.06 crore
The report also pointed out at Rs 408.06 crore worth indigenously designed and manufactured ammunition declared unserviceable without an internal investigation which had led to import of ammunition costing Rs 278.88 crore to meet the demands of the Army.

The report observed that while the army attributed the defects to insufficient quality control during manufacture, the Ordnance Factory Board (OFB) attributed these to design deficiencies.

The army did not conclude any serious investigation “to ascertain the reasons for defects in the ammunition and to fix responsibility for such failure during the last two years,” the report noted.

Unauthorised construction of hotels on Defence land
The report also highlighted the unauthorised construction and running of 36 hotels on old grant sites/leased land at Pachmarhi and two old grant sites being used as restaurants and shops in Barrackpore Cantonment, while no action was taken by the cantonment board or local military authorities to resume the land.

Unauthorised use of defence assets for Army Welfare Education Society
Despite repeated instructions by the defence ministry to stop misuse of government buildings for non-governmental purposes, the army authorities in Pune allowed unauthorised use of defence buildings by Army Public School and spent Rs 83.52 lakh for their repairs and renovation.

Further, the Military Secretary’s Branch of the Integrated HQ of the MoD (Army) irregularly posted nine Army Officers to run professional institutes of the army welfare education society (AWES), a private society.

Projection of inflated requirement of ammunition
The report observed that the Ministry of Defence, based on projection of requirements by directorate general Ordnance Services, placed indent on Ordnance Factory Board for supply of two types of ammunition. It also granted "in principle" approval for their import, despite holding surplus quantities in stock.

Audit intervention led to cancellation of indents on Ordnance Factory Board as also stopped further action on import, leading to a saving of about Rs 168.75 crore.

Construction of sub-standard bunkers
Substandard bunkers at a cost of Rs 7.61 crore were constructed due to inadequate soil investigation and lack of proper supervision by the executing engineers of the Military Engineer Services. These proved to be unfit for safe storage of ammunition. The bunkers continued to remain defective even after three years of their completion.

Avoidable extra expenditure due to non-acceptance of lowest tenders
An additional expenditure of Rs 3.01 crore, on two works was done by Border Roads Organisation (BRO).  It failed to finalise tenders within the validity period of the quotes which led to acceptance of higher rates.