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"Ineligible" funding of Sardar Statue in Gujarat: CAG tells Central PSUs, it's not a heritage CSR activity
The Comptroller and Auditor General (CAG) of India, in its recent report on Central Public Sector Enterprises (CPSE), has qualified public sector undertakings’ (PSUs') funding the 182-metre world’s highest Sardar Statue, currently being constructed in the Narmada river downstream of the Sardar Sarovar dam as an “ineligible” corporate social responsibility (CSR) activity.
Taking strong exception to CPSEs funding the project, CAG said, “The contribution towards construction of Statue did not qualify as CSR activity as per schedule VII of the Companies Act, 2013”. The CPSEs funded the project under item (v) of schedule VII Act, which talks of protecting “national heritage, art and culture, including restoration of buildings and sites of historical importance and works of art; setting u public libraries and development of traditional arts and handicrafts.”
Giving details, the CAG report notes, “Government of Gujarat implemented a project named ‘Statue of unity’ through a Government of Gujarat organisation named ‘Sardar Vallabhbhai Patel Rashtriya Ekta Trust (SVPRET)’ for commemorating the contribution of Sardar Vallabhbhai Patel.”
Pointing out that “the contract for the work was awarded to Larsen & Toubro (L&T) Ltd in October 2014 at a total project cost of Rs 2,989 crore with targeted completion by October 2018”, CAG states, “As per the detailed proposal, the project comprised of construction of i) 182 meter high bronze plated statue of Sardar Patel which would be the world’s tallest statue, ii) Memorial and Visitor’s Centre, Gardens and iii) Convention Centre named ‘Shresth Bharat Bhawan’.”
The report says, “The trust approached five of the CPSEs viz. Oil & Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Limited (IOC), and Oil India Limited (OIL) to participate in the project and contribute substantial funds, as there was a shortfall of funds for the year 2016-17 to the extent of Rs 780 crore.”
“Thereafter”, says the report, “All the five CPSEs contributed a total of Rs 146.83 crore (ONGC Rs 50 crore, IOCL Rs 21.83 crore, BPCL, HPCL and OIL Rs 25 crore each) towards this project under CSR.”
Taking objection to the contribution, the report states, “The activity was shown under item (v) of Schedule VII i.e protection of national heritage, art and culture. Contribution towards this project did not qualify as CSR activity as per schedule VII of the Companies Act 2013 as it was not a heritage asset.”
It further says, the management of ONGC, in its reply “stated that the project included activities such as promotion of education, development of banks of River Narmada up to Bharuch etc.”
Similarly, “The management of BPCL, HPCL & IOCL stated in their reply that as per Circular No. 21/2014 issued by MCA they interpreted the activity liberally to capture the essence of the subjects enumerated in the Schedule VII of Companies Act 2013”, it adds.
The report further observes that an amount of Rs 50 crore was “given to Sardar Vallabhbhai Patel Rashtriya Ekta Trust (SVPRET) as contribution towards corpus of the Trust”, which would be incur the expenditure for the trust’s activities. CAG underlines, “The fact remained that the contribution towards construction of Statue did not qualify as CSR activity as per schedule VII of the Companies Act, 2013.”
“Finding that there was a shortfall funds, the then chief minister Narendra Modi first undertook a campaign to collect iron from across the country. But funding that this was a miserable failure, L&T gave the sub-contract for iron to the Chinese company TQ”, the statement said.
When Modi found that the funds were still short by Rs 780 crore, he “forced the CSPEs to give over Rs 780 crore for the project”, Patkar said, wondering whether the money would be returned to the CPSEs, and if this amount would be spent on public good.
She said, the irony is that, while such huge amount is being spent on the Sardar statue for promoting tourism, “why nothing is being spent on education and development of the villages on the banks of the Narmada river”, adding, “While six villages were totally uprooted for building the dam, now 70 villages in the neighbourhood face the danger on account of developing tourism in the region.”
The report says, “The trust approached five of the CPSEs viz. Oil & Natural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Limited (IOC), and Oil India Limited (OIL) to participate in the project and contribute substantial funds, as there was a shortfall of funds for the year 2016-17 to the extent of Rs 780 crore.”
“Thereafter”, says the report, “All the five CPSEs contributed a total of Rs 146.83 crore (ONGC Rs 50 crore, IOCL Rs 21.83 crore, BPCL, HPCL and OIL Rs 25 crore each) towards this project under CSR.”
Taking objection to the contribution, the report states, “The activity was shown under item (v) of Schedule VII i.e protection of national heritage, art and culture. Contribution towards this project did not qualify as CSR activity as per schedule VII of the Companies Act 2013 as it was not a heritage asset.”
It further says, the management of ONGC, in its reply “stated that the project included activities such as promotion of education, development of banks of River Narmada up to Bharuch etc.”
Similarly, “The management of BPCL, HPCL & IOCL stated in their reply that as per Circular No. 21/2014 issued by MCA they interpreted the activity liberally to capture the essence of the subjects enumerated in the Schedule VII of Companies Act 2013”, it adds.
The report further observes that an amount of Rs 50 crore was “given to Sardar Vallabhbhai Patel Rashtriya Ekta Trust (SVPRET) as contribution towards corpus of the Trust”, which would be incur the expenditure for the trust’s activities. CAG underlines, “The fact remained that the contribution towards construction of Statue did not qualify as CSR activity as per schedule VII of the Companies Act, 2013.”
Medha Patkar protests
Taking note of the CAG report, top social activist Medha Patkar of the anti-dam Narmada Bachao Andolan (NBA), in a statement has said that L&T was given the contract to build the Sardar statue at the original cost of Rs 2,063 crore.“Finding that there was a shortfall funds, the then chief minister Narendra Modi first undertook a campaign to collect iron from across the country. But funding that this was a miserable failure, L&T gave the sub-contract for iron to the Chinese company TQ”, the statement said.
When Modi found that the funds were still short by Rs 780 crore, he “forced the CSPEs to give over Rs 780 crore for the project”, Patkar said, wondering whether the money would be returned to the CPSEs, and if this amount would be spent on public good.
She said, the irony is that, while such huge amount is being spent on the Sardar statue for promoting tourism, “why nothing is being spent on education and development of the villages on the banks of the Narmada river”, adding, “While six villages were totally uprooted for building the dam, now 70 villages in the neighbourhood face the danger on account of developing tourism in the region.”
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