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Par panel criticises delays, cost overruns in Navy projects

NEW DELHI (PTI): The price of indigenous aircraft carrier has shot up a whopping six times and will now cost Rs 19,341 crore, a parliamentary panel has said, criticising the "regular delays" and cost overruns in almost all acquisition activities of the Navy.

The Standing Committee on Defence also said it is "high time" that adequate budgetary provisions are made to the force so that deficiencies are mitigated and the country is capable of taking on two-front challenges.

The panel said that it is "perturbed" to find a spurt in accidents involving Navy vessels in the recent past.

In 2012, the Government's Defence Acquisition Committee had approved 198 ships and submarines for the Navy but the present force level is 127 ships and 15 submarines.

However, 41 ships and submarines are under construction in the country.

Noting this, the committee said while some naval projects such as P15A (stealth guided-missile destroyers), indigenous aircraft carrier (IAC), P75 and P75I (submarines) are streamlined and under progress at various shipyards in the country, it is "worried" about regular delays and cost overruns in different projects.

In case of IAC, the original sanctioned cost was about Rs 3,261 crore and it has been revised to Rs 19,341 crore, -- six times the original cost, it said.

"In case of P15A, the cost has been revised to Rs 11,662 crore from Rs 3,850 crore and dates have been revised from 2009-10 to 2015-16."

The committee felt that "there have been long delays and cost overruns in almost all acquisition activities...these time and cost overruns in almost all the projects is a major cause of concern", adding that for long the country's defence needs have been lying unattended and huge gaps have emerged in force levels.

It said that it is "high time" that adequate budgetary support is made with necessary operational reforms at shipyards and other construction sites.

The committee noted that although the Navy had projected Rs 19,570.57 crore as budgetary allocation for 2014-15, it had been allocated Rs 13,975.79 crore, which amounts to shortfall of nearly 1/3rd of the projected amount.

Similarly, it also noted that revenue budget shortfall mainly affects "other than salary" heads when the projection of the Navy was to the tune of Rs 11,662 crore while allocation made was Rs 6,921.30 crore, only 59 per cent of the money solicited.

"This is sixth successive year of lesser allocation under "other than salary" segment...During evidence, the Navy submitted that there is a need for additional funds under revenue head to meet coastal security," the report said.

During the course of deliberations, it came to the notice of the committee that the share of naval budget to the total defence budget had fallen down to 15.72 per cent in 2014-15 from 16.79 per cent in 2013-14 and 18.12 per cent in 2012-13, the report added.

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