Chennai, Sep 7 (PTI) The SPVs set up under the SCM in Tamil Nadu have been reduced to mere funding conduits, with public funds routinely diverted to routine municipal works outside designated development zones, according to a CAG report tabled in the Assembly on Tuesday.
The performance audit on the implementation of the Smart Cities Mission (SCM) in Tamil Nadu revealed that several multi-crore commercial ventures, including multi-level car parking facilities and modernised markets, are lying idle or abandoned, failing to generate projected revenues.
The Comptroller and Auditor General of India (CAG) report noted that Special Purpose Vehicles (SPVs) in the state lacked the operational independence mandated by mission guidelines. The paid-up capital of the SPVs was restricted to just Rs 10 lakh instead of the mandatory Rs 200 crore, and full-time chief executive officers were not appointed in six of the seven sampled cities, leaving municipal commissioners with conflicting roles. Consequently, the SPVs functioned without operational autonomy, merely financing projects pushed by Urban Local Bodies (ULBs).
Across the sampled cities, 70 projects involving an expenditure of Rs 655.43 crore were executed outside approved Area-Based Development (ABD) zones. Furthermore, 44 unplanned projects worth Rs 623.86 crore were taken up, with 21 of them executed entirely outside ABD limits.
In Tirunelveli, the SPV dropped a planned Rs 8.25-crore electric vehicle project and instead diverted Rs 16.50 crore to procure street sweepers and jet-rodding machines for the city corporation. Administrative and office expense funds were also diverted across cities to clear corporation power dues, settle staff salaries, and purchase vehicles.
The audit highlighted that major commercial assets built to ensure the financial sustainability of the SPVs have failed to take off. Multi-Level Car Parking (MLCP) facilities and commercial complexes constructed across four cities at a cost of Rs 115.92 crore could not be put to full use due to incomplete installations of lifts, automation systems, and access ramps.
In Madurai, a tourism plaza built at a cost of Rs 2.62 crore has remained idle and unmaintained for more than three years. In Salem, only 39 of the 202 shops in the redeveloped Old Bus Stand, constructed at an outlay of Rs 104.53 crore, were leased out.
The CAG also red-flagged that Rs 57.72 crore in revenue generated from completed smart city assets was retained entirely by the municipal corporations rather than credited to the SPVs, eroding their long-term financial viability. PTI JR JR KH
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