HB failed in demand assessment, chose wrong sites: CAG

By R.K. Radhakrishnan

CHENNAI, SEPT. 12. Over 50 per cent of the units constructed by the Tamil Nadu Housing Board under the `small and medium towns scheme' could not be sold as it failed to assess the demand and because of wrong site selection.

As many as 1,206 out of the 2,120 houses had no takers, resulting in blocking of Rs. 17.01 crores of board funds.

According to the latest Comptroller and Auditor- General report, the board completed construction of the houses at a cost of Rs. 27.65 crores under nine schemes by March 1997.

But till December 1999, 1,206 houses remained unallotted. At Udumalpet, where houses worth nearly Rs. 5 crores remained unallotted, the site was six km away from the town and there were no frequent bus facilities. Besides, the location was surrounded by agricultural land and the cost worked out by the board was much higher than the market value.

At Srivilliputhur, 217 houses worth Rs. 2.93 crores remained unallotted. High cost, roof leakage, non-availability of borewells for drinking water were among the reasons cited for the poor patronage for the project.

At Chengam, 86 of the 100 houses had no takers. The project was located in a backward area and local residents threatened buyers from outside.

There was another factor too which led to the poor buyer- interest. Deposits were not taken from ``provisional allottees.''

This despite the Board deciding in 1991 that as soon as tenders were finalised, lots be drawn, provisional allotment be made and an initial deposit of 30 to 40 per cent be collected from the allottees. The CAG notes that though all nine schemes were sanctioned after this decision, the executive engineers of the executing divisions failed to follow this procedure.

The board lost in selling shops in its commercial complexes too. For, the sale price was fixed at rates much higher than the market rate, notes the report. As many as 39 shops were left unallotted, resulting in non-realisation of a revenue of about Rs. 7 crores.

In its reply to the CAG, the Government, in October 2000, said land acquisition was time-consuming and that there was a two to three-year gap between demand assessment and actual completion which led to poor demand. But the board was able to sell all houses under 77 other schemes; only these nine the CAG looked into had problems.

``The reply was not tenable since the cost of the houses escalated, on an average, from 203 to 247 per cent of the advertised cost even at the time of administrative sanction and there was a clear failure on the part of the board in not reassessing the demand before the commencement of commercial construction. As regards the claim of good sale of houses under other schemes, it was noticed that in 16 more schemes 825 houses, valued at Rs. 24.89 crores, remained unallotted till September 2000.''

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