Arbitration awards of past 20 years in Delhi PWD, Irrigation and Flood Control dept to be reviewed

New Delhi, Aug 27 (PTI) Delhi Chief Minister Rekha Gupta has constituted a high-level committee to review arbitration awards of Rs 1 crore and above passed in the Public Works Department and the Irrigation and Flood Control Department over the past 20 years, officials said on Wednesday.

According to Gupta, arbitration awards have repeatedly caused economic losses for the government. She said the purpose of forming the committee is to gather details of decisions delivered against the government, assess the payment amounts, and evaluate the losses incurred.

She said the Comptroller and Auditor General (CAG) will serve as a member of this high-level committee, while the Additional Director General (PWD/I&FC) will act as the member secretary.

The chief minister added that the internal finance support teams of the PWD and the Irrigation and Flood Control Department, along with two audit teams from the Directorate of Audit, will assist the committee.

The panel will review all arbitration awards of Rs 1 crore and above in both departments over the past 20 years, Gupta said.

It will compile year-wise and award-wise data on these cases, including the total number of arbitration matters and the proportion decided against the government. Along with payment details, the committee will assess the financial losses incurred by the government in such decisions.

Once the departments concerned provide the necessary data, the committee will commence its review. If required, the Directorate of Audit will assign additional audit teams based on the volume or complexity of cases, as recommended by the committee, said an official statement.

Stating the purpose of this review, the chief minister said it is to assess the extent of financial losses resulting from legal disputes and to bring transparency about the expenditure or loss of public funds over the last two decades.

The chief minister had recently directed the Anti-Corruption Branch to investigate an arbitration case stemming from irregularities and delays in the construction of the Barapullah Phase-III Corridor.

Originally scheduled for completion in October 2017, the project suffered repeated delays and was eventually referred to arbitration. The award was passed in favour of the contractor, mandating a payment of Rs 120 crore.

When the payment was withheld, the company approached the High Court, which in May 2023 ordered the PWD to pay Rs 175 crore, inclusive of interest and GST. This payment was made during the tenure of Atishi as the public works minister in the previous AAP government.

Gupta added that many such instances were reported during the previous government's tenure, which compelled her administration to form the committee and initiate an inquiry.

According to her, to prevent such financial irregularities in future development projects, the government has also decided to remove arbitration clauses from contract terms.

Henceforth, any disputes between departments and contractors will be resolved exclusively through the courts, the statement added. PTI SLB SLB NSD NSD