ESIC move into medical projects ill-planned: CAG

A building under construction at ESI-PGIMSR, Joka, Kolkata.
The Comptroller and Auditor General of India (CAG) has pulled up the Employees' State Insurance Corporation (ESIC) for an ill-planned entry into medical education. CAG in its special audit of medical education projects of ESIC has said that the decision to open medical colleges was ill-planned and no due diligence was done by ESIC while its move to exit it was for reducing losses and liabilities.
The CAG pointed out that all medical education projects taken up, except two, were behind schedule. The total cost of all the projects was revised from Rs 8,611.94 crore to Rs 11,997.15 crore resulting into cost overrun of Rs 3,385.21 crore.
It also noted that the corporation had sanctioned 17 out of 21 medical education projects and started construction of 16 medical colleges and incurred an expenditure of Rs 1,021.72 crore prior to the amendment of the Act.
Employees State Insurance Scheme is mandated to provide both cash compensation and medical benefits against a single contribution in certain contingencies. The scheme is operated by ESIC jointly with the states. The benefits of the scheme are provided to insured people and their families.
"Only 14 per cent of the PGI (Post Graduate Institute) students passed out joined the ESIC hospitals which indicated that the strategy of opening medical colleges for filling the vacant posts failed," the report said.
"There was no concept paper or feasibility study or project report to assess the viability of opening medical colleges vis-a-vis other alternatives to cope up with the shortages of medical and para-medical personnel in ESIC hospitals and dispensaries," it said. "Architectural, construction work was awarded on nomination basis without any justification or reasoning. Due to non-uniformity in clauses in agreements with architectural consultants, ESIC was liable to pay extra consultancy fees of Rs 24.68 crore. There were time and cost over-runs in majority of the medical education projects," it said.

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