A new report from the Comptroller and Auditor General (CAG) has highlighted big problems with the project to build the Delhi Chief Minister's (CM) residence, called Sheeshmahal. According to the audit, which CNN-News18 got hold of, the project ended up costing Rs 33.66 crore. This is much higher—342% more—than what was originally planned for the cost of the project.

Massive cost overrun: Rs 33.66 crore spent on Sheesh Mahal

The CAG report says that the project was originally expected to cost Rs 7.61 crore. However, the final cost ended up being Rs 33.66 crore, which is more than three times what was planned. The cost of the project was first set at Rs 8.62 crore, which was already 13.21% higher than the original estimate. But by the time the project was finished in April 2022, the final cost went over the tendered amount by 290.49%. This has raised concerns about poor planning and mismanagement of funds.

“This work was awarded at a tendered cost of Rs 8.62 crore, which was 13.21 percent above the estimated cost of Rs 7.61 crore. The work was completed in April 2022, and the final payment of Rs 33.66 crore was made to the contractor. This work awarded at 13.21 percent above the estimated cost was finally completed at 342.31 percent above the estimated cost and 290.49 percent above the tendered amount,” the CAG report states.

Prime Minister Narendra Modi has criticised the Aam Aadmi Party (AAP) government, saying that Sheeshmahal is a symbol of corruption. He believes the project shows misuse of public money. This issue is likely to be a big topic for the Bharatiya Janata Party (BJP) as they get ready for the upcoming elections in Delhi.

The report points out several problems with how the project was planned and carried out. The CAG says there was confusion in submitting initial cost estimates, which made the foundation of the project unreliable. During the work, the Delhi government's Public Works Department (PWD) increased the size of the building from 1,397 square meters to 1,905 square meters, which is a 36% increase, but they didn’t explain why. This extra space added even more cost to the project.

The report criticises the way the consultants were chosen for the project. It says that only three consultants were considered, and the work was given to one of them just one day after getting their bids. There was no explanation for why this quick decision was made. The report also says that during the work, the project's specifications were changed often, which led to the use of more expensive materials and luxury items like antiques and artwork.

“During execution, PWD increased the built-up area from 1,397 sq. m. to 1,905 sq. m. (36 percent), without any justification, highlighting poor planning of the work and increasing the overall cost. The specifications of the work were changed, and more expensive items, such as artistic and antique items, were added,” the report states.

Another problem raised in the report is that the work wasn't given out using an open and fair tendering process. Instead, the work was awarded through a limited selection, which meant the government could not get better, more competitive prices. This resulted in an estimated loss of Rs 25.80 crore for the government.

The CAG report also highlights that luxury items were added to the CM’s residence, which caused the costs to rise a lot. For example, Rs 46 lakh was spent on putting marble stones on the walls, and Rs 47 lakh was spent on installing smart LED lights. Other costly items included modular kitchens, big LED-screen TVs, refrigerators, and even a sauna and jacuzzi. These expensive additions greatly increased the overall cost of the project.

The BJP has used the expensive items in the CM’s residence to criticise the Aam Aadmi Party (AAP), calling the spending excessive when the government should be focusing on providing basic services to the public. BJP leader Amit Malviya has claimed that the costs mentioned in the report are only part of the story, suggesting that much more money may have been spent on the project in 2023. "Far more was spent by Kejriwal on his Sheeshmahal, till at least the middle of 2023," Malviya said. He also pointed out that the CAG report didn’t have full access to all the details, such as expensive materials worth crores that were found in a recent inventory conducted by PWD.

“Even in the CAG Report, it’s clearly mentioned that it was not provided with full information. The inventory made recently by PWD after Kejriwal vacated Sheeshmahal, in itself, has materials and luxury goods worth crores,” he said.