There were hardly any bananas to pack and export. But Gujarat pulled off a miracle in setting up a banana pack house, with no tangible results. In the process, it led to an idle investment of Rs 6.11 crore.
The amount may appear meagre by today’s standards but the Comptroller and Auditor-General’s report, tabled in the Vidhan Sabha on Friday last, exposes how Government departments and their affiliated institutions function. “Failure to cross-check the reliability of the project report before taking an investment decision led to an idle investment of Rs 6.11 crore,” it said.
Ironically, the then State Government, led by Narendra Modi, had often boasted about these pack houses and the “export” of bananas to West Asia!
The State-promoted Gujarat Agro Industries Corporation Ltd got a feasibility study conducted by Global Agri Systems Pvt Ltd in July 2004 for setting up a dedicated banana pack house (BPH). The project cost was Rs 6.24 crore, under which a BPH at Jhagadia and two collection centres at Achalia (Jhagadia) and Vavdi (Mehsana), were to be set up.
Subsequently, Rs 7.14 crore was sanctioned to Gujarat Agro until April 2011. It awarded the work to the Ahmedabad-based Rinac India Ltd, which completed the work for Rs 6.11 crore. Gujarat Agro also engaged Cargo Service Center India Pvt Ltd for the operation and maintenance of these centres for five years, for a license fee of Rs 3.10 crore.
However, after paying the first biannual instalment of Rs 20.47 lakh in July 2010, Cargo Service requested, in March 2011, the deferment of licence fees and, just two months later, expressed apprehensions about “running the project viably due to limited availability of bananas in the region.”
A probe committee later discovered that “banana being a very low value fruit and extremely competitive, it was difficult to absorb the processing cost through the pack house,” and “the availability of bananas in Bharuch and the surrounding areas was limited for six to seven months”. Also, the farm gate price (the price for direct sale from farm) was higher in comparison to other States.
It was also found that the export of bananas was not viable due to low price realisation and absence of a minimum guaranteed price. In December 2011, Gujarat Agro terminated the agreement with Cargo Service. The BPH and the two centres have since remained idle.
Interestingly, the CAG report said the December 2005 project report did not study and reflect on “whether bananas were available throughout the year in Bharuch region.” There was no analysis on pricing of bananas or cost of processing at BPH and whether this cost was viable for export to West Asia as envisaged.
The CAG also rejected Gujarat Agro’s lame-duck defence of its stand and was still awaiting the Government reply, while compiling the report in December 2013.