A report by the Comptroller and Auditor General (CAG) of India has laid bare significant irregularities and financial mismanagement in construction and renovation projects undertaken by the Public Works Department (PWD) of the Delhi government at 6 Flag Staff Road, the official residence of the Chief Minister of Delhi.
The audit findings, covering a period from June to October 2023, reveal glaring lapses in cost estimation, tendering, execution, and fund utilization.
The PWD had in March 2020 proposed remodelling and renovation of the CM residence while declaring it as ‘urgent’.
The audit examined two main projects undertaken at the site: the addition and alteration of the Chief Minister’s residence and the construction of a Staff Block and Camp Office at the same address.
What was originally planned as an estimated expenditure of Rs 7.91 crore for the first project ballooned to Rs 33.66 crore upon completion, a staggering 342.31 percent increase over the original estimate.
The audit findings were likely signed off by former Comptroller and Auditor General Girish Chandra Murmu who demitted office in November last year.
The extravagant expenses done by AAP supremo Kejriwal on his former residence, which has been dubbed by his detractors as “Sheeshmahal”, is being used by the BJP and the Congress to launch political attacks on the AAP. Weeks after he was released on bail in the liquor case in September , Kejriwal had vacated the premises in October 2024 after stepping down as Delhi Chief Minister on 17 September
Prime Minister Narendra Modi had raised the issue of these mind boggling expenses multiple times in the last couple of days to question the ‘credentials’ of the common man CM as Kejriwal calls himself.
The AAP has termed the attacks as ‘classic diversionary tactics’ by Modi and the BJP to impact the impending Delhi polls and retorted that the PM himself had spent huge amounts to renovate the Prime Minister’s Office.
The PWD, tasked with executing these projects, issued multiple revisions to the preliminary estimates (PEs), citing an increase in built-up area and modifications in specifications. By the project’s end, four additional estimates had been sanctioned to cover costs that were both unjustified and excessive, with a significant amount, Rs 18.88 crore, spent on what the auditors describe as “superior specifications, artistic and antique items.”
This included modular kitchens valued at Rs 68.76 lakh and sheer curtains purchased at Rs 2.96 crore.
Among the things that were installed included- Burma wood items worth Rs 7 lakh, brass lever worth Rs 6 lakh, tiles worth Rs 80 lakh, shower mixer Rs 8.40 lakh, faucet Rs 3.70 lakh, CoB light worth Rs 51 lakh, LED light Rs 13 lakh, lift sliding door Rs 60 lakh, modular kitchen Rs 31 lakh, 11 wardrobe worth Rs 60 lakh, fixtures in 12 bathroom worth Rs 14 lakh, marble stone worth Rs 2.2 crore, marble and teak worth worth Rs 65 lakh, ornamental moulding worth Rs 51 lakh and so on.
The CAG found that decisions to select consultancy firms and contractors were riddled with procedural violations. For consultancy services, restricted bidding was used without adequate justification or a transparent process. Similarly, the tendering for construction was conducted in a restricted manner, where contractors were shortlisted based on criteria such as financial soundness and experience in VIP areas. However, scrutiny revealed that only one of the shortlisted contractors met these stated qualifications.
Despite clear guidelines to use open e-tendering for awarding additional works, PWD avoided this competitive process and awarded Rs 25.80 crore worth of contracts directly to the existing contractor, undermining both transparency and cost efficiency.
Beyond the Chief Minister’s residence, the audit also uncovered mismanagement in the construction and alteration of the Staff Block and Camp Office. Despite an initial estimate of Rs 18.37 crore, this project was also plagued by fund diversions and incomplete execution. Funds totaling Rs 1.87 crore, originally meant for the Staff Block and Camp Office, were instead used to purchase furniture, sanitary items, and gym equipment for the Chief Minister’s residence, without any proper authorization. As a result, the Staff Block was never constructed, and the Camp Office was left as a raw semi-permanent structure, contrary to the original plan for a permanent building.
These projects were characterized by the escalation of costs and arbitrary changes to approved designs. The built-up area of the Chief Minister’s residence was expanded by 36 percent, while the specifications were upgraded mid-project without proper approval. This included ornamental works in both civil and electrical categories, which led to cost escalations. Additionally, Rs 9.34 crore was sanctioned more than two months after the work was completed, thereby retroactively regularizing expenditures that had already created liabilities for the government.
Documents available for audit revealed no evidence of a comprehensive study conducted before declaring the remodeling of the bungalow as “most urgent.” Initially, plans were laid out to add an additional floor to the existing structure. However, it was subsequently decided that the existing building would be demolished and reconstructed, a shift that necessitated hiring consultants and obtaining fresh approvals. The records do not clarify why this decision was taken, nor do they provide evidence that PWD made any serious effort to explore the feasibility of alternative approaches.
A separate issue is that during the planning phase, neither PWD nor the involved authorities raised concerns about costs associated with non-essential specifications.
Artistic and antique items, valued at Rs 18.88 crore, were added to the revised estimates with little scrutiny. This included nearly 200 civil and 40 electrical items that had no bearing on the basic utility of the residence or office space. The records show that these luxury expenditures were approved without objections by PWD authorities.
The audit also highlighted that the overall tendering process for these works failed to maintain the standards of transparency and competitiveness mandated under government regulations. Contractors were selected arbitrarily under restricted bidding, with minimal evidence to support their claims of qualification. Of the five contractors shortlisted for Work-I, only one had demonstrable experience in VIP-area projects, as per the audit findings. For Work-II, the list of eligible contractors included firms that had previously built classrooms, developed parks, and executed unrelated civic projects, exposing the arbitrary nature of their selection.
The diversion of funds for unrelated works further exacerbated the already poor execution of the projects, the audit has assessed.
The Rs 1.87 crore spent on furniture, gym equipment, and sanitary items for the Chief Minister’s residence was charged as an extra item under Work-II rather than Work-I, where it rightly belonged. This diversion not only distorted project budgeting but also delayed the completion of the Camp Office and Staff Block. The lack of transparency extended to the supply of materials, as supply vouchers and challans for purchases were not made available for verification. This omission made it impossible for auditors to confirm the authenticity or cost-effectiveness of the procured items.
Another troubling aspect noted in the report was that some changes in project scope and specifications were made after the initial approvals had already been granted. For instance, while the Staff Block was originally planned to be constructed alongside the Camp Office, PWD abandoned this component entirely without any clear reason. At the same time, the Camp Office was downgraded from a permanent structure to a semi-permanent one. The report suggests that these changes further compromised the efficiency and value of the project, leaving many facilities incomplete.
As per the report, much of the original documentation was reported as seized by the Vigilance Department, making it difficult for the auditors to verify crucial information, including materials purchased, the actual rates applied, and the contractors’ compliance with terms. These gaps in record-keeping point to deeper issues within the administrative framework of PWD and its oversight mechanisms.