CAG Report No. 11 of 2025 — Implementation of Smart City Mission, Government of Karnataka

Chapter-II
10
Dropping of 160 out of 544 (30 per cent) projects originally planned was against
MoHUA instructions which permitted such deletions only during exigent
circumstances. Audit analysis of dropped projects revealed that projects such as
Bus terminal with multi-utility facility, construction of flyover, extension of
smart class project for Pre-University college, bus shelter, construction of under
pass and water supply etc., which derives public utility were dropped based on
the reasons viz., high costs, non-availability of space etc. Further out of 160
dropped projects, 25 projects faced fund constraints, 21 projects were unfeasible
and 16 projects were already executed by other agencies. Other major reasons
for dropping of projects were non-availability of land, irresponsive tenders,
legal issues etc.
The State Government replied (April 2025) that necessary approval of HPSC
were obtained. The fact remains that the SPVs could not implement the
schemes as proposed in the SCPs.
2.2.1.2 Addition of new projects
As per the MoHUA advisory, adding of new projects in SCP was permissible,
provided they adhered to the Mission guidelines which required citizen
consultation before selecting projects. Further, adding projects outside ABD
areas and including non-ICT projects as Pan City initiatives was not
permissible.
On scrutiny of records, Audit observed that 230 projects costing ₹3,406.21
crore12 were added to the SCP in lieu of dropped projects. Out of 230 projects,
40 projects worth ₹186.79 crore (Appendix-2.2) were added to the SCP at the
request of line departments/ people’s representatives. These projects related to
regular civil works such as construction of roads, schools, hospitals etc., which
were not aligned with the vision and challenge process of smart cities. The
selection of these projects was also not based on citizen consultation as per the
Mission guidelines.
Also, the Mission guidelines stipulated that Government contribution for smart
cities was to be used only to create infrastructure that had public benefit
outcomes. In respect of three13 out of the above 40 projects, the infrastructure
created had no public benefit outcome as they were beneficial only to a
particular section of society.
Thus, adding of projects to SCP that were not aligned with the city’s vision and
goals resulted in shifting goal posts and vitiation of the challenge process for
selecting smart cities.
The State Government accepted the observation and stated that it will be
considered in future project implementation.
12 The added projects need not match with deleted projects in physical and financial terms.
13 Redevelopment of Tennis Court, Interior work for Department of Women and Child and
New building for Department of Women and Child.