Lucknow: The Comptroller and Auditor General (CAG) has flagged serious procedural and financial irregularities in the functioning of the Uttar Pradesh State Industrial Development Authority (UPSIDA), revealing that industrial development contracts worth ₹255.75 crore were awarded to two builder firms on the basis of forged documents. The report states that eligibility and experience certificates were not properly verified before approving the tenders, raising concerns over internal controls and accountability.
The report, tabled in the state legislature, covers the period from 2017–18 to 2021–22 and points to lapses in tender evaluation, industrial land allotment, land acquisition, project quality monitoring, financial controls and recovery mechanisms. It also questions the effectiveness of UPSIDA’s internal oversight systems.
According to the audit, in 2015–16 M/s Balaji Builder was awarded 13 contracts worth ₹143.22 crore for development of two industrial sectors without verification of its experience credentials. Subsequent scrutiny found the certificates to be forged, leading to cancellation of the contracts in 2017. Similarly, M/s Akash Engineering & Builders received two contracts worth ₹112.53 crore without verification of experience and fixed deposit documents; these were cancelled in 2018 after the documents were found to be fake.
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Tender Evaluation and Project Delays
The CAG noted that technical and financial capacity of bidders was not adequately assessed before awarding projects. As many as 27 tenders ranging from ₹1.01 crore to ₹63.41 crore were allotted to contractors who did not meet eligibility criteria. The fallout was significant: 11 projects were completed with delays ranging from 61 to 2,612 days, while 14 projects remained incomplete even after 2,678 days, escalating costs and locking public funds.
Financial irregularities were also highlighted. Compensation amounting to ₹13.71 crore in 16 cases and quality testing fees of ₹1.63 crore in 34 works were not recovered. The audit further observed instances where contractors with limited capacity were entrusted with high-value projects, adversely affecting quality and timelines.
Land Allotment and Oversight Concerns
Irregularities were detected in land allotment as well. In the Mathura Industrial Area-B, a 3,929 sq m plot was allotted for ₹93.08 lakh without completing the prescribed application and interview process. In Jainpur Industrial Area of Kanpur Dehat, a 5,018.65 sq m plot was allotted to an ineligible applicant for ₹1.10 crore, even though evaluation indicated it should have been allotted to another qualified entity.
The report notes that although FIRs were registered in some cases, there is no clear record of action taken against responsible officials. Of the ₹12.65 crore recoverable, only ₹1.39 crore has been realised so far. The CAG has recommended fixing accountability and initiating action against the officers concerned.
Experts say such procedural lapses not only cause financial loss but also undermine investor confidence and delay industrial infrastructure development. Strengthening tender verification, enforcing eligibility checks and improving monitoring mechanisms are essential for safeguarding public resources.
The state government is reviewing the audit findings, and corrective measures may include tighter digital verification of credentials, stronger due diligence and clearer accountability frameworks to ensure transparency and timely execution of industrial projects.
