NEW DELHIL The Comptroller and Auditor General has indicted Reliance Infrastructure Ltd of the

Anil Dhirubhai Ambani

Group for collecting Rs 662 crore as toll on two projects of 6-laning of highways and allegedly investing Rs 303 crore out of this in its own mutual funds even before commencement of work.

The auditor has questioned R-Infra’s investment of Rs 78 crore out of Rs 120 crore it had collected on the Delhi-Agra highway project and Rs 225 crore (up to August 2012) out of Rs 542 crore the company had collected on Pune-Satara project. The toll money was invested in Reliance ADAG’s own mutual funds — Reliance Liquid Fund and Reliance Money Manager Fund — even before the work started, according to the CAG.Interestingly, R-Infra blamed National Highway Authority of India (NHAI) for delaying the projects as it rejected the auditor’s charges. “The appointed date (DA) of project got delayed as NHAI could not provide the requisite clearances on time,” said a spokesperson of the company.“The amount invested in mutual funds at any given point of time was Rs 3 crore to Rs 5 crore and not the exorbitantly high figure that they are quoting. Even the invested amount is on temporary basis, which is permissible,” the spokesperson said.In its report, likely to be presented in Parliament on Tuesday, the federal auditor says NHAI allowed R-Infra to collect toll in violation of the concession agreement as the concessionaire had not even begun work on the “appointed date” (for toll collection) and failed to achieve the mandatory first and second milestones as listed in the project agreement.CAG report says the concessionaire made false declaration of mobilizing men and machinery at the site. Though the R-Infra started collecting toll from the appointed date of October 16, 2012 in the Delhi-Agra project, the auditor says there was “nil” work against the first milestone to be achieved on June 27, 2013.The spokesperson said the allegations made in CAG report are completely baseless and devoid of any facts. “We have not violated any law/concession agreement. All investments and expenses are made as per the agreement signed with NHAI,” he said.The Reliance Infrastructure Ltd of the ADAG was allotted the two NHAI projects under public-private partnership mode.The auditor, government sources said, has raised objections to this diversion of road project funds to the Reliance ADAG’s mutual funds quoting article 31.3.1 of the Concession agreement and clause 4.1 of the Escrow agreement as the company had failed to achieve first and second milestones in the project -- that is commencement of work.In the Pune-Satara project, R-Infra promoted a special purpose vehicle (SPV) — PS Toll Pvt Ltd — and started collecting toll from the “appointed date” i.e. from October 2010 and continued to collect toll which was Rs 542 crore till March 2014. R-Infra was allowed to collect toll though it failed to commence work as per the concession agreement, the federal auditor said. According to the report, till August 2012, R-Infra invested Rs 225 crore in its own mutual funds.In the Delhi-Agra project, R-Infra started collecting toll through its SPV — DA Toll Road Pvt Ltd — from the appointed date of October 16, 2012 and had collected toll of Rs 120 crore till August 2013. The auditor says company was allowed to commence toll collection even as the condition of achieving first milestone of commencement of work was missing.CAG has reviewed 20 PPP six-laning projects of NHAI and has found that more than Rs 902 crore was not kept in the “Withheld Amount Account” or the escrow account which was mandatory as the government could have stopped release of this fund against failure of the concessionaire to achieving milestones as listed in the concession agreement.