Fund diversion, scrapped tech projects in Smart City Mission

CHENNAI: The Comptroller and Auditor General of India (CAG) report on the Smart Cities Mission (SCM) in Tamil Nadu, especially in Chennai, has exposed severe financial diversions, governance lapses, and the wholesale abandonment of key technology initiatives by Chennai Smart City Limited (CSCL) in Chennai, tabled in the assembly on Tuesday (September 8).

Despite completing 49 projects worth Rs 946.18 crore, CSCL routinely bypassed core mission guidelines, shifting focus away from the designated Area-Based Development (ABD) zone to fund general municipal works.

Also, SCL originally proposed 48 projects valued at Rs 1,366.25 crore.

However, the audit reveals that 8 planned projects worth Rs 279.03 crore were dropped without valid justification.

The dropped list includes high-impact urban tech initiatives such as a street light monitoring system for Rs 248.47 crore, Intelligent Traffic Management System (ITMS) for Rs 100 crore, solar charging stations and modular e-toilets for Rs 10.40 crore and GIS Utility Integration for Rs 8.89 crore.

In their place, CSCL executed 20 unplanned projects costing Rs 189.66 crore.

Of the 49 projects completed, 13 were situated completely outside the ABD area, and only 5 served as true Pan-city solutions.

Major funds were redirected to off-target projects, including the Command and Control Centre at Ripon Building Rs 51 crore, CITIIS Smart Schools for Rs 44.70 crore, and the Villivakkam Tank Restoration alongside its suspension bridge and secondary pond a total of Rs 45.98 crore.

The audit highlighted systemic accounting and financial governance failures within CSCL.

As per SCM guidelines, the paid-up capital of the SPV (special purpose vehicle) should be Rs 200 crore, Rs 100 crore of Government of India contribution and Rs 100 crore of State share.

Audit observed that none of the sampled SPVs had maintained the minimum requirement as per SCM guidelines, and the actual paid-up capital of each Smart City stood only at Rs 10 lakh.

Funds were diverted for other projects, such as Rs 15.33 crore was spent for shifting and resettling 268 families for the Villivakkam project, which is not part of CSCL.

The expenditure includes Rs 66.58 lakh for state government advertisements and Rs 18.44 lakh on non-Smart City consultants.

Of the Rs 82.51 crore earned in bank interest, SCL short-remitted Rs 26.60 crore to the Union Government and failed to remit any of the Rs 41.25 crore due to the State Treasury.