CAG said delay had resulted in "reduced" naval force levels and more than 220% price escalation in two of its key projects.
Rapping the navy's indigenous warship-building programme for delays and poor cost estimation, the government auditor CAG today said this had resulted in "reduced" naval force levels and more than 220% price escalation in two of its key projects.
The programmes include the Project 15A for building three 6,500 tonne frigates, Project 17 for three 4,900 tonne frigates, and Project 28 for four Anti-Submarine Warfare Corvettes.
The comptroller and auditor general in its report said that by 2012, the Navy may retain only 61, 44 and 20% of the envisaged force levels of frigates, destroyers and Corvettes respectively.
"The lead ship in all the projects is delivered or expected to be delivered only after a delay of four to five years from the original date. Till date, only one P-17 ship has been commissioned. As a result, the navy will continue with a reduced fleet strength," it said.
The government auditor listed reasons such as delay in finalisation of structural drawings, timely availability of steel and inadequate infrastructure of the Defence Public Sector shipyards for time overruns in these projects.
Slamming navy's methodology for estimating the cost of ships, the CAG said it has resulted in "unrealistic approvals for funding projects with every likelihood of cost growth at the time of project itself".
"A professional mechanism doesn't exist to provide reliable and accurate data regarding costs to the decision-making authority. There has been an increase of 260% and 226% in the approved costs of P-17 and P-15A respectively," it said.
The report observed that the original sanction for the Project 17 in 1998 was Rs2,250 crore but it was revised to Rs8,101 crore in 2006.
Similarly, the cost of Project-15A went up from Rs3,580 crore in 2001 to Rs11,662 crore in February 2006.
The report said the costing data for equipment such as the Long Range Surface-to-Air Missile (LR-SAM) and the Multi-Functional Radar (MFR) was not available as they were yet to be sanctioned.
The CAG observed that there was "undue delay" in the conclusion of contracts for Project-17 and Project 15A, and the contract for the Project-28 was not even signed even after seven years of the commencement of the project.
"The contract for the Project-28 has not been signed till June 2010 even though the letter of intent was signed in March 2003," it said.
The CAG also pointed out that lack of modern infrastructure at the defence shipyards for warship building had resulted in delays in ship construction.
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