The CAG report tabled in the assembly by Chief Minister Zoramthanga on Thursday said that the Directorate of Hospital and Medical Education (DHME) had entered into a memorandum of understanding with Intergen Energy Limited (IGEL) in 2012 for the installation of renewable energy and water treatment plants at nine hospitals based on suo-motu proposals submitted by the Delhi-based firm.?

According to records of the DHME, water treatment plants were installed by the firm in five hospitals at a total cost of Rs 50 lakh and payments were made to the entity between March 2012 and February 2014, the report said.?

The private entity provided water to four hospitals for a short duration, ranging from four months to two years, and failed to supply water to a hospital even though the MoU stated that the company will ensure an uninterrupted water supply suitable for drinking for a period of 10 years after installations, the CAG said in its report.?

In spite of the penalty provision in the agreement, the health department did not take steps against the IGEL and instead, entered into another pact in June 2019, the auditor said.?

According to the new agreement, the previous MoU was terminated and the DHME would purchase the system or equipment installed in the five hospitals at the cost of Rs 9 crore in three instalments.?The DHME paid Rs 4.80 crore (Rs 3 crore in July 2019 and Rs 1.8 crore in December 2020) as the first and second instalments, the CAG report claimed.?

However, treated water was not supplied to the five health facilities, including Aizawl hospital and the state referral hospital at Falkawn near the state capital, since May 2020, after signing the buy-back agreement, it said.?

The CAG also observed that all the hospitals were getting water supplied on priority by the state public health engineering department and there was "no insufficiency" in the supply of water to the hospitals before or during the period of MoU with IGEL.

The auditor said that the “expenses totalling Rs 5.3 crore incurred on the installation of water treatment plants and buy-back agreement was avoidable as there was no water scarcity in the hospitals prior to the signing of the agreements”.?It further said that the department not only made an "avoidable expenditure of Rs 5.3 crore but also created liability of Rs 4.20 crore".?

"The state government needs to investigate the matter and take action against the officials responsible for not invoking penalty provisions in time, signing an unnecessary buy-back agreement and spending Rs. 5.3 crore as well as creating a further liability of Rs 4.2 crore," the report said.?

It also said that the engagement of IGEL was "arbitrary" and "the proposal of the firm was agreed to by the department without ascertaining the actual need for water supply in the hospitals".

The Congress was in power in the state between 2008 and 2018, while the ruling Mizo National Front (MNF) assumed power in December 2018. ?Congress leaders could not be reached for comments.