Agartala: The Comptroller and Auditor General of India (CAG) has censured the Left Front government in Tripura for providing undue favour to a Kerala- based private organisation in setting up a medical college in Agartala.

With an annual intake capacity of 100 seats and a general hospital with 1,000 beds, the medical college and hospital, which was set up in 2005, was envisaged on a Public Private Partnership (PPP) model with a project cost of Rs.164 crore.

Tripura government had signed an agreement with the Kerala-based Global Educational Net (GENET) in October 2004 to set up India's first PPP model medical college and hospital upgrading the existing facilities of a district hospital.

"To run the joint venture project, the Tripura government had deposited Rs.25 crore in the joint account while the GENET had deposited Rs.18.87 crore against Rs.25 crore in the account," said the CAG report, which was tabled on Tuesday in the Tripura assembly.

The report said, "To ensure protection of the huge government assets, the state government did not taken adequate safeguards in the terms and conditions. Before formulating the project, the state government did not take any assistance from the legal, financial and technical experts and also did not invite expression of interest."

The CAG report, titled 'Undue Favour to a Private Partner,' said that the government should assess the credentials and financial capacity of the private partners before entering into agreements.

GENET had taken loans of Rs.35.44 crore from the Housing and Urban Development Corporation Ltd (HUDCO) mortgaging the entire leased government land and assets and almost all the amount had been spent by the organisation without maintaining proper accounts.

"Now the liability of Rs.40.30 crore as on June last year, (Rs.35.44 crore as principal amount and Rs.4.86 crore as interest) and the other liabilities lies with the government," the CAG report stated.

"The objective of setting up a medical college under PPP with GENET faced a premature end due to deficiencies in the PPP agreement and injudicious selection of the firm, as it persistently failed to meet its commitments," the report said.

The CAG pointed out that despite deficiency in faculty, infrastructure and clinical materials highlighted by the Medical Council of India (MCI), the government of India had renewed permission for the 2007-08 academic year in view of the special limitations prevailing in the northeast and on an undertaking given by the Tripura health minister to comply with all the deficiencies within a specified period.

"GENET did not rectify the deficiencies and subsequently the Union government and the MCI denied permission to admit students in academic year 2008-2009," the CAG report added.

To protect the interest of students and over 900 doctors and other employees, the Tripura government had taken over the medical college and hospital in May last year. IANS