Petrol pump lease lapses cost Margao council crores: Audit

Margao Municipal Council failed to enforce lease agreements, leading to major revenue leakage.

Photo Credits: The Goan/File photo

MARGAO
The government’s audit report for the financial year 2023-24 has again questioned revenue leakage, this time over the short collection of rent and the Margao Municipal Council’s failure to enter into a lease agreement with a petroleum company for land allocated to set up petrol pumps on prime land in the commercial capital.

The audit has termed the civic body's internal control mechanism as “weak”, insisting that it has failed to implement various provisions of the Goa Municipalities Act, 1968, resulting in a loss to the municipality. The audit has since recommended that the municipal council should, as soon as possible, improve its internal control checks.

According to the audit report, Section 88(3) of the Municipalities Act allows councils to lease immovable property for up to three years with an annual rent increase, while preventing lessees from making permanent constructions. “Such lease may be renewed by the council beyond the period of three years with the permission of the Director, who shall decide the reasonableness of the annual increase in rentals before issuing permission for extending the lease period,” the report stated.

However, in Margao, of the four petrol pumps operating on municipal land, lease agreements have only been executed for two, while the remaining two—owned by another petroleum company—have continued operations without any formal agreement.

The report further reveals that the MMC had resolved to revise petrol pump rents with effect from January 2010. Yet, a demand notice for Rs 36.12 lakh issued to a petroleum company for the period from November 1, 2020, to September 30, 2024, as per an agreement executed on March 31 2022, remains unpaid.

Adding to the concerns, the audit highlights that trade licences were issued to two petrol stations belonging to another petroleum company for a year, but rents have been collected since January 2011 without a proper lease agreement in place.

“Therefore, there was no 10 per cent increase in rent for the company to comply with. As per the payment records of the demand register of rent, it has been observed that the two vendors have revenue arrears amounting to Rs 33.48 lakhs and Rs 50.50 lakhs, respectively, for the period from November 1, 2009, to October 31, 2023, which has not been paid to date,” the report stated.

The audit further observed that the MMC had issued a notice to a petroleum company in 2021 to execute the lease agreement. “However, to date, there has been no progress made as per the records produced. The MMC accepted the rent at 60 per cent below the actual rent applicable from the petroleum company, besides the non-execution of the lease agreement for the last 13 years. In this regard, the audit sought to determine whether the MMC issued eviction notices to petrol pump agencies under the Public Premises (Unauthorised Eviction) Act, 1988, for non-execution of the lease deed,” the report stated.

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Margao council yet to recover fees from 20 mobile towers

MARGAO: The Margao Municipal Council (MMC) has come under scrutiny for failing to collect renewal fees from mobile tower operators within its jurisdiction, a lapse that could cost the civic body significant revenue.

According to an audit report, Section 323 of the Goa Municipalities Act, 1968, empowers Urban Local Bodies (ULBs) to charge fees for granting permission to erect mobile towers. These permissions are valid for one year and must be renewed annually.

“As per information furnished by the MMC, there are 20 towers erected in the jurisdiction of the council to date. It has been observed that the renewal fees from these towers were yet to be calculated and recovered from the mobile tower operators,” the report stated, with the audit asking the MMC to furnish the corrective action initiated by the civic body, besides the recovery status.