The Comptroller and Auditor General (CAG) has raised serious concerns over delays, planning deficiencies, and cost overruns in infrastructure projects undertaken by the Indian Navy, warning that these shortcomings could adversely affect operational readiness.
The findings highlight weaknesses in planning, contract management, and monitoring systems within naval works execution.
The observations are contained in Performance Audit Report No. 30 of 2025 on “Works Management in Indian Navy”, which was tabled in both Houses of Parliament on Thursday (December 18, 2025).
What did the CAG find in its audit of the Navy?
The audit examined a sample of projects executed under the Annual Technical Works Programme (ATWP) and the Annual Major Works Programme (AMWP), covering works that received administrative approval between 2018-19 and 2022-23.
Emphasising that the timely creation of technical, administrative, and residential infrastructure is critical for sustaining naval operations, the CAG noted that alignment with long-term planning was inadequate.
Only 36 per cent of sanctioned ATWP works were found to be aligned with the Navy’s long-term infrastructure roadmap, known as ‘Plan 1’. In the case of AMWP works, the audit could not assure alignment with ‘Plan 2’, the corresponding long-term plan for civil works, due to insufficient information.
Why were the Naval projects delayed?
While some improvement was seen in meeting timelines for granting Approval-in-Principle, the audit found that administrative approvals were delayed in 57 of the 69 works examined.
These delays stemmed from late submission of estimates, procedural shortcomings, and varying levels of project complexity. The CAG also flagged deficiencies in projecting realistic completion timelines, as well as weaknesses in the preparation of cost estimates and engineer appraisals.
What was the problem with the contract management?
Contract management emerged as a key area of concern. The audit pointed to unclear instructions on contractor enlistment, leading to inconsistent practices across formations.
In three cases, ineligible bidders were allowed to participate in tenders, resulting in contracts worth ₹78.03 crore being awarded in violation of established norms designed to ensure fairness and transparency.
How acute was the contract management problem?
Delays in contract finalisation were widespread. Of the 14 ATWP contracts reviewed, 13 were concluded late, with delays of up to 52 months.
All 47 AMWP contracts scrutinised were also finalised behind schedule, with delays extending up to 64 months. These were attributed to delays in technical sanctions, changes in project scope, repeated re-tendering, deficient estimates, and disruptions caused by the COVID-19 pandemic.
Why are time extensions to projects a cause for trouble?
Execution delays further compounded the problem. Most contracts were granted time extensions ranging from several months to over three years, often without approval from the competent financial authority. In many cases, actual completion dates overshot the planned timelines by as much as 231 weeks.
The audit also highlighted major shortcomings in Special Project ‘S2’, which was scheduled for completion by December 2023 but remained incomplete as of May 2025.
The project is awaiting revised administrative approval involving a cost overrun of ₹95.72 crore over the original sanction of ₹235.92 crore. The CAG attributed this to inadequate initial assessments, changes in tendering strategy, non-compliance with eligibility criteria, and procedural lapses.
Why did the monitoring mechanism fail?
On monitoring mechanisms, the CAG noted that the Integrated Project and Budget Management System, introduced for real-time oversight, was not being optimally utilised across formations. Project Monitoring Groups were often constituted late, undermining their effectiveness.
Based on its findings, the CAG has recommended that the Ministry of Defence ensure closer alignment of works with long-term plans, revise timelines based on project complexity, strengthen contract management and monitoring systems, adopt the Structured Financial Messaging System (SFMS) for bank guarantees, and enhance project oversight to ensure timely and cost-effective delivery of naval infrastructure.