NEW DELHI, October 11: In April 2010, TEHELKA showed how a company that existed only on paper was awarded a Rs 224 crore contract to clean up the Loktak Lake (The Lake and the Fake Firm) in Manipur. Chief Minister Ibobi Singh, who is also the chairman of the Loktak Development Authority, had rubbished TEHELKA’s findings and claimed the process of selecting K-Pro Infra Works Private Ltd, the company that was awarded the contract, was fair and transparent. Two years later, new documents give the lie to the CM’s statement. The lake project is characterised by undue favours and flagrant violations of government norms.
On 5 August 2008, in a meeting attended by the chief minister, forest and environment minister, chief secretary and principal secretary (Finance), it was decided to allot a work order for “removal of Phumdi from the Loktak Lake” to Hyderabad-based Progressive Construction Limited (PCL) on a trial basis for two months. No tender was floated, no auction held. The cost of the project was just around Rs 3 crore.
On 4 June 2009, the Loktak Development Authority (LDA) issued a tender notice inviting companies to apply for “Management of Phumdis in the Loktak Lake”. Phumdi is a water hyacinth that is choking the largest fresh water lake in the Northeast. Although CPWD norms require every tender in the country to give English and Hindi definitions of any local terms, the LDA tender notice (No. LDA/NIT/1/08-09) has absolutely no mention of what exactly a phumdi is. In a written response to TEHELKA, LDA Project Director Ibobi Singh (same name as the CM, but a different person) says that the English definition of phumdi was mentioned under the terms of reference for technical proposal. Why wasn’t it then mentioned in the main tender notification? How would an interested company apply for the job if it didn’t know what it was supposed to do?
Not surprisingly, only one bidder showed interest in the project: Delhi-based firm, K-Pro Infra Works Private Ltd. As shown in the 2010 TEHELKA exposé, this company was formed only on 22 June 2009 and has a paid-up capital of just Rs 10 lakh. The registered office in Delhi is a residential flat, where no one lives. Mysteriously, K-Pro Works entered into a joint venture with Hyderabad-based PCL for this project.
Interestingly, PCL is founded and controlled by Congress MP from Andhra Pradesh, K Sambasiva Rao. In Manipur, the company has been executing the dam components of the Thoubal Multipurpose Project. LDA Project Director Ibobi Singh says due to the existing work it has done the state, PCL had sufficient equipment and manpower to take on the lake project.
However, the project director’s statement leaves many questions unanswered. For one, why didn’t PCL directly apply for the job if it had the technical expertise? How did an absolutely unknown company, formed within days of the announcement of a multi-crore project, manage to get the contract? What is the relationship between K-Pro and PCL? The project director says both companies entered into a joint venture for the purpose of contract tendering and execution. Singh claimed the contract was awarded to K-Pro as a joint venture with PCL based on the capacity and credentials of the latter company. This begs the earlier question — why didn’t PCL directly apply for the job if it had the credentials?
The process of awarding the contract too is fraught with doubts. CPWD norms say there should be at least three bidders for any tender work, however big or small. K-Pro was the sole bidder.
The farce did not stop with awarding the Rs 224 crore project to K-Pro. In a clear violation of CPWD norms, K-Pro was offered an interest-free mobilisation advance. Clause 1 of chapter 32 of the CPWD manual limits the mobilisation advance to 10 percent of the tendered amount at a 10 percent interest. LDA Project Director Ibobi Singh defends the move and says the interest-free mobilisation advance was given against production of bank guarantees. He says nothing about the waiver of interest.
The muck in the Loktak Lake may be cleared in a few months or years. But, who will clear the muck in the Loktak Lake project? Too many questions, too few answers.
(Courtesy: Tehelka)