Massive loot in the name of irrigation development in Vidarbha
The Hitavada’s Black Paper on Irrigation
Massive loot in the name of irrigation development in Vidarbha
By Kartik Lokhande
NAGPUR, May 24: THIS
is a story of a loot and fraud and abuse of political clout by a
handful of people who were expected to turn Maharashtra into a paradise
with lush green agricultural fields all over. This is a story that
unfolded itself when farmers were hanging themselves or poisoning
themselves to death under a terrible burden of debt. This is a story of
how a handful few cared a damn for the farmers’ welfare and for the
betterment of agriculture and emptied the State Exchequer by countless
thousands of crores of rupees by selfish machinations and manipulations
even as the farmers cried in silence as their fields went without a drop
of water for long stretches of time. This story has been enacted all
over Maharashtra, by political personalities, by Contractors with
political clout, some of whom have now moved into haloed chambers of
democracy. The gory details also show that this is an all-party loot of
the State’s money in the name of development of irrigation potential.
These details give only one impression: Such a loot cannot take place
unless the looters have the blessings of people in high places. And they
also give rise to one common sense question: If such money was poured
into Vidarbha’s irrigation projects, why is it that the agricultural
fields are still dry, and why are farmers still commiting suicide?
Obviously, the money is being siphoned off into private pockets.
In Vidarbha, these details assume a murderous form.
Here are some of those details:
n
Within a span of seven months in 2009, cost of 38 irrigation projects
under Vidarbha Irrigation Development Corporation (VIDC) escalated by a
whopping and shocking Rs 20,050.06 crore -- from Rs. 6,672.27 crore to
Rs. 26,722.33 crore.
n Thirty out of the 38 projects were granted hurried approvals in just
four days -- August 14, 2009 (11 projects); June 24, 2009 (10 projects);
July 7, 2009 (5 projects), August 18, 2009 (4 projects)
n Cost of these projects went up with the revised administrative approval granted at the level of VIDC
n Cost of six projects went up by 6 times to 33 times of their original cost
n In case of 12 projects, the cost shot up by more than twice the original estimates
All
these details can be found in various documents of the Government of
Maharashtra and the VIDC. Many of these doucments are available with
‘The Hitavada’, from which emerges this Black Paper on Irrigation, a
little ahead of what is being billed as a prospective White Paper by the
Government of Maharashtra.
Much is being talked about huge expenditure incurred and irrigation
potential created across the State. Also, many in the Government are
questioning how the cost of irrigation projects went up beyond one’s
wildest guesses in one single year -- 2009. In case of Vidarbha region,
situation is even worse. If the cost of irrigation projects across
Maharashtra went up by Rs 38,000 crore in 2009 alone, that of the
projects in Vidarbha region alone shot up by over Rs 20,000 crore within
a span of just seven months that year, taking the final figure to Rs.
26,722.33 crore.
The documents including office notes and Government Resolutions
available with ‘The Hitavada’ reveal this shocking tale of how massive
loot was given shape in the year 2009 in the name of giving a boost to
irrigation project in Vidarbha region. As per the documents, original
estimated cost of 38 projects was Rs 6,672.27 crore. However, between
January 15, 2009 and August 18, 2009 (within a span of just over seven
months), the cost was increased by a whopping Rs 20,050.06 crore!!!
Curiously, on some occasions, as many as 11 of these approvals were
cleared on one single day, raising questions as to what was the urgency
to do so or what was the reason behind sudden realisation of the need
for approving such a massive cost escalation.
There is more to the story. In as many as 12 cases, cost of the projects
became more than double the estimated cost. While, in six cases,
estimated cost rose between six times and 33 times in one single stroke.
Interestingly, on record, most of the administrative approvals were
revised citing reasons that did not call for such a massive hike. In
some cases, reason of meeting expenditure for Net Present Value (NPV)
was cited. In other cases, just a mention of ‘justifiable’ conditions
served as the basis for upward revision in administrative approval to
estimated cost of projects. And, in many cases, payment of mobilisation
advance to contractor concerned was shown as a reason to effect hike.
Cost of 12 projects more than doubled:
As per the documents in
possession of ‘The Hitavada’, hike in estimated cost of at least 12
projects in the above-mentioned period was more than double their
original cost. The project-wise hike in percentage is as follows:
Khedepar-- 111.33%,
Dava-- 110.86%,
Dhapewada LIS-II -- 137.90%,
Upper Wardha-- 107.99%,
Nimna Wardha-- 147.87%,
Bhagadi-- 178.26%,
Palasgaon Amdi-- 264.37%,
Pandhari-- 235.92%,
Lonwadi-- 226.94%,
Hirdav-- 271.72%,
Nimna Pedhi-- 269.02%,
and Pench (Navegaon-Khairi)-- 212.29%.
Cost of 6 projects revised by 6 times to 33 times:
The
story, however, did not stop here. As if it was not enough, the cost of
six projects saw upward revision up to six times to 33 times the
original estimated cost. The original cost of Nimna Penganga project saw
an increase by 643.66%. Interestingly, among the six projects, it was
the lowest hike!
Here is the project-wise cost hike in percentage to original cost:
Jigaon-- 924.27%,
Bhendara-- 1005.39%,
Khadakpurna-- 1281.32%,
Human-- 2918.30%,
and Yengalkheda-- 3302.44%.
The actual figures of hike are mind-boggling.
Sample this:
In case of Yengalkheda minor irrigation project in
Kurkheda tehsil of Naxal-affected and backward Gadchiroli district, the
cost as per first administrative approval was Rs 52.03 lakh. The first
approval was granted at the Government level. On May 11, 2009, the
second administrative approval was granted at the level of Vidarbha
Irrigation Development Corporation, and the cost rose to a surprising
high of Rs 17,70,29,000 (over Rs 17.70 crore), which was 3302.44 per
cent or more than 33 times the previous administrative approval cost!
One may feel that even the revised cost of this project is considerable.
But, VIDC had worked overtime in 2009 to produce more such wonders.
Here is another example:
The
estimated cost of Human Nadi project in Sindewahi tehsil in Chandrapur
district was Rs 33,67,74,000 and it was approved at the Government
level. On June 24, 2009, the first revision was done to administrative
approval and the estimated cost was increased to Rs 10,16,48,64,000
(that is, Rs 1,016.486 crore). It was over 29 times the estimated cost.
Many revised administrative approvals on one single day:
Another
shocking dimension to the story is that many revised administrative
approvals were granted on single day. In as many as 10 cases,
administrative approvals were revised on June 24, 2009. These 10
projects include Vaisawali minor irrigation scheme in Washim district;
Lonwadi minor irrigation scheme in Nandura tehsil of Buldhana district;
Dagadparwa minor irrigation scheme in Barshitakli tehsil of Akola
district; Dava minor irrigation scheme in Malegaon tehsil of Washim
district; Human Nadi project in Sindewahi tehsil of Chandrapur district;
Kharbadi Kolhapuri Type weir in Narkhed tehsil of Nagpur district;
Jigaon project in Nandura tehsil of Buldhana district; Khadakpurna
project in Deulgaon Raja tehsil of Buldhana district; Pentakli project
in Mehkar tehsil of Buldhana district; and Chandrabhaga medium project
in Achalpur tehsil of Amravati district.
There were more such ‘auspicious’ dates in those seven months. July 7
was one such date. This date saw issuance of revised administrative
approvals to five projects namely Bhendara medium project in Rajura
tehsil of Chandrapur district; Hirdav minor irrigation scheme in Lonar
tehsil of Buldhana district; Undri minor irrigation scheme in Karanja
tehsil of Washim district; Sapan Nadi project in Achalpur tehsil of
Amravati district; and Gondegaon minor irrigation scheme in Manora
tehsil of Washim district.
Still, August 14 was the most important date as it saw as many as 11
projects’ cost getting revised. Just a day before Independence Day
celebrations, authorities at VIDC found time to go through details of
these 11 projects and they completed study and granted revised
administrative approvals. These 11 projects include Mahagaon project in
Darwha tehsil of Yavatmal district; Zodga minor irrigation project in
Karanja tehsil of Washim district; Palaskhed minor irrigation scheme in
Karanja tehsil of Washim district; Pachpahur minor irrigation scheme in
Zari Jamni tehsil of Yavatmal district; Nimna Pedhi project in Bhatkuli
tehsil of Amravati district; Borghat-I LIS in Mul tehsil of Chandrapur
district; Shirud minor irrigation project in Hinganghat tehsil of Wardha
district; Pench (Navegaon-Khairi) in Parseoni tehsil of Nagpur
district; Sondyatola LIS in Tumsar tehsil of Bhandara district; Bembala
project in Babhulgaon tehsil of Yavatmal district; and Nimna Penganga
project in Ghatanji tehsil of Yavatmal district. Similarly, on August
18, revised administrative approvals were issued for four projects.
Such a massive hike in project cost and the haste shown in clearing the
proposals for revised administrative approvals was beyond one’s
understanding. However, this never came in public domain then and
remained the best kept secret of Water Resources Department. Now that
the Chief Minister Prithviraj Chavan himself has questioned the little
output of gigantic sums of money spent on irrigation development, more
skeletons are likely to tumble out of cupboard, provided there is a
political will to do so.
As for Vidarbha, this is just one episode of the long, sad saga of
irrigation development that was never done to help farmers. In the name
of irrigation development for agriculture, what was effected was a
massive loot of State exchequer by way of inflating costs with focus on
quantum of work rather than quality output of the money spent. As a
result, on paper, financial backlog was cleared but the water never
reached the expected beneficiaries.
By Kartik Lokhande
NAGPUR, May 25: THE story of the irrigation scam now advances into the area of mobiisation advance. The principal characters in this story are contractors with political clout -- with all parties. Hobnobbing with top bosses of political parties, the contractors working on different irrigation projects managed to garner huge sums as mobilisation advances before starting the work, but never started the work at all in many cases. So, the Comptroller and Auditor General (CAG) observed in its latest report: “....payment of mobilisation and machinery advances had resulted in undue benefit to the contractors.” And this ‘undue benefit’ has come in big measures to the firms, among others, headed by the families of Ajay Sancheti, the brand new Bharatiya Janata Party MP; and Sandeep Bajoriya, the Nationalist Congress Party MLC from Yavatmal.
Why this ‘undue benefit’? Simple. A source said wryly, “This is a kickback arrangement.” This is an unofficial but official way of getting back the money ‘spent’ in garnering the contract, when there is no legal provision in any tender document for any such advance in the State Public Works Department manual. Yet, the arrangement was green-signalled from the highest quarters (the details of which will be revealed later).
Here are some details from the document in possession with ‘The Hitavada’ outside the CAG record:
Official data shows that in the years 2007, 2008, and 2009, mobilisation advance to the tune of Rs 614.46 crore was paid to contractors to whom works related to projects under Vidarbha Irrigation Development Corporation (VIDC) were allotted.
The records reveal, only a few contractors were given mobilisation or machinery advance repeatedly for different works. Of a total of 48 works, the tenders were won by different agencies. These agencies included SMS Infrastructure Limited, headed by the family of BJP member and Rajya Sabha MP Ajay Sancheti, the Non Executive Vice-Chairman of the firm, and its joint ventures with other firms, Shri Nivasa Construction Company and its joint venture with other agencies, S S Fabricators, Zap Enterprises, F A Construction, Laxmi Civil Engineering Services Private Limited, Bajoriya Construction Company (headed by the family of Nationalist Congress Party MLC Sandeep Bajoriya), L B Kinjar, Anojkumar Agrawal and others.
This is how politics brings benefits. For, there is no official sanction for such arrangements. The Maharashtra Public Works Department (PWD) Manual strictly prohibits any such payment to contractors. Of course, the Central Public Works Department (CPWD) allows payment of mobilisation advance to the tune of 5% only in exceptional cases. However, in Maharashtra, exception is the norm and rules the exception. Instead of abiding by the State’s PWD Manual, VIDC, the custodian of Vidarbha’s irrigation development, threw the State Manual into dustbin and took an exceptional interest in following CPWD provisions, more in violation, of course. For, the CPWD also does not allow any breach of 5% barrier.
Here are some details: VIDC paid this advance to the tune of 10 per cent to 20 per cent of the project cost to contractors concerned. In case of a few contractors, VIDC paid mobilisation advance twice! The interest rate at which advance was given was too low.
Sancheti’s firms the biggest beneficiaries!
The biggest beneficiary of the mobilisation/machinery advance was SMS Infrastructure Limited and its joint ventures with other companies. This firm got the advance in six works.
The total of accepted tender cost for six works was Rs 815.0298 crore and Sancheti’s firm and joint ventures with other firms got mobilisation/machinery advance of Rs 113.4213 crore, which was 13.91% of the accepted tender cost! Interestingly, for a work related to Gosikhurd project, Shaktikumar Sancheti and S N Thakkar joint venture firm got advance that was 20 per cent of accepted tender cost. In two works -- one related to Gosikhurd and another to Nimna Pedhi project -- Sancheti’s firm got advance twice!
According to the records, like Sancheti’s company, two more contractor firms got advance to the tune of 20 per cent of accepted tender cost. These included Pune-based Soma Enterprises (owned by Avinash Bhosale who is known for his intimacy with top leaders in almost every major political party) and Mumbai-based S N Thakkar Construction.
The Other beneficiaries!
The contractor firms that got mobilisation and machinery advance twice also included Mahalaxmi and B T Patil joint venture that bagged a work related to Gosikhurd project, and Vaishnavi Construction and TBPR Infra Projects Private Limited joint venture that got a work related to Uma barrage.
Besides, four firms got advance to the tune of 15 per cent of the accepted tender cost. These included Hyderabad-based SEW Construction Limited, Nagpur-based Arti Infra Projects Private Limited, and in two cases Mumbai-based Zap Enterprises.
CAG, too, pointed out the irregularity:
Though a handful few twisted the norms and abused the system to extend advantage to politically well-connected contractors, the Constitutional watch-dog institution of Comptroller and Auditor General (CAG) has pointed out the irregularity in its latest report released last month.
CAG had taken up 27 projects for audit and found that mobilisation/machinery advances of Rs 399.91 crore were paid to contractors in five projects ‘even though there was no provision in the tenders.’ These five projects included Jigaon, Lower Pedhi, Gosikhurd, Dhapewada-II, and Uma. The documents in possession of ‘The Hitavada’ also include names of these projects and mobilisation/machinery advance granted thereof.
Interestingly, despite payment of mobilisation/machinery advance, the work was not started in certain cases. As per the CAG report, advances amounting to Rs 20.28 crore were paid in February and August 2009 to two contractors but the work had not started even after a lapse of two years. This means, though advances were paid to contractors in 2009, the work had not started even after mid-2011. “As a result, the amount of advance was still pending for recovery (July 2011). Thus, payment of mobilisation and machinery advances had resulted in undue benefit to the contractors,” the CAG observed.
Government’s lame excuse:
Interestingly, in reply to the audit findings of CAG, the Government stated in November 2011, “Though the condition for payment of mobilisation advance was not included in the tender conditions, considering the initial investment and purchase of material/machinery of huge cost advances were paid to the contractors in the interest of work.”
From the reply, it was clear that the Government wanted to justify its act of going against the provisions of its own circular. And, going by its own admission, if the advances were paid ‘in the interest of work’, question remains as to why it did not take any action against contractors who had got advances but had not started work. This makes the Government’s intentions (?) clear that it violated its own norms only to benefit contractors.
Obviously, the CAG dubbed the Government reply as ‘unacceptable’. “The reply is not acceptable as the financial and physical capacity of the contractor is the main criteria for allotment of work and if the condition for payment of mobilisation advance had been included in the tender, more bidders might have been attracted for the work,” observed the CAG in its report.
When Minister’s PS ‘protected’ mobilisation advance
In a letter dated May 14, 2008, then Water Resources Minister Ajit Pawar’s Private Secretary Suresh Jadhav, citing the ‘Minister’s directions’, asked WRD Secretary to scrap a circular declaring grant of mobilisation advance as not permissible
By Kartik Lokhande
The story of mobilisation advance now
advances into corridors of power. The plot is deeper than one thinks. It
could have been hatched in some haloed chamber up there, at the top end
of a long chain from the Vidarbha Irrigation Development Corporation
(VIDC) to Mumbai. The details are shocking, to say the least.
The story goes somewhat like this: There was a whistle-blower, the
Deputy Secretary Water Resources Department (WRD), Government of
Maharashtra. He sends a Circular -- -- Misc-0308/(189) MP-1 -- on April
16, 2008 -- ‘Mobilisation advance is not permissible. So, do not include
any such clause in tender documents. Anybody breaching this would be
liable for disciplinary action.’
This Circular sounds alarm bells all over -- in the contractors’ camp,
as well as in the VIDC. The whistle-blower needed to be told to keep
quiet. So comes on May 14, 2008, a letter from Suresh Jadhav, Private
Secretary to the Minister of Water Resources, conveying the Minister’s
desire to scrap the Circular immediately. (There are instructions to
scrap yet another Circular, too. But that detail can wait).
Here is the shocking tale:
If grant of mobilisation advance to
contractors was done at the level of VIDC with D P Shirke at the helm of
affairs as its Executive Director, the office of the then Water
Resources Minister Ajit Pawar also ensured that any attempt to stop this
illegality was nipped in the bud.
But around eight years earlier, that is on March 31, 2000, a Government
Circular had made it clear that provision for grant of mobilisation
advance or machinery advance to contractors should not be included in
any tender. However, since 2007, such advances were being sanctioned at
the level of VIDC. Some honest officers in Water Resources Department
(WRD) decided to act against the illegality. Accordingly, B T Redkar,
the then Deputy Secretary of WRD, had issued a circular on April 16,
2008, asking all the officers not to make a provision for grant of such
advance in tender documents. The officers proposing and approving grant
of mobilisation/machinery advance to contractors would be held
responsible for the irregularity and would be liable for disciplinary
action, the circular stated in no uncertain terms.
Obviously, the contractors formed a lobby and approached the VIDC and
then Water Resources Minister. Curiously, within a month, that is, on
May 14, 2008, the then Minister’s Private Secretary Suresh Jadhav wrote a
strongly-worded letter to WRD Secretary and conveyed the ‘Minister’s
directions’ of scrapping the circular saying ‘no’ to grant of
mobilisation/machinery advance. Jadhav had mentioned in the letter to
the WRD Secretary, “It has come to the notice of the Honourable Minister
that your department is issuing some circulars on its own. As per the
directions of Honourable Minister, his permission must be taken before
issuing such circulars. The Minister has directed to scrap circular
issued at your level.”
Within two days, the machinery in WRD swung into action. Still, the
honest officers stuck to their stand and requested the Minister to give
second thought to the directions regarding scrapping of the circular.
Still, the Circular was scrapped and the explanation given on record was
that the original circular dated March 31, 2000, had been scrapped
already and hence the recent Circular dated April 16, 2008, needed to be
declared infructuous.
That day, the contractors’ lobby must have heaved a sigh of big relief!!!!
‘Mobilisation advance granted
with approval of minister’
Yet,
whistle-blowing did not stop. The next time, it came in the form of
(retired Principal Secretary WRD Nandkumar) Vadnere Committee appointed
specially by the Government of Maharashtra to examine the issue of
corruption and wrongdoing in the VIDC. The one-man Vadnere Committee
submitted its report to the Government in June 2010, re-endorsing the
stand taken by Deputy Secretary that mobilisation or machinery advances
were not permissible. The report stated, in effect, that though there
was no provision in the tender document to grant mobilisation advance to
contractors, it was granted with the approval of none other than Water
Resources Minister and Ex-Officio Chairman of the VIDC. Incidentally, it
was Ajitdada Pawar who headed the Water Resources Department between
2007 and 2009.
The committee report stated that there was no clause for grant of
mobilisation advance in the tenders. The documents scrutinised by the
Committee revealed that VIDC had granted mobilisation advance to
contractors at the interest rate that was arrived at by adding 0.2 per
cent to Prime Lending Rate (PLR) of banks.
“These contractors got mobilisation advance with approval of (VIDC)
Chairman,” the Committee had observed. It had recommended to the
Government that the VIDC should evolve a system wherein the contractors
would get easy loans from banks and that the need for grant of
mobilisation advance would not be felt. (Part I of the Vadnere Committee
Report -- dealing with only Gosikhurd project -- is in the public
domain. The Part II is yet not available to people.)
The internal hue and cry following the Vadnere Committee Report, the
Water Resources Department discontinued the unofficial practice of
giving mobilisation or machinery advances, The Hitavada has learnt.
However, one influential contractor claimed that there was nothing
untoward in the practice that has been going on for forty years. This
person did not realise that even a forty-year-old practice could be
without the support of a rule, or could be in violation of any
regulation.
VIDC bosses overlook company frauds
This blog is very informative! Thanks for sharing this blog. Update latest blog.Let know more Irrigation projects.
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