IMPHAL, October 22: Amidst demands for CBI investigation into the multi-crore Loktak Lake scam by various political parties and civil society groups, an IFP investigation has revealed that another Rs 22.4 crore was given free of interest as machinery advance to K-Pro Infra Company by Loktak Development Authority (LDA) by flouting CPWD norms.
It may be recalled her that, the New Delhi based Tehelka magazine had first exposed the multi crore Loktak Lake scam in which the Phumdi management of Loktak Lake was awarded to a Hyderabad based Progressive Construction Ltd on trial basis for 2 months in August 2008 and a year after K-Pro Infra Works Pvt Ltd, a newly born company and the lone bidder was awarded the Rs 224 crore project.
The Tehelka expose was mainly about the conspiracy surrounding the Loktak clean-up project besides undue favours and flagrant violations of government norms.
The first question was why not the term was PHUMDI’ was not clearly defined in the tender notice 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. Phumdi is the floating bio-mass or vegetation found in the Loktak Lake.
The undue favours cited by Tehelka magazine was the grant of 10 percent mobilisation advance amounting to Rs 22.4 crores free of interest.
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.
Now, IFP’s follow-up investigation has revealed that a sum amounting to Rs 22.4 crores was given to K-Pro Infra Works Private Ltd free of interest as machineries advance by flouting CPWD norms.
Clause 6 (1) of Chapter 32 of the CPWD manual says that ‘an advance for plant and machinery that are required for the work and brought to site by the contractor may be given if requested by him in writing within one month of bringing them to site.’
Although the necessity of 10% simple interest was not specifically mentioned in the CPWD norms, sub-clause 4 says that ‘75% of such amount shall be paid after the plant and machinery are brought to site and balance 25% on their successful commissioning.’
A LDA official on the condition of anonymity has revealed that 10 percent of the tender value was given to K-Pro Infra Works Ltd as plant and machinery advance and after much persuasion the contractor bought 15 (fifteen) new Tipper trucks amounting to around Rs 4.5 crores were brought to the site and the rest of the advance amounting to around Rs 18 crores were recovered after about one year and six months from the bill.
But the fact remains that for more than one year the amount of Rs 22.4 crores remained at the disposal of the contractor K-Pro Infra Works Ltd for its use at will, over and above the interest free mobilisation advance of Rs 22.4 crores.
The official further clarified that, the advances were paid according to the terms and conditions laid down in the agreement between the contractor and LDA of which the Chief Minister Okram Ibobi Singh is the Chairman.
The CPWD norms were in fact amended in the agreement to facilitate the favourable advances to K-Pro Infra Works.
While the 10 percent simple interest was amended to interest free in case of mobilisation advance, the interest free advance was added in case of plant and machinery and the condition regarding payment of machinery advance after the machinery were brought to site was omitted from the tender agreement and it was replaced with ‘bank guarantee’.
The CPWD norms were again circumvented regarding the machinery advance.
Clause 6 (2) (i) and (ii) of Chapter 32 of CPWD manual says that the amount of advance shall be restricted to 5 % of tender value or 90% of the price such new plant or machinery, and 5% of the tender value or 50% of the depreciated value in case of second hand and used plant and machinery.
In the tender agreement, this norm has been amended as 10% of the tender value or 90% of the price of such new plant and machinery to facilitate the 10% machinery advance.
The LDA official further said, altogether 40 machines were used in the work out of which 19 are of LDA. The other machines were either brought by PCL or hired from private parties.
It may be recalled here that K-Pro Infra Works Private Ltd 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. PCL is founded and controlled by Congress MP from Andhra Pradesh, K Sambasiva Rao. In April, PCL was named in the list of companies in a report prepared by the Institutional Integrity Unit of the World Bank on “fraudulent and corrupt” practices by private Indian contractors working on national highway projects funded by it. In Manipur, the company has been executing the dam components of the Thoubal Multipurpose Project.