Rs 1,590 Crore Siphoned Off In Soil Embankment Works

This is yet another corrupt chapter in Polavaram project. Chandrababu Naidu jacked up the estimated costs of Polavaram Earth-Cum-Rock-Fill (ECRF) Dam soil embankment work by three times from Rs. 809.53 crore to over Rs. 2,400 crore. Then the contract was awarded to Ratna Infrastructure. This company belongs to M.M.L. Narasimha Rao, who is a close confidant of the Water Resources Minister Devineni Umamaheswara Rao.

Interestingly, the work was given on a nomination basis purely based on Chandrababu's oral orders. The entire handing over of the project took place without the approval of either the Polavaram Project Authority (PPA) or the Water Resources Department or the Finance Department. Here are some interesting facts about this contract.

■ According to the 2015-16 costs, the costs of Earth- Cum-Rock-Fill (ECRF) Dam were estimated at Rs. 1,417.73 crore, out of which Rs. 608.2 crore was spent and Rs. 809.53 crore yet to be spent. However, at this point in time, the costs were jacked up thrice times to Rs. 2,400 crore. The Chief Minister and the Water Resources Minister were the principal beneficiaries.

■ As the ECRF Dam yet not completed, Chandrababu Naidu tried hard to cover up this failure by announcing the completion of the Dam works right after the completion of the work of the diaphragm wall, which forms the foundation for ECRF Dam. The CM has unveiled a huge pylon to celebrate this occasion.

■ With the handing over of ECRF Dam works to Ratna Infrastructure, all the works of Polavaram Head Works were given to sub-contractors. The principal contractor of Head Works Transstroy thus confined itself to the role of a commission agent.

Huge Kickbacks

The ECRF Dam stores the water of Polavaram project. Once water levels reach 194.6 TMCs, the excess water would be diverted into the river through the spillway. Two cofferdams have to be built in order to construct the ECRF in three parts- 564 metre-long Gap 1, 1750 metre-long Gap 2 and 140 metre-long Gap 3- and divert the Godavari flow through the spillway. While one cofferdam of 2,050-meter length should be built on the upper side, another cofferdam of 1,417-metre length would be built on the downside of the dam.

According to the 2015-16 prices, the value of these works was Rs. 1,417.73 crore. Already an amount of Rs. 462.2 crore has been spent on construction of the ECRF foundation wall. Another Rs. 146 crore bills were claimed for cofferdam foundation construction (jet grouting works). This means a total of Rs. 608.2 crore was spent on foundation work alone. The Chief Minister pocketed kickbacks from L&T-Bauer (foundation wall work) and Keller (for coffer dam- related works). At this rate, the costs of ECRF Dam, cofferdam works amounts to only Rs. 809.53 crore. However, the cost estimates were increased three-fold to over Rs. 2,400 crore.

L&T, Shapoorji Pallonji Out

At first, the Chief Minister had decided to award the ECRF works to L&T on nomination basis. However, as the kickbacks couldn't be agreed upon with L&T, Transstroy brought in another sub-contractor Shapoorji Pallonji into the picture. Meanwhile, the Water Resources Minister Devineni Umamaheswara Rao interfered and sought the contract for Ratna Infrastructure, a construction company owned by his friend M.M.L. Narasimha Rao. The minister could successfully get the contract awarded to Ratna Infrastructure once the commission percentage was settled.

According to the rules outlined in the PPA gazette notification, contractors cannot be awarded works on nomination basis without permission from the authority. Chandrababu was well aware of this rule as the Water Resources Department officials informed him of the PPA rule in a meeting. Despite having the full knowledge, Chandrababu Naidu insisted on handing over the contract to Ratna Infrastructure on nomination basis on LumpSum (LS)-open method. Though the CM was aware that the LS-open method would empower the contractors to keep on submitting bills for additional amounts and government would be liable to pay them, he pushed for this new arrangement only for huge kickbacks.

Source: Emperor of Corruption

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