Wednesday, August 24, 2016

Full text of Former Inspector General S. M. Mushrif's report on Maharashtra Irrigation scam

Former Inspector general of police and then  deputy commissioner S.M.Mushrif had submitted a detailed report on corruption in irrigation department of Maharashtra. He had also requested his department to ask the government to give permission for an open enquiry into the affairs of MKVDC so that many more irregularities can be exposed and offences can be  registered against defaulting officers and office bearers of Maharashtra Krishna Valley Development Corporation (MKVDC).However, matter was discussed in assembly it was revealed that his report had  gone missing and then Anti-Corruption Bureau ( ACB) once again procured it from Mr.Mushrif. However, till today no action has been taken on his report.

Photo courtsey cartoonistsatish.blogspot.com

Irrigation scam started in Shive Sena BJP alliance government ( 1995 -1999) . And continued in all successive governments. The report given by Mr. Mushrif throws light on modus operandi of irrigation scammers. He has clearly mentioned names of business tycoon Avinash Bhosale and p. venku reddy. Here is full text of Mr.mushrif's report

1)Pre-qualification of contractors. 

This was just a ploy to reject the unwanted contractors. In fact, at the time of registration of contractors, their financial capability, technical manpower, machinery available (owned & hired), works of various types executed by them etc. are verified and on being fully satisfied on these counts, the contractors are registered. 

Then there is another stage, viz. enrolment of contractors, wherein based on their previous experience and categories of works executed by them, their select list is prepared for different types and scales of works. 

In view of the above two tests, there was no need to have another screening. But in MKVDC the third test i.e. pre-qualification of contractors was introduced. The contractors were not given blank tender forms unless they satisfy this condition. The lists of the prequalified contractors for a particular work were never published or displayed and rejected were informed about the reasons for rejection only after the last date of filing of the tender was over. Thus, this power was grossly misused by the senior officers of MVDVC. The favored ones were qualified even on the basis of forged document -s, and those having good reputation but not in the good books of the authorities or having no political connections were disqualified on flimsy grounds e.g. 

a) Bhom Balakwadi Project (Satara Dist.)  (estimated cost 100 crores).

One R.M.Mohite was a renowned contractor, but he was disqualified only to favour Pradhana constructions of P.Venku  Reddy of which Avinash Bhosale was also a partner But Shri Mohite filed a complaint and in verification,  the pradhana Constructions was found to have used other firm's documents as its own. It was such a serious mischief that the company should have been blacklisted but it was only disqualified for that work

b)Dhamani (Kolhapur district) (Estimated cost Rs 50 crores).

Here again, R.M.Mohite was disqualified to favor Uppar Constructions. Shri P.M.Mohite went to court and the court passed strictures against the method of prequalification. But Shri Mohite was politically pressurized to withdraw his claim to work

c)Temghar Project ( Pune District )  (Estimated cost 160 crores).

One Srinivas Company furnished forged documents for pre-qualification. They were challenged by another firm namely Progressive Company. But as Srinivas Company was a favorite of senior officers, it was not blacklisted or disqualified; but a compromise was brought about and the work was divided between the two. 

             (In this case the tender of the third company viz. National Project Constructors was not opened at all). 

d)Many contractors furnished false work-done certificates from Co-op. Sugar factories and got them prequalified But no verification was done by the MKVDC. Even the form No. 16 of income tax which mentions the tax deducted at source from the  bills and which was the sure evidence of actual work done was not insisted upon in case of favorite contractors, knowing fully well that the certificates were false or forged. 

e) One Shaktikumar Sancheti & Co. was disqualified for Jambhore project (Kolhapur), the estimated cost of which was Rs.40 crores. But as he had some political connection, he pressurized the authorities and a tender in the joint name of P.Venku Reddy and S.K.Sancheti Co. was accepted through the joint company was not prequalified. 

f)Kudal Dam project   ( 80 crores).

This work Was allotted to Pradhana Construction Co. of  Venku Reddy of which Avinash Bhosale is also a partner by  arbitrarily disqualifying other players. 

2)Manipulating publishing of tender notices,

In the first year of the MKVDC, the tender notices of the big and important works were being given in the important newspapers as required by Govt. directions. But the publishing of the notices were manipulated in a such a way that they got printed only in 10 to 15 issues of that news—paper and thus was known only to a few selected contractors who were sure to get some important work or the other in turn. As a result, other contractors remained in dark and there was no real competition and such tender of much high costs was accepted. But in a few months this secret leaked out and there were protests from other contractors. Therefore , this practice was discontinued and other methods were adopted to favor the coterie of contractors

3)Manipulation of work-completion period.

The contractor who completes the work within 70% of the period specified in the tender notice, gets 5% bonus of the tender cost. Therefore, in order to favor the contractors, much longer period than was actually required for a particular work was mentioned in the tender notice. As a result, many contractors could complete the work within 70% of the period and got the benefit of 5% bonus, which in some cases went in crores. This was naturally at the cost of the Corporation. It goes without saying that the Corporation's senior officers had fingers in this pie. 

4)Manipulation of estimates to much higher side.

Another method  to ensure the maximum  profit to favorite contractors was to raise the estimated cost of a  project very high (at times more than double) and manipulate the publishing of the tender notices in such a way that they reach only a selected few, out of which one was to be given  the work. 

The Bhama Askhed (Dist.pune)Project work, (estimated cost 38 crores) was to be allotted to P.Venku Reddy and everything was settled. But some other contractors which were not in the inner circle got this information and they  unexpectedly submitted tenders at very competitive rates. There was a tough competition and the tender of one D.G.Patil   & Co. which was 54% below the estimated cost was accepted. But even this reduced cost is said to be much higher compared  to the usual cost. 

5)Favoring some select group of contractors. 

a)Ujani canal work 83/84  km. of Solapur District (estimated cost Rs.3 crores) was given to P.Venku Reddy company without issuing any tender  notice. 

b)Km.92 Kudals canal (Satara T)ist.) (3 to 4 crores) was given to  Balaji Agency of one Sampat without issuing a tender notice. This work has not yet been regularized. 

c)The contract of Takari Pump (Sangli Dist.)Housework was allotted to Mule Brothers & Co. after accepting their tender. But the company wanted higher rates and wanted to back out. In such a case very heavy penalty is imposed on  the company concerned. But in this case contrary to the rules and the usual practice, Mule Brother's tender was withdrawn  without imposing any liability on the company. A fresh tender  notice was issued  and the tender of one progressive construction company which was acting as a proxy of Mule Brothers was accepted at much higher rate (about 3 to 4 crores). In reality, the work is being executed by Mule Brothers themselves. 

d)Tembhu Pipeline (250 to 300 crores).

Tenders were opened in line; but were taken to Mumbai under the pretext that the Secretary, Irrigation was holding the charge of the  Executive Director and without any deliberation, the decision was taken hurriedly  in a day, Avinash Bhosle acted as a go - between the Contractors on the one hand and the Corporation and the Govt. on the other. 

e)Nira - Deoghar (150 Crores).

The contract was given to a joint venture company  of which Avinash Bhosale wns a partner by disqualifying the other contractors and manipulating the tender notice only in  few issues of news-paper. 

f)Sina -Koregaon Tunnel (Solapur Dist.)

This work was also allotted to Avinash Bhosale but in somebody else's name. This can be established only by carefully  scrutinizing Avinash Bhosale's and his Company's  Income-tax records.

6)Huge Advances without observing any norms.  

Giving reasonable advances to contractors is a usual practice in some big and important projects. But in MKVDC, all norms and rules were thrown to the wind and advances were given very liberally at the interest of 22%. The contract of Wang Project (Satara Dist.) of which the estimated cost was Rs.80 crores was given to a person who was  politically very influential via Ms avalsekar of unity asian construction co. But even before a work order was issued, he was given a huge advance of Rs.13 crores. The contractor did not start the work for a year (From March97 to March 96)). nor did he return the amount. But on the other hand, he is requesting for the waiver of interest (to the tune of 3 crores) and it is learnt that the Corporation is also seriously considering his request. 

The main beneficiaries of the MKVDC are undoubtedly Shri P.Venku Reddy and Avinash Bhosale. They have virtually reaped the windfall with blessings of some big wigs in the corporation and the government. It is said that both have declared huge amount under the VDIS, but the major portion of the windfall is learnt to have been siphoned off to foreign countries by " Hawala" and other modes and both of them have acquired N.R.I status.P venku Reddy has already settled in London. He is learnt to have a luxurious flat in South London. and is planning to start a chemical factory in London. Shri Avinash Bhosale is trying to base in Dubai. He has been  frequenting Dubai under the garb of export of  readymade garments, but his long-term plan is to make a permanent base there. 

7)0ther irregularities

a)Market Missionaries Pvt.ltd.

This advertising company was engaged for the advertisement of the first two issues launched by the MKVDC, But the company was given an excess payment of 40 lakhs and nothing Was done to recover the same as the persons concerned are politically well connected. 

b)Purchase of Computers.  

The Corporation purchased computers worth Rs.2 crores. But in order to weed out other standard companies, an unreasonable condition of Works Contract Act Registration was put up and the computers were purchased from a non-descript company viz. Mechatronics , in spite of the fact that the N.I.C. had cautioned that the computers do not satisfy the specifications. 

Next year the prices of computers were reduced by 15% following the reduction in taxes, but again  the equal number of computers were purchased from the same company only, at 5% less price whereas about the same time Koyana Project had purchased computers at 15% less price

c)Purchase of Sumo vehicles.

Shri Ashok Patil, the then Chief Engineer, MKVDC purchased 50 Sumo vehicles for the Corporation in April 1996. Though the rate contract was fixed for these vehicles, Shri Patil purchased the vehicles from another trader at a price  higher than the rate-contract, thus incurring a loss- of several lakhs to the Corporation. 

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