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Calcutta, March 3: Mackintosh Burn, the 179-year-old company that built the VIP Road flyover, was nominated by the Left Front government to do the job after an auction threw up rates the administration found too high.
Companies can be nominated for such tasks if the government holds majority stake, according to an official in the state government. The Bengal government did not strictly hold a majority stake in Burn when the job was assigned — the state took control officially in 2010 or around two years after the contract was given.
Nilmani Dhar, the then managing director of Burn, said the contract was given by a government order after the finance department gave its concurrence.
“The government asked us to do the project at cost since the bid price was too high. Since it was like a government company, we did the job, like we had done many times before,” Dhar said tonight. He said Burn had to incur some losses but it did not cut corners.
The contract was awarded in 2008. In December 2010, the state government acquired around 2.5 per cent of shares from a workers’ co-operative and became the majority shareholder with a 51.5 per cent stake.
Dhar, who was on deputation from the PWD, was Burn’s managing director for 12 years. He quit the firm shortly after the government became the majority shareholder.
A senior bureaucrat said few officials were aware that Burn was technically not a state firm because the state did not own 51 per cent of the shares till 2010. But the public enterprises department used to control the company and the state nominated most of the board members by dint of being the single largest shareholder with 49 per cent.
S. Banerjee, the current general manager at Burn, said the process was lawful then. “The company had got the project from the erstwhile government on negotiation basis, which was lawful then. Then finance secretary Samar Ghosh and minister Asok Bhattacharya were happy with the flyover work we had successfully completed in Siliguri on SF Road,” Banerjee said.
The public enterprises department initiated the process of making Burn a government-majority firm in late 2009 and the process was completed in late 2010.
The state government persuaded the workers’ co-operative to sell 22 shares for Rs 1 crore, valuing each share at Rs 4.5 lakh.
The state had to face legal hurdles from some private shareholders who moved the Company Law Board and Calcutta High Court. In both cases, the state won.
Corporate circles said city-based industrialist Mahendra Kumar Jalan controlled around 28 per cent stake in Burn after he bought out two original shareholders belonging to old Bengali families in the middle of 2011. Mayank Jalan, the son of M.K. Jalan, declined comment.
Sources said that though the Jalans bought the shares, these were yet to be registered in their name. Technically, the Jalans have no board berth or say in the day-to-day affairs of the company.
In December 2011, Burn set up a three-member panel to investigate reports of the flyover’s declining structural helth. But the probe was confined to some of the piers — the pillars that support the slabs — and they were found “sound”.
It is not clear if the area inspected in 2011 covered the stretch that was affected this morning. A preliminary inspection today suggested the piers were intact.
General manager Banerjee said: “Minister Firhad Hakim had set up this investigation committee.”
The members of the inspection panel were Sanjay Ray, department director, design circle, CMDA; S. Saraswati, professor, construction engineering department, Jadavpur University; and Subhashish Sen, associate, Bengal CES Infratech Pvt Ltd.
The panel’s report said: “The scope of the present investigation was restricted to the inspection of piers marked LR7/RR6, LR6/RR5, LR5/RR4 and LR4/RR3. Since apprehension was expressed regarding the safety of these piers, members led thorough visual inspection of the above mentioned piers. Besides visual inspection, the surfaces of the piers were struck lightly with hammers to identify delamination (cracks) of concrete, if any. In addition, presence of cracks was closely searched after spraying water to the pier surface to inspect in wet condition.”
Minor surface hairline cracks were spotted at one or two locations. The committee concluded that “the inspected piers are in sound condition”.
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