From record to ruin

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  • Published 5.05.13

May 4: A contentious delay-beater clause in India’s largest private-public partnership project and an April 16 media conference by railway minister Pawan Bansal are stoking unusual interest in Maharashtra.

Bansal had discomfited Maharashtra’s Congress-led government last month by publicly endorsing the project for the state mooted by Mahesh Kumar, an official known for executing a project at “Guinness-grade” pace and now accused of bribing the railway minister’s nephew Vijay Singla for a coveted post, state government sources said in Mumbai today.

CBI officials have not connected Bansal to the bribery scandal, which last night led the agency to arrest Singla and railway board member (staff) Kumar, who had allegedly struck a Rs 10-crore deal for the “more lucrative” post of member (electrical).

Kumar was suspended tonight, PTI reported.

Maharashtra government sources said that Bansal had “not entirely correctly” told a news conference in Mumbai on April 16 that the state and the railways had agreed on a Rs 19,500-crore project planned by Kumar, then general manager of Western Railway.

It was “the Oval Maidan-Churchgate-Virar elevated/underground line in Mumbai”, an official said. The project was to be India’s largest public-private partnership (PPP) so far.

“But Bansal’s claim was not completely true. The state had given an in-principle nod but had asked for modifications on a crucial issue. It was not fair on the minister’s part to suddenly go ahead and claim an agreement had been reached,” a source said, drawing a distinction between “in-principle” agreement and concurrence.

The “modifications” sought by Maharashtra related to a clause in the state support agreement (SSA) allowing the private partner to claim compensation from the railways for any delay caused by administrative factors controlled by the state government, the source said.

“The railways could, in turn, claim this money from the state. The whole thing was Kumar’s brainchild,” the source added without explaining why the state government opposed such a clause that could have helped meet deadlines. Delays blamed on state governments, including that in Bengal, have held up railway projects in the country.

Following Bansal’s statement, the Maharashtra government decided to act tough and “the talks between Western Railway and us broke down”, according to the source, who said he had been part of the negotiations.

“A peeved Kumar sent the SSA to the railway board and the Planning Commission for advice,” he added. Congress sources in Mumbai said the incident created tension between Bansal and some Maharashtra government leaders.

Sources said Kumar was a “brilliant officer” and had made it to Guinness World Records for commissioning the world’s “largest route relay interlocking” at Old Delhi station in just 36 hours.

‘Plum’ posts

A 1975-batch signals and telecommunications service officer, Kumar still has two years to retire. Despite becoming a member (staff) on the railway board, he was bargaining to become member (electrical) and also hold on to his job as Western Railway GM as an additional charge —something allowed by the rulebook — CBI sources said.

Over the next five years, the railway board will handle at least Rs 1 lakh crore worth of PPP contracts alone, and its member (electrical) and member (mechanical) would be dealing with “60 to 70 per cent” of these, railway sources said.

“The bribe deal for the job of member (electrical) was Rs 10 crore,” a CBI source said in Mumbai. “But the post would have fallen vacant only in July, and Kumar did not want to take a chance — so he grabbed the available post of member (staff).”

Kumar was in a hurry to become a board member because that would have made him eligible to have a go at the board’s chairmanship before retirement, a senior railway official said.

“Even the post of member (staff) would put him in charge of money-spinning departments like personnel, the Railway Protection Force, vigilance, recruitment and medical where more or less every job is up for sale,” the railway official said.

The additional charge of Western Railway would have given Kumar control over several multi-crore infrastructure projects in the region, especially Mumbai, which is overhauling its public transport.

The Mumbai CBI source said Singla’s friend Sandeep Goyal, who too has been arrested, asked Kumar to pay Rs 2 crore now for the current post and another Rs 8 crore after he became member (electrical).

“As the first instalment, after his appointment as member (staff) on Thursday, Kumar sent Rs 90 lakh to Singla last night, leading to the arrests,” the CBI source said.

Officials had said yesterday that Kumar had superseded two seniors to the post of member (staff) but a railway ministry statement today denied this.

Dramatis personae

Delhi CBI sources claimed that “several businessmen doing business with the railways” had pitched in to arrange the Rs 90-lakh bribe money for Kumar with an eye on future gain. The sources claimed that most of it was arranged by Narayana Rao Manjunath, managing director of G.G. Tronics India Pvt Ltd in Bangalore. Manjunath could not be contacted for his response because he has been arrested.

Manjunath allegedly got an “acquaintance”, Rahul Yadav, to send two couriers — Dharmendra Kumar and Vivek Kumar — to Chandigarh to pay off Singla and Goyal. All four were caught “red-handed”, CBI officials said.

A Delhi CBI court remanded the four to four days’ CBI custody after the agency said it wanted “to confront Singla with Kumar to find out who would have been the ultimate beneficiary” of the bribe, sources said.

Kumar and Manjunath have been arrested and were being brought to Delhi from Mumbai and Bangalore, respectively. Of the eight named in the FIR (see chart), the agency sleuths did not reveal the roles or professions of Yadav, Ajay Garg, Samir Sandhir or Sushil Daga.

‘Most corrupt’

For several years now, the Central Vigilance Commission has marked the railways as the country’s most corrupt government organisation. The Congress had taken full charge of the railways after 17 years in September last year after the Trinamul Congress left the UPA. In between, the key ministry has largely been under the control of regional parties.

The commission’s latest annual report counts 8,805 corruption complaints against railway employees, followed by 8,430 against bank employees and 5,026 against income-tax officials. Ironically, Kumar headed Western Railway’s vigilance department as its general manager.

With the railways placing more orders in a bid to expand, all railway board berths appear to have become more “lucrative”, railway officials say. The board takes all investment decisions relating to the rail budget.

“The bulk of the projects would need a final clearance from the member (electrical) or member (mechanical). With the entry of global players, the terms of a tender could be tailored to suit a particular party though there are adequate checks and balances,” former railway board chairman J.P. Batra said.

The board has seven members: the chairman, a finance commissioner and five members each looking after one department: mechanical, traffic, engineering, electrical and staff. Each member reports directly to the railway minister.

“Interested parties often try to see someone who they feel is inclined towards them placed in a position of power, and lobby for his promotion or transfer,” said former railway board member R.C. Acharya.