'DNA' Investigations, Part 4: Four who took DVC to cleaners

Serious questions have been raised about the role of power minister Sushilkumar Shinde in giving three IAS officers posted with the Damodar Valley Corporation (DVC) a free hand from 2006 to 2009, a period in which serious irregularities took place in the awarding of several contracts.

The DVC, which made a profit of about Rs1,000 crore in 2006, is now in the doldrums. In 2011-12, this public-sector unit (PSU) has suffered a loss of nearly Rs300 crore so far, said a source in the company’s finance department.

The three officers in question are AK Barman, former chairman, DVC; Subrata Biswas, former secretary and then chairman, DVC, now principal secretary, animal husbandry department, government of Kerala; and Gautam Chatterjee, former chief vigilance officer (CVO), DVC, and now vice-president and CEO, Maharashtra Housing and Area Development Authority (Mhada).

During the tenure of these officers with DVC, from 2006 to 2009, the PSU awarded 2,000 contracts on a single-tender/nomination basis, flouting CVC guidelines of competitive bidding. A single-tender/nomination basis tender involves inviting a quote from a single supplier and awarding the contract without competition. Such a procedure can be used only when work needs to be done immediately, i.e. in cases of natural calamity.

DVC officials say the contracts were cumulatively worth over Rs10,000 crore. A senior DVC official, who wished to remain anonymous, claimed that at least 20% of this went into commissions and kickbacks.

Documents with DNA suggest that the contracts in question were not brought before the board for vetting. Documents also highlight that the officers concerned did not submit to the DVC board quarterly reports relating to the tenders awarded.

There were lapses and irregularities at many levels. For instance, DNA has a copy of the confidential letter written by Dy CVO A Malik, where he says Barman and Biswas awarded some contracts related to the Durgapur TPS and Mejia TPS projects (meant for the CWG Games) on a single-tender basis.

The senior DVC official quoted above told DNA: “Barman, along with Biswas, gave contracts according to their wishes. The CVO who should have intervened turned a blind eye despite several complaints filed before him.”

The irregularities at DVC did not go unnoticed, but no action was taken. An October 2008 letter from MP Gurudas Kamat, who then chaired the parliamentary standing committee on energy, to prime minister Manmohan Singh, said: “The DVC was an undertaking with huge profits and sadly during the tenure of Sri AK Barman has been reduced to an organisation with cash losses of hundreds of crores per month.”

The letter directly blames Barman: “The root cause of the problem is obviously the manner in which Sri Barman has been going on sanctioning project works to the contractors at the total disadvantage of the DVC.

Parties have been awarded contracts as being lowest one (sic) have been terminated and parties which have not even bid for the tender like BHEL have been called and given the contract at a much higher value than the one whose offer is rejected on the ground of higher value. This is indeed very shocking and the modus operandi seems to be to offer such contracts to BHEL, which in turn subcontracts to private contractors who are pre-decided. “DNA has a copy of this letter.

The power ministry not only ignored this letter and similar letters by several MPs against Barman, but also pushed for an extension of his tenure by 2-3 years. Barman was scheduled to retire in November 2008. Shinde wrote to the PM praising Barman and seeking an extension for him. The letter, of which DNA has a copy, said: “During the past two years, DVC has been making unprecedented efforts in the area of capacity addition and other developmental programmes. I have noticed that the present Chairman, DVC has been quite dynamic …”

However, the CVC intervened and directed the power ministry not to grant Barman an extension. The CVC’s letter, of which also DNA has a copy, concluded that Barman was involved in some corruption cases and was under investigation.

The CVC’s intervention and the letters by other MPs worked and Barman was forced to retire as scheduled.

Following this, Shinde pushed DVC secretary Biswas’s case for the post of DVC chairman. In an internal ministry note dated August 4, 2009, written to the power secretary, Shinde recommended Biswas and said: “...especially as the officer belongs to the SC category and has the added advantage of having worked in DVC. The name of Sri S Biswas should be recommended to the ACC for appointment as chairman of DVC.”

Shinde went ahead and appointed Biswas as chairman on October 14, 2009, without the mandatory vigilance clearance. The CVC took note of this. A confidential letter dated October 20, written by KS Ramasubban, CVC secretary, to power secretary HS Brahma, said: “On 25th April 2009, your ministry sought vigilance clearance in respect of Subrata Biswas as he was considered for the post of Chairman, DVC. The commission requested the ministry to furnish the bio-data of the officer giving information in respect of the officers for the preceding 10 years.”

The letter questioned Biswas’s appointment as DVC chairman, saying he had attracted disciplinary action in three cases. It said: “It is now understood that Biswas has already been appointed as Chairman of DVC after obtaining the approval of the Appointments Committee of the Cabinet. It is not understood how the ministry processed his appointment without vigilance clearance from the commission. It is for your further information that in a case arising out of the CTE examination of some works in DVC, the commission has advised disciplinary action against Biswas. In two more cases, the role of Biswas has been found to attract disciplinary action.”

This issue was brought to the notice of the PM in December 2009, an RTI reply revealed. However, no action was taken. Biswas continued as DVC chairman for the next nine months. DNA has copies of several letters written to the PMO for Biswas’s removal, but to no avail.

A source in the power ministry, who wished to remain anonymous, said: “It is an open secret that Shinde was supporting Biswas. This may be the reason why action wasn’t taken against him.” This brings DVC CVO Gautam Chatterjee into the picture. When DVC officials awarded tenders in violation of CVC guidelines and other contract rules, why did the CVO, whose role is to prevent such irregularities, turn a blind eye?

Not only that, he exceeded his brief as CVO. As reported in the second part of this series, Chatterjee got involved in the process of granting RInfra a tender in violation of CVC guidelines that emphasise CVOs must stay away from decisions like works or procurement that have financial implications.

The rules say no CVO of the rank of additional secretary can be posted in any PSU. Yet, Chatterjee, who joined DVC as joint secretary and was promoted to additional secretary while with the PSU, stayed on for about four months. Several MPs wrote letters against his continuance as CVO. When this was brought before Jairam Ramesh, then minister of state for power, and the CVC, Chatterjee was repatriated to his parent cadre (Maharashtra) in June 2008.

When DNA sought Barman’s comments on the matter, he denied working against DVC’s interests. “I left the organisation three years back. All the allegations against me are false. All the rules were followed properly and everything was done in the interest of DVC,” he said.

When DNA asked Biswas for his comments on allegations that he was party to contracts given on single-tender basis, he said: “I am not interested in commenting.”