The firm connived with government officials to present an inflated bill and gained Rs113 crore in a contract of Rs350 crore, the CBI said.
The CBI is looking into the role of Mumbai’s leading construction company Shapoorji Pallonji & Co Limited (SPCL) in connection with financial irregularities dogging the Commonwealth Games 2010.
The 140-year-old company bagged the contract to build a state-of-the-art membrane roof at the main games venue, Jawaharlal Nehru Stadium Complex, for Rs350 crore. “We have found that the contractor, SPCL, gained about Rs113 crore in a contract of Rs350 crore,” an investigating officer from the CBI said. “The firm connived with Central Public Works Department (CPWD) officials and presented an inflated bill of imported membrane and other items.”
Also, the selection was arbitrary, the officer said. “Initially, the firm [SPCL] did not meet the eligibility criteria,” he said. Though three firms met the criteria, the selection process was cancelled. Rules were relaxed and a fresh selection
organised, in which SPCL, along with
the other three firms, qualified. It clearly shows that CPWD officials favoured SPCL.”
The VK Shunglu committee, appointed by prime minister Manmohan Singh to investigate the expenditure on CWG, had first drawn attention to irregularities in the process of awarding the contract to Shapoorji Pallonji.
In its fourth report, the committee said: For the state-of-the-art membrane roof, “though the contract was in the nature of a ‘lump sum’ contract, item rate benefits were given to the contractor. The contractor [SPCL] charged an amount much higher than the procurement price for the imported membrane and fully locked cables”.
The DNA emailed a questionnaire in this regard to the SPCL. But the company did not respond.
The CBI has found that government officials had justified the inflated rates SPCL charged. “Though the estimated rate of cable was Rs5.44 lakh a metre, government officials accepted the consultant’s unexplained revision of the rate to Rs9.90 lakh a metre,” the officer said. “The cost of imported membrane was inflated to Rs16.49 crore. It was wrongful admission of ‘cost escalation’ in a ‘lump sum’ contract that resulted in an undue gain of Rs29.70 crore for the firm. In all, the SPCL gained about Rs113 crore.”
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