Irregular & massive cost escalation visible in Siolim jetty documents

A Jetty project on the banks of River Chapora, permanently stayed by National Green Tribunal for want of an EIA, was in the midst of controversy during the just-concluded Assembly election. However, not only did it not have an EIA, documents availed under Right to Information Act reveal that the project was full of illegalities even before it began. In a three-part series Herald will unearth how the high and mighty flout rules to have their way

PANJIM: The jetty, which was stayed by NGT, on the troubled waters of River Chapora, has been in the midst of controversy for over a year now. Herald has now laid hands on documents which prove the project was a multi-crore scam by the previous government.

The papers also prove how the actual cost of the project was rigged and how some bureaucrats danced to the tunes of politicians, while at least one honest officer raised serious questions

Documents reveal that the project cost was over Rs 8 crore as per estimates but was awarded for nearly Rs 13 crore with a justification of “harsh conditions” and “justifiable amount”. The observations made by the top bureaucrat in this regard were also overruled by the Finance Department.

What is shocking was that there were only two bidders of the online tender, when according to rules there have to be a minimum of three.

The pet project of then Water Resources Minister Dayanand Mandrekar, the project was initiated in February 2015 following a small note by the minister and the officials swung into action immediately.

Within a few months the government floated an e-tender for beautification of Chapora Riverfront on May 27, 2015. The amount on the e-tender was Rs 8,77,66,688.

ONLY 2 TENDERS ACCEPTED, AGAINST A RULE OF A MINIMUM OF 3

Only two companies purchased the tender documents and submitted their bids online, which were opened on August 6, 2015. Both these companies quotes well over the estimated amount as well as the already enhanced so called “justified” amount.

Bagkiya: 24% above estimated amount and 5% above justified amount quoted

Bagkiya Constructions Pvt Ltd quoted the lowest at Rs 10,87,29,366.50 which works out to 23.90 percent above the estimated amount and 4.95per cent above the “justified amount” of Rs 10,36,01,111.53.

Southeast Construction Co Pvt Ltd : 29% above estimated amount &9% above justified amount quoted

Southeast Construction Co Pvt Ltd submitted a bid of Rs 11,26,62,518.50, which was 28.27 percent above the estimated cost and 8.65 percent above the “justifiable amount”.

A note by the office of Chief Engineer said, “The powers of acceptance of this tender falls within the purview of the Chief Engineer in terms of Sl. NO 15 of Appendix I of CPWD Manual, 2007.”

Documents reveal that not only the lowest bidder’s amount was higher by 23.9 percent but additional costs also added to it.

RITES Charges @ 1.10 percent (Rs 11,90,023) Service Tax 12.36 percent on consultancy fees including educational cess (Rs 1,47,828.44), 3 percent contingency (Rs 32,61,880.99)  and 7.25 per cent centage charges (Rs 82,16,794.66).

The total cost of project was rounded up at about Rs 12.15 cr (Rs 12,15,51,900.00, almost 47 percent above the estimated amount of the department which was Rs 8.77cr (Rs 8,77,66,688)

Importantly Principal Secretary R K Srivastava objected to this cost escalation.

He wrote on file (in possession of Herald):

Then Principal Secretary WRD Srivastava asks: “Why 15 percent adhoc increase has been included in the estimate. Is it a general practice or governed by some government instructions and if so whether Finance Department has concurred it?”

Chief Engineer Sandeep Nadkarni replies: “The increase of 15 percent on GSR for five types of irrigation and hydraulic works (jetties, sluice gates, bandharas, weirs, bunds) was issued right from start of first GSR in Goa. It is due to the reluctance in working in harsh conditions.”

(Observation: The term “harsh conditions’ would make it appear that Goa was Jammu and Kashmir or North East. 

Srivastava not satisfied with justification. Asks again on file: Srivastava then asked the Finance department (FD) to examine. “Well FD may also see if year 2004 was on observation as far as GSR was concerned that necessitated a cost correction by allowing 15 percent over and above S.O.R or which became a norm as such in subsequent years by default. FD may examine this and advise before Administrative Approval is considered. 

Finance Department replies that in the past, cost escalation approvals have not been taken from them. “In this context it is stated that it doesn’t appear that Finance Department concurrence was obtained for this aspect in the past while issuing several circulars either by PWD or WRD.

The practice of enhancement of estimated cost for works related to jetties, sluice-gates, bandharas, weirs, bunds and ramps is continuing for many years and record in file indicates that in 2005 this adhoc increase was provided over and above estimated cost under GSR-2004. The adhoc increase at 10 per cent and 15 per cent is since continued over and above GSR revised from time to time.

Since it has been a continued practice being adopted to provide 15 percent or 10 percent above adhoc increase, FD may not have objection to this aspect, the noting stated. 

Further it is suggested that certain specialised works of WRD specific scheduled of rates may be prepared,” the FD noting said.

Thus it’s clear that inspite of concerns raised by RK Srivastava, who also served as Chief Secretary of the State, the Finance Department justified the huge cost over run on the pretext of past precedence.

But this isn’t the only irregularity in the project. Watch this space for the second & third part of our investigative series.