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LATEST NEWS UPDATES | Appropriate action will be taken on highway scam after NHAI ascertain facts: CP Joshi

Appropriate action will be taken on highway scam after NHAI ascertain facts: CP Joshi

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published Published on Apr 4, 2012   modified Modified on Apr 4, 2012
-The Economic Times
 
At a time when the highway sector is showing signs of revival, a fresh controversy has come to haunt the road transport and highways ministry, with World Bank demanding a probe into "fraudulent and corrupt" practices by Indian contractors working on highway projects funded by the Bank.

World Bank's Institutional Integrity Unit has sent a detailed report to the Department of Economic Affairs under the finance ministry, which has in turn been forwarded to the Ministry of Road Transport and Highways.

The report, dated March 1, 2012, says contractors paid bribes and gifts, including gold coins, to "influence the actions" of officials and consultants of the National Highways Authority of India (NHAI), the prime implementing agency for highway construction in India.

The report was forwarded to Road Transport secretary AK Upadhyay on March 19 and has been under process. On the defensive after the World Bank report was reported by a national daily on Tuesday, minister CP Joshi said that his ministry would find the guilty officials and punish them.

"We don't want to hide anything. We have received the letter on March 19 and have now forwarded it to NHAI to ascertain facts after which appropriate action will be taken."

Joshi tried to extricate himself from the controversy by lobbing the ball to his predecessor TR Baalu's court by subtly mentioning that the period mentioned in the report was 2005-08.

When pointed out that both the contractors mentioned in the report - Progressive Construction Ltd (PCL) and PCL-MVR JV - had been declared non-performers but that ban was lifted in March 2011, during Joshi's time, the minister said, "please don't put words in my mouth. There is no intention to hide anything. We will find the details and come back to you."

The report, prepared by Christina Ashton-Lewis, regional team leader (South Asia) of the Institutional Integrity Unit, has put a question mark on the conduct of both the contractors involved in World Bank-funded Lucknow-Muzaffarpur National Highway project, the Grand Trunk Road Improvement Project and packages of National Highway Development Project.

The report is scathing in its criticism about working style of the contractors. It says that contractors spent 9.88 lakh on booking hotels and purchasing expensive gifts, including gold coins, for NHAI officials. It also says there were cash disbursements to the tune of 30.82 lakh with the aim of "influencing actions" of NHAI officials.

BJP hit out at the government and demanded a probe. Referring to the 'shocking revelations' made in the World Bank's Institutional Integrity Unit report, BJP spokesman Rajiv Pratap Rudy said, "This appears to be a big scam running into lakhs of crores of rupees.

The report points out that there is huge corruption in the National Highways Authority of India, especially by contractors who have engaged in fraudulent and corrupt practices. We demand the matter should be thoroughly investigated and the corruption exposed." "Even the funds meant for equipment are diverted to other projects," Rudy said.

The Economic Times, 4 April, 2012, http://economictimes.indiatimes.com/news/economy/infrastructure/appropriate-action-will-be-taken-on-highway-scam-after-nhai-ascertain-facts-cp-joshi/articleshow/1252


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