Accused of "favouring" a private firm, the public health department of municipal corporation even split the nearly 15-km pipeline project in four parts to facilitate an undue profit of additional Rs. 70 lakh to the Vadodara company.
The project pertained to laying of 600-mm mild steel pipe for supplying water from the Sector 39 waterworks to Chandimandir cantonment. The matter came to light after an audit report of accountant general, Chandigarh, was released recently.
The report questioned as to what made the department split the work and then allot all parts to Spun Pipe Construction Company.
The audit report also questioned why the public health department floated detailed notice inviting tenders for Rs. 9,340 per metre when the agency had quoted Rs. 8,030 per metre as cost of the project. All this led to alleged transfer of Rs. 70 lakh more to the company.
BJP councillor Saurabh Joshi, who raised the issue in the MC House, alleged that the company had charged VAT and excise duty twice over at the rate of 4%, and thus derived additional benefit of Rs. 574.6 per metre. This excess payment works out to be around Rs. 66 lakh, further scaling up the scam.
He further wondered why tenders for part four of the project was recalled after Spun Pipe and Construction submitted a blank price bid. He claimed that it was a clear case of extending benefits to the firm.
Joshi even sought a reply from the department on the project after Hindustan Times report on February 23. It was then that the public health department revealed that the rate for laying the pipe was presumed to be Rs. 9,340 per metre in the detailed notice inviting tenders.
Earlier, Hindustan Times had reported that the public health department had allegedly prepared "inflated" detailed notice inviting tenders to favour the private firm to tune of Rs. 3 crore in respect of the project.
MC vigilance officer Lalit Siwach, who is conducting a probe since May, is yet to submit a report on the scam.
The report revealed that the department hypothetically worked out the price of Rs. 58 per kg for 6mm mild steel sheet to be used for the pipe, though it was Rs. 34 per kg as per Steel Authority of India Limited (SAIL) rates prevailing at that time.
In 2008, Military Engineering Service had requested the MC to prepare an estimate for supply of additional three million gallon water daily to Chandimandir from Kajauli waterworks. The MC prepared the report on the project, which entailed an expenditure of Rs. 40 crore. Though the work began in 2009, it is yet to be completed.