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IL&FS faces plea alleging unfair deal

HT Correspondent, Hindustan Times  New Delhi, December 13, 2012
First Published: 21:38 IST(13/12/2012) | Last Updated: 22:30 IST(13/12/2012)

Infrastructure Leasing and Financial Services Limited (IL&FS), which has interests in finance, construction and education, is facing accusations of unfairly helping its own subsidiary win a state government contract in road building while playing the role of an advisor to the Jharkhand government.


According to a public interest litigation (PIL) filed recently with the Jharkhand High Court, the the state government awarded a contract to IL&FS's subsidiary, Jharkhand Road Projects Implementation Company Limited (JRPICL), causing a Rs. 500-crore loss to the state exchequer. The court  has admitted the plea and sought firm's response, a spokesperson for the petitioner said.

Lohardaga Educational & Cultural Society, an NGO that filed the PIL, alleged that the contract was awarded despite a possible conflict of interest without transparent bidding. A PIL copy is available with HT.

"IL&FS was the advisor to the Jharkhand government for the tendering process and has allegedly used its position for nomination of own subsidiary company for the project instead of going in for transparent bidding," said Manoj Kumar, managing partner of corporate law firm Hammurabi and Solomon who represents the petititioner.

However, IL&FS has denied the charge. It said there was no violation of any guideline and the process of contract award was based on transparent procedures. "All processes have been followed in a transparent manner," a company spokesperson said.

The Jharkhand government is developing 1500 km of roads in the state under the Jharkhand Accelerated Road Development Programme under public-private partnership with IL&FS. A programme development agreement was executed between the state government and the firm for JARDP implementation in February 2008.

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