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Financial irregularities detected in National Games

india Updated: Mar 04, 2011 16:08 IST
Madan Kumar
Madan Kumar
Hindustan Times
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Now that the 34th National Games are over, it is time to take stock of the wrongdoings committed in the run up to the mega sports event.

Beginning a fresh probe into the financial irregularities committed in holding the Games, the office of the Principal Accountant General (PAG), Jharkhand, has detected an excess payment of Rs3.29 crore to a contractor company that supplied “cheap and inferior” system for roofing three indoor stadiums at the Mega Sports Complex, Hotwar, situated in Ranchi.

Taking up the matter with the Jharkhand Government, the PAG, Rakesh Kumar Verma, through a letter, has requested the state’s vigilance secretary to probe the matter with vigilance angle.

As per the PAG’s letter, the works of providing and fixing roofing materials in three stadiums was awarded on May 31, 2006 to M/s Laing Simplex JV, Kolkata. The works included providing and fixing of 28,475 square metres (sqm) sheet cladding and roofing with ‘Kalzip 65/400’ or equivalent aluminum standing seam roofing system made from aluminum alloy in three stadiums at the rate of Rs5,068.56 per sqm.

On the request of contractor, the executive engineer, special works division, building construction department (BCD), Ranchi, on October 31, 2007, requested the main consultant- M/s Meinhardt Singapore Pte Ltd- to allow fixing of ‘Rigidal’ material in place of Kalzip materials. The consultant did not agree to the proposal on the ground that “the high thermal insulation and high sound proofing by use of E-clips makes Kalzip a much more superior and costlier system as compared to any other system of this type. Since the contractor had
quoted for Kalzip system, allowing use of cheaper Rigidal system shall amount to undue favour.”

The consultant, in its report, further stated that M/s Corus Building System (supplier of Kalzip) had already completed eight to ten projects using Kalzip in India and no project in India was completed using Rigidal system.

After the expiry of consultancy agreement with M/s Meinhardt in November 2007, the Chief Engineer, BCD, ordered for use of Rigidal system on the plea that it was technically equivalent to Kalzip.

“In this regard, opinion of the main consultant was that the ‘Rigidal is not equivalent to Kalzip since Rigidal does not have Kalzip’s thermal and acoustic properties.’ Accordingly, the contractor executed 29,638.64 sqm of Rigidal system and was paid at the rate of Rs5068.56 per sqm, which was applicable for Kalzip. Though the contractor was allowed to use cheaper Rigidal system, the department did not ask the contractor for any reduction in price for use of cheaper substitute. Contrary, the Corus had quoted a rate of Rs3,600 per sqm for supply and installation of Kalzip,” the PAG has pointed out in his letter to the vigilance secretary. HT has a copy of the PAG’s confidential letter.

A team from PAG office, which conducted audit of the special works division, also didn’t find any justification for allowing use of Rigidal in place of Kalzip materials, which were to be fixed as per the contract agreement, the letter reads. Moreover, the BCD didn’t supply the copy of invoices from supplier of Rigidal to audit team.

“Agreeing for use of cheaper Rigidal system in violation of contract agreement without any reduction in price and non-supply of relevant documents to audit team are indicative of prima facie fraud and corruption. The entire issue merits investigation by vigilance department,” the PAG has said.

The PAG Verma could not be contacted for his comment. While a vigilance department official, who didn't want to be quoted, said, they have forwarded the PAG’s report to the state government for seeking direction.