BJP MP Ajay Sancheti's company in irrigation row | mumbai | Hindustan Times
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BJP MP Ajay Sancheti's company in irrigation row

Even as the political drama over alleged corruption in Maharashtra’s irrigation sector wound down, more information has come to light of how a govt rule, which says one firm cannot get more than three contracts at a time, was ignored to the benefit of a handful of contractors. Ketaki Ghoge reports.

mumbai Updated: Oct 01, 2012 10:15 IST
Ketaki Ghoge

Even as the political drama over alleged corruption in Maharashtra’s irrigation sector wound down, more information has come to light of how a government rule, which says one firm cannot get more than three contracts at a time, was ignored to the benefit of a handful of contractors.

Among those that benefited was a firm of the BJP MP Ajay Sancheti, a close aide of the party’s national president Nitin Gadkari. Mr. Sancheti, however, denies any irregularities and says his firm got contracts according to the rules.

In 2005, Mr Ajay Sancheti’s firm, Shaktikumar M Sancheti Ltd, changed its name to SMS Infrastructure Ltd and got a fresh certificate of incorporation. In 2006, the firm informed the Vidarbha Irrigation Develop-ment Corporation about the name change. But it now appears the two firms continued to operate at the same time.

During 2006-09, SMS Infrastructure, in a joint venture with D Thakkar Co Private Ltd., and Shaktikumar M Sancheti Ltd., in a joint venture with SN Thakkar Construction Company, between them bagged seven contracts including some for Gosikhurd, the biggest project in Vidarbha.

This was done despite the government resolution restricting a firm to three projects at a time. The Public Works Depar-tment had also in 1998 issued a GR that lays down norms for sharing of resources by different firms.

Sancheti, who is vice-chairman of SMS Infrastructure Ltd, denied any irregularities and claimed his company got every work order as per procedures.

SMS Infrastructure did not respond to our detailed questionnaire emailed to them. There was also no response to our repeated calls.

In 2008, when Ajit Pawar was irrigation minister, the VIDC had relaxed the three-contract limit on grounds that under the PM’s relief package more funds were made available to Vidarbha and many projects were taken up.

In the Konkan Irrigation Development Corportion (KIDC), the PWD’s 1998 rule on sharing resources was the one that was ignored. Consider this.

FA Constructions has bagged seven projects being implemented by the KIDC. Its sister concern, FA Enterprises set up in 2006, has already bagged four projects – Balganga, Kalu, Kondhane and Susari. Both companies, owned by the influential Khatri family, share three promoters, the same address and more than half the staff. The two firms have competed for several contracts while sharing the same pool of financial and technical resources. To our persistent queries, FA Enterprises in an email said: “This matter is presently under purview of High Court (public interest litigation) hence it is not fair to comment.”

The spokesperson for the firm, however, said that both FA Constructions and FA Enterprises were registered as Class 1-A contractors with the PWD and were known in the industry for “quality of work and completing assigned job much before designated time.”

In their defence, KIDC officials said PWD’s 1998 GR allowed transfer of general work experience and annual turnover from one firm to another depending on stake of retired partner. But, both firms cannot utilise this stake as has been done in Konkan.

Officials handed out an undated retirement deed filed by FA Enterprises, saying three of the partners – Fateh Mohd Khatri, Nissar Khatri and Mrs Jaitoon F M Khatri - have retired from the parent partnership firm, FA Constructions, in 2006. And their stake in the parent company amounting to 80% had been transferred to FA Enterprises.

The GR allows for such transfer if a retirement deed is submitted but both concerns cannot use this stake simultaneously.

But, in this case, while bidding for projects, FA Constructions is using 100% share of work done and financial turnover and FA Enterprises 80% share of same credentials. “It’s not permissible,” admitted a KIDC official, requesting anonymity.