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Probe into irregularities could slow road projects

Probe into irregularities could slow road projects
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First Published: Mon, May 31 2010. 09 54 PM IST

Updated: Mon, May 31 2010. 09 54 PM IST
New Delhi: Award of highway projects could be delayed because of an investigation against some senior officers of the National Highways Authority of India (NHAI) for alleged irregularities.
The Central Bureau of Investigation (CBI) last week raided offices of NHAI and homes of some of its officials, recovering around Rs1 crore in cash. Investigators are probing alleged corruption and abuse of authority regarding the award of a project in Maharashtra.
The raids could end up slowing the pace of contracting out work, an NHAI official said.
“Out of the six projects to be discussed at the PPPAC (public-private partnership approval committee) meeting on Friday, four are handled by the officer (who was arrested by CBI),” he said on condition of anonymity. “I don’t know what is going to happen.”
The raids came just days after road transport minister Kamal Nath announced that his ministry had awarded 118 projects worth in excess of Rs60,000 crore in the past one year.
The work plan for 2010-11 shows that Madhya Pradesh and Maharashtra, for which the arrested officers were directly overseeing highway development, have 12 projects with a combined length of 2,397km.
The arrest of two officers on 25 May could lead to additional caution by others, an analyst said.
“In a case like this, once people are arrested, people become more careful,” said Siddhartha Das, who looks at private-public partnership matters at consulting firm Ernst and Young Pvt. Ltd.
“NHAI is reasonably decentralized now. They have only five or six people at the headquarters looking at procurement. So if two of them get arrested, it will affect the programme,” said an executive with another consulting firm, who didn’t want to be named. “People will look over their shoulders now, and yes, the industry has got a bad name.”
Constant changes in required documentation means that highway authority officials have a lot of discretionary power to disqualify companies even on the flimsiest of grounds, said an analyst with a third consulting firm, who also requested anonymity for fear of affecting future projects.
There have been instances in the past where a company has been disqualified because its bid papers were not hard-bound as per stipulations, but were instead spiral-bound, this analyst said, adding that as long as these issues were not addressed, questions on propriety of the bid process would continue to be raised.
“There is a lot being done on whether rules are more transparent than before. But more could be done,” said Sanjay Sethi, executive director and head of the infrastructure group for investment banking firm Kotak Mahindra Capital Co. Ltd. “The entire process of awards could clearly be upgraded.”
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First Published: Mon, May 31 2010. 09 54 PM IST