The Hindu : Front Page : Vigilance probe into KSTP irregularities

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Sunday, Nov 26, 2006
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Vigilance probe into KSTP irregularities

Special Correspondent

Formal decision on the investigation to be taken at next Cabinet meeting

THIRUVANANTHAPURAM: The Government has directed Vigilance director Upendra Verma to conduct a preliminary inquiry into the alleged irregularities in the Kerala State Transport Project (KSTP).

Official sources told The Hindu that Home Minister Kodiyeri Balakrishnan had directed Mr. Verma to conduct the investigation into the irregularities in executing the project on the basis of media reports. Further action will be taken on the basis of the inquiry report. A formal decision on the probe will be taken at the next Cabinet meeting.

The project, which began in 2000 with an estimated cost of Rs.1,613 crore, was expected to be completed by December next and all expenditure after the cut-off date would have to be borne by the State Government. Now, it has become almost sure that it would not be completed within the set timeframe. The project was cleared with an understanding that the State Government share will only be Rs.388 crore over the four to five-year period, but it exceeded the limit.

The Principal Secretary (Finance) had in a note to the Government on July 16, 2005, said the Finance Department was never informed about the magnitude of the financial crisis the Government would have to face.

Warning

He had also warned the Government that a lion's share of the Plan expenditure for the next two or three years will have to be set apart for Public Works Department against the present annual allocation of Rs.50 crore to Rs.100 crore. He had said that the State share will be as high as Rs.1,800 crore to Rs.2,000 crore and it would be impossible for the State budget to bear the financial burden.

Excessive bid price received from contractors, excess cost for shifting utilities and land acquisition were cited by the project managers as the causes for the cost hike. But the Finance Secretary had rejected such claims and said as the contractors were aware that the payments will be prompt, the increase in bid amount was unjustified. The conditions laid for the pre-qualification bid too had come in for criticism. It was pointed out that only a few big contractors were allowed to bid for the project and the note too had cited such reasons. Several big contractors had sub-contracted the works in violation of the terms of agreement. There were complaints that the former Government had ignored the Finance Secretary's warning and no serious attempt was made to resolve the crisis.

All these aspects are likely to come within the ambit of the probe. When contacted, Mr.Verma said that he was yet to receive an official communication and hence the modalities of the probe had not been worked out.

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