The Hindu : Kerala / Thiruvananthapuram News : Chandy wants probe into KSTP contract

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Saturday, Dec 22, 2007
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Kerala - Thiruvananthapuram

Chandy wants probe into KSTP contract

Special Correspondent

Says new contract awarded to Pati BEL violating procedures
‘Publish Vigilance inquiry report on the KSTP work’

Thiruvananthapuram: Leader of the Opposition Oommen Chandy on Friday demanded a comprehensive probe into the Kerala State Transport Project (KSTP) contract awarded to Pati BEL which did not participate in the tender process.

In a letter to Chief Minister V.S. Achuthanandan, Mr. Chandy also demanded that the government publish the Vigilance inquiry report on the KSTP work undertaken during the United Democratic Front (UDF) rule.

Additional burden

He said the State would have to bear an additional burden of Rs.120 crore only because the Left Democratic Front (LDF), on assuming office, refused to accept the claims of the contracting firm.

Finance Minister T.M. Thomas Isaac had tried to put the former UDF government in the dock by alleging large-scale corruption in the KSTP work. When the UDF laid down office, the government had to pay Rs.12.5 crore as arrears to Pati BEL.

The company had agreed to complete the rest of the work for Rs.106 crore if the government paid up the arrears, besides giving a six-month extension.

Terming the new contract unprecedented and unheard of in the history of the State, Mr. Chandy said the government would not have to pay a 72.5 per cent excess on the contract, Rs.35 crore towards arbitration and escalation cost, working out to an additional burden of Rs.120 crore.

Though Mr. Chandy stopped short of alleging corruption in the new contract, he recalled that a Cabinet sub-committee, headed by the Finance Minister, had negotiated with the Pati BEL officials concerned.

Blame game

But now the Minister was trying to put the blame on State officials for failing to consider the company’s arrear claims.

He said it was the responsibility of the Minister to correct the officials in case they erred in their decisions. Instead of doing so, the Minister had created a situation that led to a delay in getting the project off the ground.

Mr. Chandy said the new contract was awarded to Pati BEL violating all procedures.

The company did not participate in the new tender process and the government received bids that were as high as 93 per cent excess.

He alleged that even the Cabinet did not have the powers to award contract to a company that did not participate in the tender process.

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