BJP MP's AJAY SANCHETI company got Rs 1,350cr dam deals illegally
MUMBAI: A non-existing company owned by BJP Rajya Sabha MP Ajay Sancheti bagged irrigation projects worth Rs 1,350 crore in Maharashtra in 2007-08.
The firm, Shakti Kumar M Sancheti Ltd, was renamed SMS Infrastructure in November 2005. Yet, Sancheti was awarded contracts by the Vidarbha Irrigation Development Corporation (VIDC) under the name of the old company. "Once the name of a company is changed, the old name ceases to exist and the new name comes into existence. The Sancheti group used the old name as well as the new name concurrently to obtain more contracts than permitted,'' said officials. Government sources said VIDC's norms permitted a maximum of three contracts to a single contractor. Its tender condition clearly stipulated that in case of violation, the contractor would be blacklisted.
Sancheti is a close aide of BJP president Nitin Gadkari and his family has RSS links for the last three generations. His uncle, Chainsukh Sancheti, is the BJP MLA from Buldhana district.
Documents accessed by TOI reveal that the now defunct firm (Shakti Kumar) went on to bag four contracts; two in Gosikhurd in Bhandara district, one in Amravati district and another in Yavatmal district collectively worth Rs 1,350 crore. (VIDC later cancelled one of the tenders because it was awarded at an exorbitant rate.)
Simultaneously, SMS Infrastructure also procured projects worth an additional Rs 389 crore between 2006 and 2009.
Sancheti was not available for comment despite several attempts to contact him.
MPs protest 250% dam cost escalation
In November 2011, two MPs wrote to Union water resources minister Pawan Kumar Bansal about the unusual increase in the cost of the Purna barrage-2 (Ner Dhamana) irrigation project. The work was awarded to Sancheti. BJP's Haribhau Jawale and Shiv Sena's Nandrao Adul complained that its cost had shot up from Rs 182 crore to Rs 638 crore. "The design finalization was done way ahead after the tender was awarded. This resulted in excess expenditure by more than three times,'' said Jawale's letter. He further said that the original 2008 administrative approval was obtained without following due procedure. "If tender had been awarded post-finalization of design, it would have saved a lot of money and resources. As a result, cost of irrigating the land is estimated at Rs 9.19 lakh a hectare whereas the normal cost is around Rs 2 lakh a hectare,'' he added. The Centre had imposed a condition that the project be completed within the sanctioned amount. "However, reality seems to be far different as the project cost is revised drastically. Definitely, there seems to major manipulation causing undue benefit to certain vested interests,'' said Jawale. He urged the minister not to sanction the revised estimate as it was an "unrealistic'' one.
Advance paid as ‘special case’ to Sancheti firms
MUMBAI: Vidarbha Irrigation Development Corporation's (VIDC) benevolence towards BJP MP Ajay Sancheti went beyond giving illegal contracts to his company. The contractor received a mobilization advance of Rs 121 crore despite various government circulars which prohibited such advances. These circulars were later scrapped by the then water resources minister Ajit Pawar in 2008.
Interestingly, resolutions signed by Pawar and VIDC executive director D P Shirke stated that the advance was paid to Sancheti's two firms as a special case. Strangely, the resolution also said that there was no provision in the tender for such advance payment. These resolutions were not signed by the secretary of water resources department, who is the ex-officio managing director of VIDC.
TOI has also learned that in 2010, the VIDC's governing council stayed the rule granting three works per contractor. In March, the central water commission chairman, R C Jha, visited the Gosikhurd project and observed that the right bank main canal being executed by Sancheti had either collapsed or tilted by nine metres at various spots. But VIDC engineers defended the work, stating that this was due to geological conditions. Sancheti's SMS Infrastructure claims to be one of the largest infrastructure companies in Central India with an employee base of over 1,300 people and a turnover of around Rs 1,100 crore.
Monday, October 01, 2012
First Published: 01:20 IST(1/10/2012)
Last Updated: 10:15 IST(1/10/2012)
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.