By Pratyush Deep
At least one Adani Transport-led consortium, one firm with alleged BJP links, and four companies that donated to the BJP have been awarded road construction projects under the first phase of the central government’s Bharatmala Pariyojana. And a recent report by the Comptroller and Auditor General found irregularities in the awardments to all these companies.
For example, the consortium led by Adani Transport is Suryapet Khammam Road Private Ltd. It was awarded a project to four-lane the national highway between Suryapet and Khammam in Telangana under the hybrid annuity model. The company did not fulfil the requisite condition of having experience in construction work in the highway sector.
Then there’s the case of PNR Infotech, an infrastructure company promoted by Naveen Jain, a BJP leader. PNR Infotech was awarded the contract of package 1 of Lucknow Ring Road in August 2019 at 17.44 percent higher cost than originally estimated. The bid cost even exceeded the revised estimates by 2.02 percent. At the time, Jain was mayor of Agra.
Similarly, the CAG report documents irregularities with four companies – IRB Infrastructure Developers, J Kumar Infraprojects, Larsen & Toubro, and MKC Infrastructure Ltd – that had donated a cumulative amount of over Rs 77 crore to the BJP between 2013 and 2021.
Here’s what we found.
According to the CAG report, the lead member of Suryapet Khammam Road Private Ltd had submitted the experience certificate of “some other company”. This “other company” didn’t even work in the highway construction sector, it worked in power.
Additionally, the report said the lead member’s chartered accountant certificate on its net worth – which is required to be Rs 304.33 crore – was in the name of a third party.
While the Adani firm had a lion’s share of 74 percent in the consortium, it did not “fulfil the condition of Request for Proposal regarding experience of five years in construction works in highway sector”. The company had never performed any construction works “directly or indirectly” as per the list of works submitted by the bidder.
However, the National Highways Authority of India “for no reasons on record declared the bidder technically qualified” at a bid project cost of Rs 1,566.30 crore in March 2019.
Under the hybrid annuity model, the NHAI paid 40 percent of the total expenditure on the project. The remaining 60 percent was to be arranged by the road developer, which usually financed around 20-25 percent of the project cost and took a debt for the remaining amount.
Newslaundry contacted a spokesperson for the Adani Group to ask about the allegations contained in the CAG report. The spokesperson said, “We strongly reject any suggestion that Adani Group and its businesses have not acted as per the regulations and accounting standards of the jurisdictions.”
The spokesperson added that the condition in the request for proposal document regarding the threshold technical capability was satisfied by the “other consortium member” and that it met its minimum net worth requirement by “considering the net worth of its associate – Adani Enterprises.”
On March 7, 2019, the bids for package 1 of Lucknow Ring Road were floated at an estimated project cost of Rs 904.31 crore.
Strangely, PNC Infotech was awarded the contract for Rs 1,062 crore – 17.44 percent higher than the original estimate.
The NHAI’s original estimates were based on the scheduled rates of 2016-17. The project’s estimated cost was subsequently revised based on the rates of 2019. But even then, as detailed in the CAG report, the bid by Jain’s company exceeded bid estimates by 2.02 percent.
IRB Infrastructure Developers, which won the NHAI contract for Hapur Bypass-Moradabad highway project at 68 percent lower premium, has donated about Rs 65 crore to BJP since 2013.
The NHAI had invited bids for the project with an anticipated annual premium of Rs 97.77 crore and a 22-year concession period. However, in March 2018, the government agency accepted IRB Infrastructure’s bid at an annual premium of only Rs 31.50 crore. According to the CAG report, the NHAI explained its decision by citing traffic forecast and wholesale price index by the detailed project report consultant.
Meanwhile, IRB Infrastructure’s website said the project was worth Rs 3,345 crore. The CAG report noted: “Change in NHAI’s perception occurred within a week of the project’s bid due date. NHAI accepted the error in estimation without any justified reasons on record and without going for re-tendering.”
Notably, NHAI had opened the bid for the highway on a toll basis, known as BOT mode, under which private players are responsible to design, build, operate and earn revenue from the facility during the contracted period, and eventually transfer the facility back to the government.
IRB Infrastructure donated Rs 20 crore to the BJP in 2020-21, while three of its related companies donated about Rs 45 crore to BJP between 2013 to 2021.
In December 2018, J Kumar Infraprojects won the Rs 1,349 crore contract for Dwarka Expressway package 1. This was despite the company failing to fulfil the request for proposal condition, the CAG report said. The proposal said a winning bidder must have completed construction of at least “one deep or shallow tunnel consisting of single or twin tubes”.
Between 2013 and 2018, J Kumar Infraprojects donated about Rs 6.46 crore to the BJP. It gave Rs 5.25 crore to the party in 2017-18, Rs 1 crore in 2015-16, and Rs 21 lakh in 2013-14.
The company’s independent directors include Raghav Chandra, a former IAS officer who had been the chairman of the NHAI between 2015 and 2016. Chandra is also additional director of GR Highways Investment Manager, a GR Infraproject subsidiary, and an independent director with Adani Group’s business partner Welspun Enterprise. Adani Group and Welspun Enterprises have a gas exploration joint venture called Adani Welspun Exploration.
J Kumar Infraproject also has business ties with Michingun Engineers, a company with 50.10 percent ownership of Welspun Enterprise.
Significantly, J Kumar Infraproject was blacklisted by the Brihanmumbai Municipal Corporation in 2016 in connection with a 2015 road scam. In 2021, it made news when a flyover it was constructing collapsed in Mumbai. At the time, the opposition had strongly criticised the BJP government in Maharashtra for awarding the project’s tender to the company.
In connection with the Delhi-Vadodara expressway, the CAG report flagged anomalies in the NHAI awarding contracts for packages 17 to 25 to a joint venture comprising JiangXi Construction Engineering Corporation, MKC Infrastructure, GR Infraprojects, Larsen & Toubro, and GHV India.
Newslaundry found that Larsen & Toubro had donated Rs 5 crore to BJP in 2014-15 and MKC Infrastructure Limited had donated Rs 75 lakh between 2018 and 2020.
The CAG report said the estimated civil cost of Delhi-Vadodara expressway was Rs 32,839 crore, while the pre-construction cost was Rs 11,209.21 crore – both divided across 31 projects. The eight projects that recorded irregularities were awarded between May 2019 to June 2020. It was observed that the bids for these projects were invited based on incorrect estimates, resulting in undermining “fair request for proposal conditions” on which bids could have been invited and analysed.
The NHAI determined “incorrect civil cost estimates based on old schedules of rates”, even though updated rates were available before the notice for inviting tenders was floated.
Out of these eight projects, five were executed by GR Infraproject, one by GHV India Infrastructure, one by L&T, and two by MKC Infrastructure.
GR Infraproject had come under public scrutiny in June last year after its under construction bridge in Bihar’s Kishanganj collapsed. The CBI had also raided its offices after employees were accused of allegedly bribing NHAI officials for clearing road project bills.
GHV India Infrastructure is also under a cloud, accused in an NHAI bribery case last year.
The CAG report also flagged a contract awarded by NHAI to KRC Infraprojects for a four-km stretch of the Gwalior-Shivpuri highway. The contract of Rs 18.39 crore was awarded in 2018.
Meanwhile, for the Lucknow Ring Road package 3B, the NHAI proceeded with the bidder despite the evidence of falsified bid documents.
In the Churachandpur-Tuivai project package 2B, the bidder won the bid despite failing to fulfil required bid capacity. “The assessed bid capacity of the bidder was Rs 101.48 crore as against the required bid capacity of Rs 240.01 crore. Despite this, the work was awarded to the contractor in clear violation of the prescribed procedure of bidding,” said the CAG report.
It said that in Churachandpur-Tuivai and Chittoor-Mallavaram projects, the notices inviting tenders were issued before the finalisation of the detailed project reports, ostensibly resulting in a lack of clarity in project specifications and scope of work.
No details were available on the companies awarded the contract for Lucknow Ring Road package 3B, Churachandpur-Tuivai package - 2B and Chittoor-Mallavaram projects. Newslaundry filed an RTI in this regard, and also sent questionnaires to the companies. This report will be updated if they respond.
This report was republished from News Laundry as part of The News Minute-Newslaundry alliance. Read more about our partnership here.