By Vivek Avasthi,
� � In what could be termed as a shameful attempt to wash off their sins, the Uttar Pradesh Power Corporation Limited (UPPCL) finally cancelled tenders worth Rs.600 crores awarded to a Hyderabad based comapny - M/s Variegate Projects Private Limited.
Fully aware that the company was blacklisted, UPPCL had awarded the tenders to this firm. The story is murkier as the Bank Guarantees furnished by the company were bogus in nature and the top brass to the bottom of the UPPCL was aware of this fact from day one.
But the million dollar question is that how are these agencies going to recover the Rs.90 crore advance made to the company which submitted bogus bank guarantees and is missing from the state now ?
It took 15 days for the MVVNL (Madhyanchal Vidyut Vitran Nigam Limited), the discom of UPPCL, which had given work to this company, to annul the tenders. The first query to this regard was made by this reporter on the afternoon of November 20, this year. And this is what the top shots had to say then.
The game of passing the buck had started there and then within the UPPCL and MVVNL. The Managing Director of Madhyanchal Vidyut Vitran Nigam Limited (MVVNL), Shameem Ahmed when contacted over the telephone, said that he does not know much about the matter as he took over as MD of Madhyanchal just about six months ago. He adds that the tenders were awarded to Variegate Projects Private Limited about a year back and therefore he has nothing much to do with it. But at the same time, he insists that the bank guarantees furnished by the company had been verified by his officers. He said "you should speak to A.P. Mishra, in whose tenure the tenders were awarded to Variegate".
A.P. Mishra, the then Managing Director of Madhyanchal Vidyut Vitran Nigam Limited (MVVNL) when tenders were given to Variegate, has since been elevated to the post of Managing Director of Uttar Pradesh Power Corporation Limited (UPPCL). When contacted, Mishra said "ask the MD of Madhyanchal, I don't remember much about it and now, how can I tell about this". When asked that the work to this company was given in his tenure, he said that "the process of verification of bank guarantees is done by the office staff (not the work of the MD) and I do not remember the complete details but the bank guarantees would have been verified in the due process". He put the ball back in the court of the current MD of Madhyanchal by asking to call him for further details.
The passing the buck game did not end here. On the same day, i.e. November 30, last, Chairman of UPPCL and Principal Secretary Energy (U.P. Government), Sanjay Agarwal, when contacted, said that "you are the first person who is telling me this, I am going to Delhi tomorrow so call me after two days and I will tell you all details about this". Denying any knowledge about it Agarwal said that he would only be able to comment on the issue once he gets it cross checked. But as they say tomorrow never comes, two days also never came.
Umpteen calls on his office number gave the same reply "Sahab office mein nahin hain, Sahab outstation daure par hain and Sahab meeting mein hain." Calls to his mobile either went unanswered or were cut abruptly. Messages on his mobile went unreplied.
An email was sent to Mr. Agarwal on Deccember 14, last, but to no avail. Another sent on December 16 afternoon, finally got a reply, that too at 9:57 pm on the same night.
Sent from his personal email by Sanjay Agarwal, it says -
May check with MVVNL Contracts of Verigate has been cancelled FIR for bogus guarantees have been registered Concerned SE has been removed from his assignment Chief Engineer Commitee has been fixed to fix responsibility
Sent from my iPhone
But the million dollar question is that how is MVVNL or its parent body UPPCL
recover its money from M/s. Variegate Projects Private Limited now ? A total of Rs. 90 crore has already been given to the firm as mobilization amount or advance payment. Moreover, funds involved in this work are from the Rural Electrification Corporation (REC), a Public Sector Undertaking of the central government.
Where will the recovery made from when the bank guarantees are bogus ? Who will pay back the sum of Rs 90 crores of the REC ? Will the officials of MVVNL and UPPCL made to cough up this amount ? Or this amount will never be recovered ? And moreover, what happens to the rural electrification work of the six districts of Uttar Pradesh Now ? Fresh tenders being issues will automatically delay the electrification work of hundreds of villages by more than one year. Who would be held responsible for all this ?
Bank guarantees are taken from companies as a surety that they will complete the work in the specified time limit while using material of prescribed quality. Failing to do the, the bank guarantee would be revoked by the state government agency and money given to the firm would be recovered. But in this case, UPPCL and its subsidiary MVVNL, will not be able to extract a single penny from this company as the bank guarantees furnished by the company are bogus.
This is just one mere incident corruption in this department. Insiders say that this could just be the tip of the iceberg and if all major tenders given by the Uttar Pradesh Power Corporation Limited are probed into, this scam could be the father of the National Rural Health Mission (NRHM) scandal or any other con game ever witnessed in the history of Uttar Pradesh.
It is a specialized case of corruption rampant in the "power circles" of Uttar Pradesh where scheming officials of the concerned department are hand-in-glove with some corrupt corporates. The bottom line is that everyone wants to make quick buck with just no fear of law or regard of the laid down rules, regulations and procedures.
The funds involved come from the central government's Public Sector Undertaking - Rural Electrification Corporation Limited, more commonly known as the REC. And concerned authorities of Uttar Pradesh seem to have made a cruel joke in this case of rampant corruption with the money meant to provide light in the dark nights of the villages of the state.
The company which had been given the work is a blacklisted company and despite being fully aware of this fact, UPPCL did not think twice before giving tenders to this Hyderabad-based company.
What comes as a bigger shocker is that all six bank guarantees furnished by the company in lieu of the tenders in six districts of Uttar Pradesh, were bogus. And what comes as a bigger surprise is that either the UPPCL did not even bother to cross check the bank guarantees or it simply ignored it for reasons better known to its top brass.
Variegate Projects Private Limited had been given work under the Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) - 12th plan by Madhyanchal Vidyut Vitran Nigam Limited, a division of the Uttar Pradesh Power Corporation Limited (UPPCL). Work had been allotted to the company in Amethi, Balrampur, Sultanpur, Hardoi, Ambedkar Nagar and Gonda districts of Uttar Pradesh. The total volume of contracts is Rs. 600 crore.
Variegate Projects Private Limited has its registered office, as per the records of the Registrar of Companies (RoC), Hyderabad, at Plot no. 436, Road No. 80, Jubilee Hills, Phase III, Hyderabad, Telangana.
The company was incorporated on 13 July, 2007 with an Authorised Capital of Rs. Nine crore and Paid Up Capital of Rs, Five Crore Ninety One Lakhs. The activity column of the firm mentions -Building completion (Includes activities that contribute to the completion or finishing of a construction. Repairs of the same type are also included in the corresponding sub-classes).
Gundreddy Lakshmana Siva Reddy is the Managing Director of the company and Gundreddy Ravindranatha Reddy is the Whole-Time Director. The date of appointment for both the directors is 13 July, 2007.
Variegate Projects Private Limited was issued a show cause notice by the Transmission Corporation of Telangana Limited (TCTL) demanding explanation for "very poor progress of works and always behind the agreed schedule pertaining to supply, erection, testing and commissioning................in Mahaboobnagar District on turnkey basis, failing which action will be initiated as per terms and conditions of the contract". It was blacklisted by the TCTL on September 16, 2014 for a period of three years. Just after eight days, TCTL shot a letter to TRANCSOs of all states including Uttar Pradesh Transmission Corporation, informing them about the blacklisting of Variegate Projects Private Limited.
The company had furnished bogus bank guarantees worth Rs. Fourteen Crore Eighty Four Lakhs Seventy Nine Thousand Seven Hundred Ninety Eight only/- for Amethi District, of Rs. Seven Crore Eighty Nine Lakh Eighty Five Thousand Nine Hundred and Thirteen only/- for Sultanpur District and Rs. Sixteen Crore One Lakh Forty Six Thousand Five Hundred and Seventeen only/- for Hardoi District.
It had provided fake bank guarantee of Rs. Twenty Three Crore Seventy Nine LakhTwenty Two Thousand One Hundred only/- for Balrampur Disrtict, Rs. Seventeen Crore Eleven Lakh Twenty Eight Thousand Three Hundred and Seventeen only/- for Gonda District and Rs. Ten Crore Thirteen Lakh Forty Five Thousand Seven Hundred and Fifty only/- for Ambedkar Nagar District.
The bogus Bank Guarantees were made on Rs. 100 stamp paper and have been said to be issued by Union Bank of India, Kamalapuri Colony Branch, Hyderabad - 500073. Enquiries with copies of these papers of Bank Guarantees (BGs) with the top officials of the Union Bank of India, who did not wish to to named, revealed that the BGs are bogus and were never issued by their bank. The Fraud Detection Cell of the Union Bank has already started its internal enquiry into the whole episode to ascertain whether any employee of the bank was involved in this racket or not.
It will not be easy for the top brass of UPPCL and MVVNL to shift the blame of not getting the bank guarantees of this firm on the lower level staff as the game of furnishing fake bank guarantees is not new. The central funding agency of the RGGVY Scheme, the Rural Electrification Corporation has clearly stated through a letter dated October 10, 2015, to all four discoms of Uttar Pradesh that under the Phase-2 of the 11th Plan of RGGVY, bank guarantees furnished by the executing agencies in cases of work taken in three districts of Gonda, Unnao and Shahjahanpur, were found to be not genuine.
An advisory from the REC further states that "Independent confirmation from Bank is to be obtained by Discom for individual bank guarantee (BG) and verified BGs are to be uploaded. It is advised to assign responsibilities of handling project-wise BGs by an independent officer of senior level. The officer shall be entrusted with the responsibilities of verification of BGs, independently from issuing bank keeping them validated. The officer shall be solely responsible for verification and issuance of BGs time extension required before expire".
The REC advisory further goes on the state that "In view of the above, it is requested to advise the officer concerned to arrange Action Taken Report and to make an effective attempt to verify the genuineness/authenticity of the BGs in accordance to the laid down guidelines/norms of 12th Plan SBD as well as the CVC's guidelines on BGs. This may enable us to release balance amount against 1st instalment".
Sources say that this is a major racket that is going on in the state. Funds involved are huge and so are the commissions. In every rural electrification project, the commission involved is not less than ten percent of the total value of the tender. The money gets divided from top to bottom of the entire system and from the senior most to the junior most rank, every one is entitled to his pound of flesh.
Insiders say that this nexus of top ranking officials of the power sector of the state and corporates, could be just a small instance of Madhyanchal Vidyut Vitran Nigam Limited (MVVNL). There could be many more companies which have been given work by Madhyanchal, and discoms of the state which includes Poorvanchal, Paschimanchal, Dakshinanchal Vidyut Nigam Limited and KESCo, dismissing and brushing off all rules and regulations. The more deep the probe, more such glaring instances would come to light.
And now, the same old story of passing the buck from top to bottom will be repeated. Soon, there would be a high-level probe set up to look out for and identify a scapegoat that can be easily sacrificed to let the world know that the system has been "cleansed". The big fish of corruption, will off course remain at the helm of affairs, looking out for newer routes and short cuts and financial success ! (Writer is a freelance journalist)