Subhas Chandra Pattanayak

In these pages placed earlier are observations on how the Naveen regime has provided non-Oriya minesmongers and landgrabbers with every opportunity they need to exploit Orissa. But the Public Accounts Committee of Orissa Legislative Assembly is now grasping how even a non-Oriya contractor has his vassals in Naveenraj and how they have sabotaged Orissa to satisfy his avarice.

This contractor is of Kerala and operates under a design called Bhagirath Constructions. One year after Naveen Patnaik became chief minister of Orissa, this contractor was awarded with a Rs.42.22 crore worth work order in March 2001 to construct only 1.5 Km of left-bank-canal of Rangali Irrigation Project from RD 31.5 to 33 Km on an agreement to complete the work by March 2004.

After acquiring the order, the contractor did not proceed as was expected and finally, in blatant contravention of the contract, abandoned the work much before March 2004, the time fixed for completion. But the Executive Engineer of the concerned division did not cause any measurement of the work done and did not try to see as to how much of the work had been executed in reality even though the contractor had stopped the work altogether. In connivance with the contractor the division made time elapse till monsoon broke and till it was time for the contractor to say that the deluge had filled up the excavated canal bed with silt and slush and it became practically impossible to take the measurement. Thus the situation becoming advantageous to the contractor, in June 2004, a sum of Rs.15.15 crore was paid to him on his claim of execution, although the entire amount, if was really due, should have been withheld towards the damage done to the state by his failure to complete the works. Clause 57.4 of the contract stipulated that if the contractor fails to finish the work in time and the state engages any other agency to complete it, then the contractor must pay the extra cost the state is to cough up in new allocation of the work to a new agency. But the EE deliberately sloughed over this clause.

There is no need to repeat that in Naveenraj, Orissa has become a grazing ground of non-Oriyas. Any non-Oriya, if unscrupulous and if not reluctant to grease the palms of the person at the helm of affairs, can play any trick against Orissa.

So the Kerali contractor, after using the EE to pocket Rs.15.15 crore in June 2004, hurled a claim of Rs.12.14 crore in October 2004 alleging that he had been forced to spend that extra amount as the state government failed to stop price rise in cement and steel etc. He added refund of bank guarantee, waiver of interest on advances to his list of claims in November 2004 and applied for extension of time up to December 2005 for completion of the work subject to fulfillment of these claims.

The claims were not tenable under the agreement and the contractor also knew it. But they were willfully marshaled in order to create a climate to evade payment of compensation against non-completion of the work.

Government made a mockery of its role and issued a clumsy order in February 2005 to the concerned Executive Engineer to close the contract keeping in mind the terms of agreement.

When the matter surfaced during audit, the Comptroller & Auditor General (CAG) reported that the “EE, however, rescinded the contract only with levy of liquidated damages and forfeiture of retention money and exonerated the contractor towards recovery of extra cost on completion of the balance of the work without recording any reason in violation of the terms of the contract. This resulted in loss of Rs 20.13 crore towards extra cost involved in execution of the left over work” through Orissa Construction Corporation that took up the assignment in March 2006 to complete by March 2008 the balance work at a cost of Rs 47.20 crore.

The CAG further made the following observations:

• A sum of Rs 13.77 crore was recoverable from the defaulting contractor towards outstanding advances with interest, liquidated damages, performance securities, cost of departmental steel, rent for the allotted Government quarters and testing charges. The EE did not initiate any action for realisation of the dues.

• Though the Bank Guarantee (BG) for Rs 8.06 crore was available for adjustment to the extent possible, the same was not encashed and its validity expired in October 2004. No action was initiated for seizure of the plant and equipment excepting issue of intimation to Police to provide watch and ward to the machinery of the contractor lying at site.

• Due to leaving the work site in haphazard condition, the excavated portion was filled in with silt and slush, which involved extra payment of Rs 53.84 lakh to OCC.

Thus, the failure of the EE to enforce appropriate clauses of the agreement led to loss on account of non-recovery of Rs 34.44 crore from the defaulting contractor.

When the PAC wanted the action-taken-report against this blatant corruption, the administrative department i.e. the department of Water Resources asserted that the amount of Rs.34.44.crore as determined by the CAG as recoverable from the contractor is not correct. The correct amount was Rs. 26 crores, it said.

The department secretary as well as the concerned EE was summoned by the PAC to clarify the position on May25, 2007.

As they maintained that, not Rs. 34.44 crores but Rs.26 crores were recoverable from the contractor, they were asked as to why even that amount has not been recovered. They only fumbled.

The PAC marked that the contractor had given a Bank guarantee to the tune of Rs.8.06 crores, which the department could have made the Bank to pay. But that guaranteed money has not also been recovered. In answering to query over this the EE stated that the contractor had given the Bank guarantee from the State Bank of India Branch at Ernakulum in Kerala. He had been to that Branch on 15 September 2004 to bring the guaranteed money but the Bank wanted two days time to make the payment and therefore he had to return empty handed, he said. Why did he not wait there for two days? The PAC asked. There was threat to my life as the contractor has pressed a pack of goons after me, he replied.

Whether or not the PAC would catch the culprit is known to time.

But what catches our eyes at the moment is enough to indicate how inefficient and corrupt is administration under Naveen Patnaik.

Concentrate on the Bank Guarantee issue.

The work order was given against this Bank Guarantee. But there was no guarantee for issuance of cash in the work head or at Bhubaneswar. It was not even for paying the cash in one lump. It was in piecemeal. Why the EE had accepted this most defective Bank Guarantee? Was he gained over by the contractor or was under powerful pressure?

The guarantee-giving Bank was State Bank of India. On presentation of the guarantee documents, the Bank could have issued a Draft for encashment in a preferred Branch in Orissa. Electronic transaction being a reality the EE had no reason to be asked to wait for two days.

The EE has told the PAC that when he was at Ernakulam on 15.09.04 to collect the money from the SBI, the contractor was in Bhubaneswar and had filed a case in a Bhubaneswar Court on 16.09.04 seeking injunction on release of the guaranteed amount by the Bank acting on which the Court had issued the injunction on 21.09.04 and therefore the Bank guarantee could not be utilized.

If this is not nonsense what else could be?

Chief Minister Naveen Patnaik is the minister in charge of water resources. He cannot say that he is not aware of the audit reports. He cannot say that he is not aware of the case lodged by the Kerali contractor to debar his department from utilizing the Bank Guarantee. He cannot say that payment of Rs.15.15 crore to the non-Oriya contractor when he had abandoned the work incomplete and therefore was legally required to pay compensations to Orissa was not driven by the desire to help the contractor. But he cannot show what action he has taken against the errant engineer who has played such a fraud on the people of Orissa.

This leads us to a storehouse of inferences.

And unveils another instance of black rule that has engulfed Orissa under Naveen Patnaik.

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