50-cr fraud exposes graft in BMC…..Sharad Vyas
Officials Manipulated Books To Help Contractors Get Crores;Scam Caught In Time
Officials Manipulated Books To Help Contractors Get Crores;Scam Caught In Time
Mumbai: A financially-sluggish BMC has been left red-faced by a major fraud that has exposed the rot of corruption in the civic body and some of its officials practice of cooking the books.The corporation has found that eight contractors,in connivance with civic officials,very nearly duped it out of Rs 50 crore by producing bogus bills for work on sewer lines and manholes that never really happened on the ground.The fraudsters would have successfully pulled off the scam were it not for a vigilant additional municipal commissioner (AMC) who waved a red flag before the money could be transferred.Already,a provision of outstanding liability of Rs 50 crore had been made in the BMCs 2010-11 G budget that is meant for sewerage and water supply projects.The AMC requested for an internal vigilance inquiry,which has recommended an FIR against the contractors and the guilty civic officials.However,no action has been taken as yet.The genesis of the fraud lies in 2007-, when the contractors were assigned work for repair,rehabilitation and replacement of sewer lines and manholes across the city.A few months ago,the BMCs sewerage operation (SO) department forwarded a proposal to the AMC,demanding a payment of Rs 50 crore be made to the contractors in the form of revised estimate for their work.A provision for the payment,the SO said,had been made under item number 41,fund code 40,functionary code51 and GL Code (505100420) in the G budget.
The assistant municipal commissioner asked the SO department to produce the bills,but it failed.When I enquired,officials from the SO could not produce the bills for the work.That was a dead giveaway for me.An immediate vigilance probe was ordered and I permitted our staff to lodge an FIR, said the AMC,who was recently posted outside the corporation.
The vigilance probe later found that no sewer work had been carried out and,further,that SO officials had made fraudulent entries in their departments property card to misguide the corporation.A property card is a logbook that all BMC departments mandatorily have to maintain;it records details of projects,repair works and other petty works being carried out on municipal properties.
Most entries in the SO property card were kept vague so that they dont match with the records maintained in the SAP accounting system, a vigilance officer told TOI.
Officials said the fraud is another example of misuse of a BMC practice that makes allowance for extraordinary leaps in the civic bodys liabilities on account of increaseor variation in project costs.In 2008-09,for the 90 works undertaken at a cost of Rs 1,031.63 crore,the BMC allowed 58% variation or a cost escalation of Rs 600 crore.In 2009-10,variation dipped to 55%;meaning,the cost of 122 works (Rs 1,808 crore) was allowed to go up to Rs 2,803.8 crore.
Officials said the fraud is another example of misuse of a BMC practice that makes allowance for extraordinary leaps in the civic bodys liabilities on account of increaseor variation in project costs.In 2008-09,for the 90 works undertaken at a cost of Rs 1,031.63 crore,the BMC allowed 58% variation or a cost escalation of Rs 600 crore.In 2009-10,variation dipped to 55%;meaning,the cost of 122 works (Rs 1,808 crore) was allowed to go up to Rs 2,803.8 crore.
Officials said many such frauds slip scrutiny.And though,in this case,the BMCs vigilance cell recommended an FIR against the contractors and the guilty officials,no action has been taken so far.The report was shown to the legal cell.It suggested that since no claimants have come forward as yet,we dont need to file an FIR, said a former SO official.
Chief accountant (water supply and sewerage department) Haribhau Shankar Nikam,when asked why he made a revised estimate provision,defended his actions and explained it was done on the request of the SO department,which is responsible for demanding funds and spending them.
Chief engineer (SO) VG Sahastrabuddhe,who has just taken charge,said: No doubt this is a black spot on the corporation and our departments performance.Even if no FIR was registered,a warning could have been given to the errant staff and contractors.Unfortunately,not a single memo has been dispatched and the guilty are patting their back for saving the BMCs money, he said.
IN A NUTSHELL
* In 2007-08,eight contractors were assigned work for repair,rehabilitation and replacement of sewer lines and manholes across the city
* The Water Supply and Sewerage Department (WSSD),last year,revised the money owed to the contractors and made an outstanding budgetary provision of Rs 50 crore in the 2010-11 G budget
* A few months ago,the payment was withheld when contractors were unable to produce the bills for the amount
* An additional municipal commissioner then ordered a vigilance enquiry into the matter
* The probe found that no sewage work had been done and recommended strict action against the contractors and the guilty civic officials,including filing an FIR
* The FIR,however,was never filed,ostensibly because no claimant had come forward to collect the money
IN THE PIPELINE
Works proposed by the BMCs sewerage operation department in 2010-11
* Laying sewer lines in the city.Estimate | Rs 50 crore
* Upsizing 17 km of old lines.Estimate | Rs 6 crore
* Laying lines by trenchless method at 38 locations.Estimate | Rs 32 crore
* Consultancy services for the MSDP II project.Estimate | Rs 65 crore
* Rehabilitation of non-man sewer lines.Estimate | Rs 39 crore
* Recommended works by the consultant.Estimate | Rs 30 crore
* Recycling water for non-potable purposes.Estimate | Rs 5.20 crore
* Assessment of sewer lines condition.Estimate | Rs 6 crore
* Upgradation of sewage pumping stations.Estimate | Rs 96 lakh