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Bhushan smells a rat in SAIL’s bid to crush plant at Gua Ore mines

Bhushan smells a rat in SAIL’s bid to crush plant at Gua Ore mines
Senior advocate and Aam Aadmi Party leader Prashant Bhushan has alleged large scale corruption in bidding of Steel Authority of India’s crushing, beneficiation and pellet plant at Gua Ore Mines in Jharkhand, saying it has cost the exchequer a loss of around Rs 920 crore.

Bhushan, in a letter to steel minister Beni Prasad Verma, has demanded immediate suspension of the project and a thorough inquiry into the matter. The copy of the letter has also been sent to Prime Minister Manmohan Singh, cabinet secretary Ajit Kumar Seth and steel ministry secretary G Mohankumar. Decision on the bid was to be taken on 14 February.

Bhushan wrote in the letter that this project is symptomatic of large scale cartelisation and corruption in SAIL and is simply ‘the tip of the iceberg’. He has alleged that the project cost was illegitimately inflated from the original budget from around Rs 1,820 crore to above Rs 2,850 crore by falsifying the figures.

Bhushan has alleged that a cartel of reputed contracting companies have worked in tandem with an internal understanding, cheating SAIL to the tune of Rs 920 crore in the finalisation of the contract, for their prestigious pellet and beneficiation plant project, at Gua Ore Mines, tendered through the SAIL-RMD office in Kolkata.

‘A number of disturbing documents have been recently brought to my notice, which together show a prima facie case of large-scale corruption and collusion between employees of a public sector undertaking (SAIL) and some private companies involved in the tendering process for the crushing, beneficiation and pellet plant at Gua Ore Mines. The documentary evidence prima facie shows several offences under section 13 of the Prevention of Corruption Act and clear violations of the CVC guidelines and the Integrity Pact.

‘I demand your immediate attention to this very serious matter, so that the conspiracy underway can be arrested before further damage is caused to the public exchequer. The proposed Gua beneficiation and pelletisation project should be put on hold immediately, and a thorough inquiry should be ordered into the corrupt practices that are alleged to have taken place in the tendering process’, Bhushan wrote in his letter, in which he has accused Larsen & Toubro and McNally Bharat of forming a cartel with others and colluding with SAIL officials, other individuals and consultants to fix the bidding process.

Saying that similar cartelisation and collusion between officials of SAIL and officials from private companies have caused huge losses worth over Rs 25,000 crore to the public exchequer in the period from 2004 to 2012 and the capital costs of the in-house expansion budget of SAIL shooting up, Bhushan has demanded CAG audit into the entire functioning of SAIL in the period 2004-13.

‘The increase in capital costs is not due to any dramatic change in the market environment, but is essentially due to cartelisation and corruption, leading to contracts being given at exorbitant values, and budgets being artificially inflated to suit the designs of a few corrupt companies, as in the case of the Gua pelletisation plant. Thus, we demand an immediate and thorough CAG audit into the entire functioning of SAIL in the period 2004-13 so that an independent estimate of the total loss to the exchequer can be determined, and corrective measures can be undertaken immediately’, Bhushan wrote.
Nitish K Singh

Nitish K Singh

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