Office of the Inspector General of Police

Vigilance, Water Resources

NOTES

ON

Investigation into Bellary Nala Irrigation Project

Submitted by the Inspector General of Police, Vigilance,

Part – A

  1. Background:

The Government of Karnataka entrusted the office of the Inspector General of Police, Vigilance, Water Resources Department, to investigate into the misappropriation in Bellary Nala Irrigation Project vide G.O.No. d¸ÀAE 161 ¸ÉÃE« 2008 dated 19-09-2008.

  1. Spot Visit.

The office of the Inspector General of Police, Vigilance, Water Resources department undertook the investigation and Officers visited various sites of Bellary Nala Irrigation Project on dated 27-09-2008, 28-09-2008, 15-10-2008 to 17-10-2008, 30-10-2008, 31-10-2008, 07-11-2008, 08-11-2008, 13-11-2008, 14-11-2008, 15-11-2008, 24-11-2008, 25-11-2008, 26-11-2008.

  1. The investigation officers.

The investigation team consisted of the following officers:

  1. Sri.Amar Kumar Pandey, IPS. Inspector General of Police.
  2. Sri.Deepak Doreyawar, Joint Controller of Accounts.
  3. Sri.G.Krishnamurthy, Executive Engineer.
  4. Sri.H.R.Raja Rao, Assistant Executive Engineer.
  5. Sri.C.Chandramouli, Assistant Engineer.
  6. Sri.Y.R.Ramesh, Assistant Engineer
  1. The Dam.

At the outset the vigilance team investigated the work done on the dam site and concludedthatmisappropriation of Rs.6,84,07,922.00(Rupees six crores eighty four lakhs seven thousand nine hundred twenty two) has taken place. The findings are based on the verifiable documentary evidence collected and examined by the investigating officers.

5. The Canal.

Secondly, the canal work was investigated and it has been established that misappropriation of Rs.14,99,54,666.00(Rupees fourteen crores ninety nine lakhs fifty four thousand six hundred sixt six) has taken place.

  1. The avoidable commission to EPIL.

The EPIL’s role has ben that of essentially a middleman in the entire project though the BNIP project was entrusted by obtaining exemption under 4(G) KTPP Act 2000 to complete project as a contractor.

But, the EPIL has completely sub-let the work against the provisions of the agreement clause and sub-let the project to another contractor namely BINCO. The BINCO Company which got the project from EPIL is constructing the Dam by getting drawing, designs, estimates etc., preparedfromoutsoursed agencies which was only signed by EPIL togive it alegitimacy andraise bills. For the job of a middleagent EPIL has charged for overall work approximately 5% (Rs.6,91,40,000-00)of the Project cost (Rs.138,28,00,000.00)and allowed BINCO Company to retain 4.25% (Rs.5,87,69,000-00) of the project cost out of 9.25% (Rs.12,79,09,000.00) of the project cost charged to the KNNL., the Government of Karnataka.

If the same work had been done by the Department Engineers, who are equally qualified and as has been the practice in constructing all the prestigious dams of the State, the exchequer would have saved atleast 5% of the project cost which is being paid to the EPIL just to play the role of a middle agent. Also the manner of assigning the deal to EPIL is not clear. Similarly, the manner in which EPIL has entrusted the work to BINCO with utmost disregard to the Agreement clauses also confirms suspicion.

  1. Total Amount Misappropriated Without any Work Done.

Thus, the investigating officers have established that a misappropriation of Rs.21,83,62,588.00(Rupees twenty one crores eighty three lakhs sixty two thousand five hundred eighty eight only) has taken place during the construction of Bellary Nala Irrigation Project. The said amount Rs.21,83,62,588.00 has been paid to the contractor without any work done on the project. The documents etc. has been falsely created to make the payment with active connivance of the EPIL and sub contractor BINCO by violating the prescribed rules of the Government PWD Code. the BNIP ContractAgreement Conditionsbetween EPIL and the Government.

8. Responsible officers.TheEngineers of the Departmentresponsible for misappropriation are:

Sl No. / Name / Designation
1 / Sri.S.S.Khanagavi / Chief Engineer, Irrigation ( North ), Belgaum
2 / Sri.N.Naganna / Chief Engineer (Retired), Irrigation (North), Belgaum
3 / Sri.H.C.Ramendra / Superintending Engineer, GRBC Circle, Hidkal
4 / Sri.K.B.Krishnoji Rao / Executive Engineer, GRBC, Division No.2, Hidkal
5 / Sri.N.Nagaraju / Executive Engineer, GRBC, Division No.2, Hidkal
6 / Sri.S.D.Parashetty / Executive Engineer (Retired), GRBC, Division No.2, Hidkal
7 / Sri.M.K.Handigunda / Executive Engineer, GRBC, Division No.3, Gokak
8 / Sri.S.S.Kinagi / Assistant Executive Engineer, CBC, Sub-Division No.2, Hidkal
9 / Sri.R.B.Kudari / Assistant Executive Engineer, GRBC, Sub-Division No.13, Hidkal
10 / Sri.S.S.Angadi / Assistant Executive Engineer, GRBC, Sub-Division No.13, Hidkal
11 / Sri.H.P.Siddapure / Assistant Executive Engineer, GRBC, Sub-Division No.5, Gokak
12 / Sri.P.B.Sagare / Assistant Executive Engineer, GRBC, Sub-Division No.6, Gokak
13 / Sri.B.Y.Pawar / Assistant Executive Engineer, GRBC, Sub-Division No.8, Gokak
14 / Sri.Praveen R.Hulaji / Assistant Engineer, CBC, Sub-Division No.2, Hidkal
15 / Sri.Ajit J.Patil / Assistant Executive Engineer, GRBCC, Sub-Division No.2, Hidkal
16 / Sri.Ramesh S.Pujar / Assistant Engineer, GRBCC, Sub-Division No.1, Hidkal
17 / Sri.S.M.Baldar / Assistant Engineer, GRBC, Sub-Division No.13, Hidkal
18 / Sri.S.T.Kalasappagol / Assistant Engineer, GRBC, Sub-Division No.2, Hidkal
19 / Sri.B.A.Honnakasturi / Assistant Engineer, GRBC, Sub-Division No.13, Hidkal
20 / Sri.A.I.Nagamoti / Assistant Engineer, GRBC, Sub-Division No.8, Gokak
21 / Sri.A.S.Biradar / Assistant Engineer, GRBC, Sub-Division No.8, Gokak
22 / Sri.S.B.Kamanuri / Assistant Engineer, GRBC, Sub-Division No.5, Gokak
23 / Sri.Prabhakar R.Kamat / Junior Engineer, GRBC, Sub-Division No.6, Gokak
24 / Sri.S.P.Patil / Junior Engineer, GRBC, Sub-Division No.2, Hidkal
25 / Sri.V.S.Patil / Junior Engineer, GRBC, Sub-Division No.6, Gokak
  1. Responsible Officers and Staff of the Accounts Department.

The officers of the Chief Accounts Officer, KNNL., Dharwad has been found to be responsible for very serious lapses which has contributed to the misappropriation of the Government funds. The officers responsibleare:

SlNo. / Name / Designation
1 / Sri.B.S.Bagewadi / Chief Accounts Officer (Retired), KNNL, Dharwar
2 / Sri.M.C.Tirlapur / Accounts Officer, KNNL, Dharwar
3 / Sri.M.B.Shahapur / Accounts Officer (Incharge), KNNL, Dharwar
4 / Sri.N.R.Chandu / Accounts Officer, KNNL, Dharwar
5 / Sri.K.H.Agasimani / Accounts Officer, KNNL, Dharwar
6 / Sri.M.K.Gawarwad / Audit Officer, KNNL, Dharwar
7 / Sri.J.Giridhar Rao / Audit Officer, KNNL, Dharwar
8 / Sri.V.B.Bikshavati / Accounts Officer, KNNL, Dharwar
9 / Sri.R.T.Hosamani / Accounts Officer, KNNL, Dharwar
10 / Sri.S.R.Yeligar / Accounts Officer, KNNL, Dharwar
11 / Sri.R.S.Kammar / FDA, office of the Chief Accounts Officer, KNNL., Dharwad
12 / Sri.H.Satyamurthy / FDA, office of the Chief Accounts Officer, KNNL., Dharwad
13 / Sri.V.V.Huggi / FDA, office of the Chief Accounts Officer, KNNL., Dharwad
14 / Sri.S.D.Harti / Audit Officer, GRBC, Division No.2, Hidkal
15 / Sri.M.B.Kamble / Audit Officer, GRBC, Division No.2, Hidkal
16 / Sri.M.H.Peerzade / Audit Officer, GRBC, Division No.2, Hidkal
17 / Sri.S.B.Ujjankoppa / FDA, GRBC, Division No.2, Hidkal
18 / Sri.G.B.M.Desai / FDA, GRBC, Division No.2, Hidkal
19 / Sri.D.A.Mudalgi / FDA, GRBC, Division No.2, Hidkal
20 / Sri.K.B.Halkarni / SDA, GRBC, Division No.2, Hidkal

The Chief custodian of money on account of KNNL is supposed to be fully aware of the agreement conditions between KNNL and EPIL and role of the various officers and staff. Yet in this pocess they acted very very negligently and caused the Government enormous loss of money, time and credibility.

9. The role of the Quality Control

The Quality Control officers / officials have done their job as per prescribed rules and submitted their report whenever asked to do so.

10. Responsibility of Engineering Projects India Limited (EPIL).

The EPIL has essentially committed serious lapses in sub letting the contract besides conniving in preparation of false bills and made the Government of Karnataka release the money. The EPIL has conducted itself in a very unprofessional manner and all the Officers from the field upto the Head office are involved and contributed in the misappropriation of the Government funds.

11. Responsibility of subcontractor - BINCO Constructions Pvt Limited.

The sub contractor BINCO Company is also substantially responsible for the misappropriation. BINCO has entered the contract with EPIL as a sub let contractor. The officials of BINCO are equally responsible in committing the misappropriation. BINCO is the ultimate beneficiary of all the Government money released. The Engineers and officers of the BNIP and the KNNL remained blinded about the presence of BINCO against the agreement conditions. The KNNL, BNIP, Chief Engineer, Irrigation North, Superintending Engineer, GRBC Circle, Hidkal, Executive Engineer, GRBC Division, Hidkal have all had the complete information that BINCO is a sub-let contractor against the Agreement Clauses, yet they all remained silent and never everraised the issue.

12. The Officers who assisted the Investigation Officers.

The details of officers and Institutions who assisted the Vigilance, Water Resources Department in carrying out the detail investigations is shown as below.

A.Technical Team

Sl No. / Name / Designation
1 / Sri.N.J.Dharanendra Kumar / Executive Engineer, R&R, Division, Athani
2 / Sri.P.A.Chitnis, / Assistant Executive Engineer, GRBCC Circle, Hidkal Dam.
3 / Sri.P.N.Deshpande, / Assistant Executive Engineer, GRBCC Division No.2, Hidkal Dam.
4 / Sri.J.R.Sannamani / Assistant Executive Engineer, GLBC Circle, Jamkhandi.
5 / Sri.R.N.Kulkarni / Assistant Executive Engineer, Mechanical Sub-Division No.2, Koujalgi
6 / Sri.M.P.Pangi, / Assistant Executive Engineer, HBC Division, Athani.
7 / Sri.Brahmannavar / Assistant Executive Engineer, Malaprabha Project Sub-Division, Bailhongal.
8 / Sri.Nagendra Prasad / Assistant Executive Engineer, Upper Bhadra Project, Adivala.
9 / Sri.M.G.Kulkarni / Assistant Executive Engineer, O/O Chief Engineer, Malaprabha Project, Dharwar.
10 / Sri.R.V.Taalur / Assistant Engineer, CBC Sub-Dvision No.1, Hidkal Dam.
11 / Sri.SM.Madivale / Assistant Engineer, CBC Sub-Dvision No.2, Hidkal Dam.
12 / Sri.C.D.Patil / Assistant Engineer, DP Sub-Division, Nippani.
13 / Sri.U.P.Kamble / Assistant Engineer, GRBC, Sub Division No.14, Mamdapur.
14 / Sri.B.B.Batturu / Assistant Engineer, Mechanical Sub-Division No.2, Koujalgi.
15 / SriN.N.Patil, / Assistant Engineer, MLBC, Sub-Division No.9, Gaddankeri.
16 / Sri.U.R.Kattimani / Assistant Engineer, MLBC, Sub-Division No.9, Gaddankeri.
17 / Sri.R.S.Magadam / Assistant Engineer, HBC Sub-Division No.1, Athani.
18 / Sri.R.M.Hubballi / Junior Engineer, GRBC, Sub-Division No.1, Hidkal Dam.
19 / Sri.N.R.Kulkarni / Junior Engineer, CBC Sub Division, Hidkal Dam.
20 / Sri.M.G.Lingaraju / Junior Engineer, MLBC, Sub-Division No.9, Gaddankeri.
21 / Sri.K.V.Divanji / Junior Engineer, R & R Sub-Division No.2, Ainapur.
22 / Sri.Chandrahasan / Junior Engineer, Upper Bhadra Project, Sub Division, Chitradurga
23 / Sri.Jayadeva Aradhya, / Assistant Engineer, Upper Bhadra Project, Sub-Division No.2, Siddapur.
24 / Sri.Chandrakant / Assistant Engineer, O/o Superintending Engineer, Siddapur.
25 / Sri.Vijay Shetty / Junior Engineer, Sub-Division, Varahi Project
26 / Sri.P.K.Shankar / Assistant Engineer, Upper Tunga Project, Sub-Division No.4, Ranebennur.
27 / Sri.Ramegowda /
  1. , Junior Engineer, Upper Tunga Project, Sub-Division No.4, Ranebennur.

28 / Sri.Prabhakar / Assistant Engineer, Upper Tunga Project, Sub-Division No.5, Haveri.
29 / Sri.Mahmud Mahboob / Assistant Engineer, Bennethora LB Sub-Division, Hebbal
30 / Sri. Vishwanath / Assistant Engineer, Bhima Lift Irrigation, Sub-Division No.2, Afzalpur.

B.Technical Advisor:

  • Sri.S.B.Koimattur, Superintending Engineer (Retired), Dharwar.
  1. Department of Mines & Geology:

1 / Sri.Pati Basavaraj, / Deputy Chief Geo Phycist.
2 / Sri.H.V. Nadagoudar / Senior Geologist.

D.Officers of Karnataka Engineering Research Station, KR Nagar, Mandya:

1 / Sri.T.M.Niranjan, / Chief Research Officer.
2 / Sri.Ramkumar, / Research Officer.
3 / Sri.K.R.Satyanarayan / Assistant Research Officer.

E.Officers of Central Soil and Materials Research Station, New Delhi, Ministry of Water Resources, Government of India.

1 / Sri. Murari Ratnam / Director. Central Soil and Materials Research Station, New Delhi
2 / Sri.N.Shivkumar, / Chief Research Officer, Central Soil and Materials Research Station, New Delhi.
  1. Police Officers of Belgaum District

1 / Smt.Sonia Narang,IPS / Superintendent of Police.
2 / Sri.Suresh Rama Naidu / Deputy Superintendent of Police

13. The Detailed Findings of the Investigation.

The findings of the office of the Inspector General of Police, Vigilance , Water Resources are as in report (Page No.26 to 438) submitted herewith.

14. Recommendations based on the Investigation findings to avoid future misappropriations.

Based on the findings and detailed investigations by the office of the Inspector General of Police, Vigilance, Water Resources Department; the following recommendations are being submitted to avoid lapses in future and to protect the interests of the farmers and save the government money.

IN THE LIGHT OF EXPERIENCE OF BELLARYNALA IRRIGATION PROJECT (BNIP) THE FOLLOWING STEPS ARE FOUND TO BE ABSOLUTELY NECESSARY TO PREVENT FUTURE LAPSES IN ALL IRRIGATION PROJECTS INCLUDING BNIP

The Hon’ble Minister for Water Resources may kindly instruct the concerned to issue a Government Order in this regard to prevent loss of Government Money on Irrigation Projects in Karnataka

Sl. No. / Clauses of PWD Code, Government Orders and Conditions of the Contract / Agreement generally adopted for completion of a Project but seldom respected and observed during execution of the Project / Clauses of PWD Code, Government Orders and Clauses as per BNIP Contract Agreement & violated in BNIP / The nature of the lapse and Disciplinary action prescribed / The process proposed to ensure compliance to the Clauses of PWD Code, Government Orders and conditions of the contract / agreement and overcome these lapses
1 / Duties &Financial responsibilities of Officers:
Chief Engineer – A responsible professional advisor to the Government. He is responsible for all important structural design under executions. He is responsible to investigate any excess over various items of execution. To ensure enforcement of strict attention to the rules concerning the disbursement of money, submission of accounts to avoid financial irregularities. / PWD Chapter-II Clause 9, 12,13 a, 15 a / It is an administrative lapse on the part of Chief Engineer, Superintending Engineer, Chief Accounts Officer and staff have miserably failed in BNIP / 1. The chief Engineer should not be entrusted with works more than 250 crores so that they can do full justice to the Government funds allocated for the works, and supervise each and every aspect of the works till its completion.
2. Any Project which is a time bound and special project should not be handled through general hierarchy of the Irrigation Department. Such Projects where the total work is more than Rs.100 crores, must have a Project Incharge with full authority of a Chief Engineer Cadre and also full accountability till the work is over.
2 / Submission & checking of estimates: No item showing a lump sum provision should be included in the estimate irrespective of the estimate stage itself. If, however the details are not available at the time of preparing the estimate, a lumpsum may be made and immediately after sanction detailed estimate therefore should be prepared and sanctioned by competent authority before the works are executed against such lumpsum provision. / PWD Chapter-III Clause 133 iii / It is an Administration & Technical lapse and all concerned officers on the project to be responsible and liable for disciplinary action & punishment and the contractor shall be liable for being fined as per the agreement. / In such conditions no bills should processed for payment by any office under any circumstances.
3 / Execution of works: No work has to start without proper detailed design and estimate have been sanctioned. Permission granted by Govt does not convey authority to commencement of the outlay. / PWD Code Clause 211 a, b(2) / It is an Administration & Technical lapse and all concerned officers on the project to be responsible and liable for disciplinary action & punishment and the contractor shall be liable for being fined as per agreement. / 1. The office of Executive Engineer, Superintending Engineer, Chief Engineer & Chief Accounts Officer shall be together held responsible for disciplinary action for major punishment.
2. Also a suitable software should be put in place which should not allow the movement of file for sanction until due permission of competent authority / DEEMED APPROVAL is obtained.
4 / Preparation of Projects: Trial pits should be invariably excavated at the site of work and the nature of soil ascertained before preparing the estimates for work. The sections of trial pits and their position should be shown on the site plan of the work, which should also be countersigned by the officer of the Department concerned.
The drawings should show details required and records thereon to be maintained. / 125. a, b, c, 126 (8) / This is a technical lapse. / The Department of Mines & Geology’s expert opinion regarding the classification must necessarily be obtained before preparation of the estimate.
The office of the Executive Engineer shall not process any file where this process is not adopted.
If it is done then the Chief Engineer can take immediate disciplinary action against the Executive Engineer.
However, in case of absolute necessity as considered appropriate the Executive Engineer the work can start subject to ratification by the Department of Mines & Geology (DMG) experts within 30 days of submission of the necessary requisitions. In case the DMG fails to respond within 30 days the Executive Engineer can continue with the work by keeping the DMG informed of each stage of progress in this regard.
5 / Detailed Measurement: All measurements should be neatly taken down in a measurement book measurements should commence with details of executed work and should end with the dated signature of that person making the measurements. / PWD Accounts Code Clause 208 & 209, PWD Code Vol-II – Appex-VII / It is an Administration & Technical lapse and all concerned officers on the project to be responsible and liable for disciplinary action & punishment and the contractor shall be liable for being fined as per agreement. / The photography & videography must be made mandatory. Once all the records are submitted then Chief Engineer should confidentially depute an Officer not lower than the rank of an Executive Engineer to verify the truthfulness of the records before processing the files.
6 / Measurement of Works and Supplies – Use of Measurement Books: In respect of Works Contracts of value more than Rs25 lakhs, the Contractors shall be made responsible for submitting bills duly supported by hard copy of detailed measurements of work using electronic spreadsheets and making computations thereof. The Contractor shall submit diskette/CD ROM in addition to the hard copy;