The Office of the Inspector General of Police, Vigilance, Water Resources Department Had

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:

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:

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

1. , Junior Engineer, Upper Tunga Project, Sub-Division No.4, Ranebennur.

B.Technical Advisor:

• Sri.S.B.Koimattur, Superintending Engineer (Retired), Dharwar.

1. Department of Mines & Geology:

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

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

1. Police Officers of Belgaum District

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