Tuesday, August 10, 2010

Enquiries Into Indian Rail Freight Corridor

Anti Corruption Body Looks Into Contracts Awarded
Shipping News Feature

INDIA – The country’s anti corruption agency, the Central Vigilance Commission, have had a busy time of late what with investigating alleged irregularities in the preparations for the forthcoming Commonwealth Games in Delhi and today’s success in having legislation to protect whistleblowers passed by the Union Cabinet. Our principal interests however are in the ongoing investigations into deficiencies which have been noted in contracts prepared by the Dedicated Freight Corridor Corporation of India Limited (DFCCIL).

The scope of development for the ambitious rail freight corridor is simply enormous yet the Commission’s investigation into procedures have allegedly revealed that one man, the DFCCIL’s Managing Director, is empowered to negotiate all tenders, with no upper price ceiling. Now Indian Railways, state run owners of DFCCIL, are to conduct their own enquiry into the matter after the CVC apparently found improprieties in contract preparation and insufficiently qualified staff hired to negotiate terms.

The expansive plans to open a dedicated rail freight corridor connecting Mumbai to Delhi and the Punjab and West Bengal are a pet project of the Prime Minister and Railway Minister Mamata Banerjee whose policies we illustrated in February. Ms Banerjee has expressed her disappointment at the slow rate of development and this was subject to an investigation by the PM’s office last month.

With the overall development costs standing at around £ 12 billion according to press reports it is somewhat surprising that a Government appointed finance executive was not shoe-horned onto the DFCCIL board to oversee all aspects of the tendering process.