The Gujarat High Court on Tuesday issued notice to Gujarat International Financial Tec-City Co Ltd, popularly known as GIFT city, coming up in Gandhinagar on a public interest litigation (PIL) alleging financial and administrative irregularities.
The petitioner, 69-year-old Divyabhash Anjaria, former director of GIFT city, has sought court’s intervention to bring this project under the RTI Act and also under the purview of the Comptroller and Auditor General of India (CAG).
Alleging financial irregularities, Anjaria also sought formation of a special investigation team (SIT) to investigate the financial transactions.
The division bench of Chief Justice R Subhash Reddy and Justice Anant S Dave issued notice to GIFT city and kept the further hearing on March 15.
The PIL was registered on December 18, last year. The petitioner, a retired banker who served as adviser to the central government, claimed that he “presented the concept and plan to develop International Financial Service Park to then chief minister (Narendra Modi) who approved it”.
The petitioner said that despite an estimate that the project would cost around Rs70,000 crore and would be executed on a public private partnership (PPP) model, “no public bids were invited to identify private partner by the Government of Gujarat.”
The petition mentioned that “as the terms that have been finalised with respondent no-2 (Infrastructure Leasing and Financial Services Ltd or IL&FS) apart from 50 per cent share in the profits of respondent no-1 (GIFT city), 1per cent premium on Landed Project Cost that approximately translate to Rs 700 crore, the necessity to widely advertise public bids for identifying private partners to execute International Financial Service Park can’t be over-emphasized”.
The GIFT city, which is being developed as a multi-services special economic zone, is a joint venture of Gujarat Urban Development Authority, a state agency, and IL&FS. The two bodies signed an MoU and have 50-50 partnership in the project. The petitioner has claimed that IL&FS has no authority to appoint a consultant, yet it appointed “Fairwood Consultants Pvt Ltd led consortium as concept and architectural designer for the proposed International Financial Service Park”.
The petition mentioned ECADI and Xian Dai, renowned architectural designer, as “partners of Fairwood Consultants.”
According to petition, “The contract with respondent no-1 (GIFT city) with Fairwood Consultants is not even shown to Board of Directors of Respondent no-1. As it turns out, there is no evidence on record to suggest that ECADI and Xian Dai have ever participated in Gift city project or formed consortium with Fairwood Consultants…”
“Petitioner has, as a chairman of Audit Committee as well as Internal Auditor has on several occasions, questioned payments (Rs176.85 crore) to Fairwood Consultants as no commensurate services were provided by Fairwood…”
The petition alleged that Gift city initiated arbitration to recover the paltry amount and after a couple of years of terminated contract with Fairwood. “Such arbitration is moonshine and effectively, skirts main issue about recovery of fees paid to the Fairwood consultants…”
The petitioner claimed that Gift city mortgaged land leased (for 99 years for token rent of Re1) by the Gujarat government to various public sector banks and raised fund worth Rs 1,100 crore. According to the petitioner, this is burden on public fund since government land was used to borrow money.
The petitioner made Sudhir Mankad, chairman of Board of Directors, GIFT city, as a party claiming that Mankad was appointed as a “director of IF&FS Education and Service Ltd. This company is also one of the service providers of GIFT City. Thus conflict of interest.”