Work order on Shivaji Memorial revised to dilute conditions on cost

Records show that after a discussion with a secretary in the PWD, certain conditions in the original work order were deleted in the revised work order. The deleted conditions pertain to recovery in case of extra payment made to the contractor for service tax/VAT and regarding not paying the contractor any additional cost incurred at the design stage of the statue.

“The conditions had been originally included to ensure that the project cost does not increase and to keep open the option of recovery,” said an official.

Speaking about the project, Ajit Sagane, the secretary of the PWD, said that conditions regarding recovery of extra payment for taxes had been removed from the revised work order because they were already mentioned in the contract agreement. “So, there was no need to repeat those in the work order. The other condition (regarding cost) was removed because it is likely that the cost of the statue may increase at the design stage,” said Sagane.

When contacted, legislator Vinayak Mete, who heads the project implementation and monitoring committee, refused to comment on the matter. Larsen & Toubro did not respond to an email query sent on October 3. On June 28, the divisional accounts officer had raised objections regarding cost reduction in the project, from Rs 3,800 crore to Rs 2,500 crore, and extensive changes made regarding the scope of work after tenders had been floated. He noted that it is “a violation of Central Vigilance Commission’s guidelines”. He also said: “Cost reduction through negotiation may result in sub-standard work and any reduction in scope of work may impact adversely the project.”

Sources in the PWD said the issues had been discussed on July 24, at a meeting with the project implementation and monitoring committee and Mete had directed the PWD to initiate action against Egis India Consulting Engineers Pvt Ltd, the Project Management Consultant (PMC), if the irregularities were not addressed.

“The PMC has been appointed because we are not experts. The PMC should have ensured that these things were taken care of,” said an official.

Egis, in an email response, referred to the minutes of a meeting held on February 22, in the office of the chief secretary. According to the minutes of the meeting, Egis sought legal opinions, as suggested by the committee headed by the chief secretary at a meeting on February 9, on whether the government can explore the possibility of cost reduction through negotiation with the lowest bidder (L&T). The opinion of Mukul Rohatgi, the former Attorney General of India, and Justice V N Khare, the former Chief Justice of India, was that the government may explore the possibility of cost reduction with the lowest bidder.

The records also show that the senior divisional accounts officer of the Chhatrapati Shivaji Maharaj Memorial Project Division of the PWD had raised several doubts pertaining to violation of guidelines issued by the Central Vigilance Commission in the contract agreement signed by the state with Larsen & Toubro.

In a note dated July 24, the divisional accounts officer had asked why the agreement for such a major project was signed by an executive engineer of the PWD on behalf of the state.

According to the officer, it should have been signed by the “Chief Engineer”. The officer noted that the contract agreement being signed by an executive engineer is a “serious irregularity and violation of tender conditions and against Letter of Acceptance”.

Records further revealed that the contract was, in fact, signed on behalf of the state government by a deputy engineer who was entrusted with additional charge as the executive engineer on June 28. The contract agreement was signed on the same day.

Sources in the PWD said many engineers were uneasy about the contract. “The deputy engineer is not authorised to sign any contract agreement or issue any work order. Only the executive engineer and his seniors are authorised to do so. So, there are questions about the validity of the contract agreement itself,” said an official requesting anonymity.