The Commerce Ministry has sought a Central Bureau Investigation (CBI) probe into irregularities committed by Santacruz Electronics Export Processing Zone (SEEPZ) authority in giving ₹74.85 crore worth construction related contract to a company without open bidding in 2017.

As per Commerce Ministry’s directions, “Matter of nomination of NFCD (National Co-operative Construction and Development Federation (NFCD) of India Ltd) has been forwarded to CBI for a detailed investigation,” noted SEEPZ (SEZ) Authority in its 56th meeting held on November 11, this year, under chairmanship of joint development commissioner CPS Chauhan.

NFCD

The NFCD is an agency registered under Multi State Co-operatives Society Act 2002, Department of Agriculture and Co-operation, Agriculture Ministry. The Authority was informed that there were irregularities in the nomination of NFCD and violation of GFR (General Financial Rule) provisions which was an audit objection and included in the Comptroller and Auditor General (CAG) audit report of 2019, stated the minutes of meeting.

Contract sanctioning issue

The irregularities in the SEEPZ is alleged to have been committed during former Development Commissioner Baldev Singh’s regime. Singh’s appointment as Chief Electoral Officer of Maharashtra in 2020 before his retirement had become politically controversial on the grounds that corruption took place during his stint which he had, however, denied.

In February 2017, the SEEPZ Authority had awarded the works of structural repair and allied civil works and water proof treatment to NFCD amounting to ₹74.85 crore. The contract was given to NFCD without inviting tender and ignoring even the fact that it did not figure in the list of agencies notified by Ministry of Urban Development(MoUD) for carrying out construction related work, CAG reprimanded in its Department of Revenue –Customs (Compliance Audit) Report of 2019.

Advance payment of ₹56.14 crore was made to the NFCD upto December 2017.

In another instance of corruption that is under the CBI glare is that the SEEPZ Authority had approved an expenditure of ₹40.48 crore including five per cent contingency for structural repair and allied civil works of Standard Designed Factories (SDF) buildings and Gems and Jewellery buildings. But, NFCD was issued work order in February 2017 for ₹44.58 crore which was ₹4 crore more without the concerned approval.

Further, an additional amount of ₹7.77 crore was sanctioned for structural repairs without approval of the Authority, revealed the audit findings.

‘No MoU signed’

Disaster Management Advisor (DMA) of the Authority had inspected in November of 2017 all the structural and waterproofing works of SDF and Gems and Jewellery buildings completed by NFCD’s contractors. “They submitted inspection report highlighting major structural discrepancies in all the buildings which included defective columns and beams and incomplete work. Though the Authority had taken up the matter with NFCD several times to rectify the deficiencies, no action was taken by NFCD till the date of audit. Since no MoU was signed between the Authority and NFCD and no Bank Guarantee (BG)/Performance Guarantee (PG) was taken, Authority could not enforce action against NFCD,” the CAG had critically observed.

The irregularities in awarding of contract for major works indicated serious deficiencies in the financial management of the Authority for which responsibility needs to be fixed, the CAG report concluded.

Related Topics