Road To Death

The suicide by a Malaysian consultant involved in a highway project threatens to blow the lid off a scam that involves many politicians and bureaucrats

PICTURE SPEAK

BUMPY RIDE: The project is running behind schedule and cost overruns are likely to take a heavy toll

The death reveals the deep abyss in which KSTP, implemented by the state Public Works Department (PWD), has fallen in the past four years. Corruption and nepotism have pushed the cost to double the original estimate and its completion has been delayed by over two years. While the total project cost is expected to cross Rs 3,000 crore, the state government's share will now go up from Rs 338 crore to Rs 2,000 crore. "There appears to have been a conspiracy involving politicians, bureaucrats and contractors in this project to deliberately delay it and increase its cost", says Chief Minister V.S. Achuthanandan.

SPEEDBREAKERS

The project was originally expected to cost Rs 1,600 crore. It is now likely to cost Rs 3,000 crore with the state's share going up from Rs 338 crore to Rs 2,000 crore. Contract was signed in 2002 without acquiring any land for road construction when World Bank stipulates that 30% of land should be acquired before a contract is awarded. Though the Government was responsible for the delay in land acquisition, money was withheld from the company for slow pace of progress. While corruption is undoubtedly one of the factors, others say it is partly due to the state PWD's inability to understand the intricacies and conditions of international contracts.

Successive state governments seem to be the real culprit. They failed to acquire and hand over the required land-a difficult task considering that the density of population here is the highest in the country. It now transpires that the contract was signed by the UDF government in 2002 without acquiring even an acre of land though the World Bank stipulates that 30 per cent of the land should be acquired before a contract is awarded. Kerala Finance Minister Thomas Isaac blames M.K. Muneer, the PWD minister in the last Congress-led government for the cost and time overruns, but Muneer retorts that the tender was finalised by the communist-led government that ruled the state from 1996 to 2001.

Of the entire project, PATI-BEL was contracted to do a 128-km stretch, a major chunk of which falls in Thiruvananthapuram and Kollam districts-a deal worth Rs 216 crore. Till date, about 60 per cent of the work has been completed while the company has been paid only about Rs 70 crore.

To top it all, the project's international supervising consultant was changed abruptly in 2005. The first consultant, RITES-BECA-WSA-a consortium headed by rites, Auckland-based BECA and Ottawa-based WSA-had come down heavily on the contractors for the delay. It had maintained that even after 90 per cent of the land was handed over to PATI-BEL, the project was running way behind schedule. But in 2005, the KSTP Steering Committee replaced the rites consortium with Paris-based BCEOM. Interestingly, BCEOM took a diametrically opposite view and put all the blame on the government for the delay.

KSTP sources say that imposition of damages on PATI-BEL would have meant termination of its contract. "Who would have finished the work then? What about the wrong message it would have sent in the international market about Kerala?" asks a KSTP official. Pillai, however, says that since it was the government which was at fault, penalising the company for the deal would be wrong. "The Dispute Redressal Board in KSTP has, hence, said that the imposition of damages would be infructuose," he adds.

The state government now says that the contract based on FIDIC (International Forum of Consultant Engineers) stipulations was heavily in favour of the contractor. Some feel that although corruption could have been a factor, the state PWD's inability to understand the intricacies included in such international contracts was the cause for the mess. But clearly the state government cannot say it was not warned of the impending crisis. On October 19, Pillai had written to the government that the company would be forced to stop work if the pending bills were not cleared. "The project is on the brink of a catastrophe and we appeal...to do justice and execute this work for the benefit of the people of Kerala..." Sadly, the fears expressed in the letter turned out to be true. The catastrophe struck when Lee, unable to cope with the unorthodox ways of business in India, committed suicide.

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