Express Exclusive: World Bank cries fraud, graft in highways projects


A report prepared by the World Bank's Institutional Integrity Unit has listed "fraudulent and corrupt" practices by private Indian contractors working on national highway projects funded by it, and sought a thorough investigation into the matter.

Contractors paid bribes and gifts, including gold coins, to "influence the actions" of officials and consultants of the National Highways Authority of India (NHAI), says the report dated March 1, 2012.

The finance ministry has sent a copy of the report to the Ministry of Road Transport and Highways. The Indian Express has accessed the report, as well as the letter — dated March 14 — sent by the finance ministry to A K Upadhyay, secretary in the road transport ministry.

In its letter, the finance ministry has asked the road ministry to take "appropriate action in the matter, including getting the matter investigated by an appropriate investigative agency... Action taken in this regard may kindly be communicated to the Department of Economic Affairs".

The report, prepared by Christina Ashton-Lewis, regional team leader (South Asia) of the Institutional Integrity Unit, focuses on six areas of "malpractices". Under the scanner are the World Bank-funded Lucknow-Muzaffarpur National Highway project, the Grand Trunk Road Improvement Project, and the Third National Highway Project.

The deadline for the Lucknow-Muzaffarpur highway, for which the World Bank has provided $ 620 million, is June 2012. The other two projects have been completed.

The contractors in question are Progressive Construction Ltd (PCL) and PCL-MVR JV. Senior NHAI officials told The Indian Express that PCL has been engaged in highway projects across India for decades.

Interestingly, the names of the two contractors also figured in the list of "non-performers" tabled in Parliament by the road transport ministry last year in connection with the National Highways Development Project. However, a November 2011 press release on the subject said that "this (the contractors being declared non-performers) had been revoked in March 2011 after their performance improved".

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