A Den Of Thieves?

This is the corporation that built the critical Farakka barrage in West Bengal; Andhra Pradesh's Godavari barrage, the longest in the world; the first part of the Calcutta metro; in all, over 120 national projects. Today, it is a basket case with huge accumulated losses ( see charts ). Today, this once-proud corporation is a case study of how the cancer of corruption can eat up an organisation from top to bottom. Workers claim that private contractors rule, despite the fact that the jobs can be done in-house. Chairman and managing director A.N. Jha does not agree. He says that sub-contracting is done only in jobs that he gets under CPWD rules, where NPCC is a project management consultant, in charge of supervising the project and not implementing it. Such jobs, according to him, comprise only 20 per cent of his order book position. But, says S.R. Hussain, general secretary, NPCC Staff Association (NSA): "This claim is not only wrong, it is absolutely wrong. One hundred per cent of the jobs procured by the western region during the current financial year have been sub-let to private contractors on a back-to-back basis." In NPCC's 1995-96 annual report, the auditors noted that provident fund money was being deposited on an ad hoc basis and "there is considerable delay in the deposit of difference between the amount required to be deposited and the ad hoc amount deposited." They also pointed out that the arrears of PF dues as on March 31, 1996 stood at Rs 5.15 crore. This is a criminal offence. Of the 15 seniormost managers, six—H.M. Malhotra (general manager), Rabi Narayan Mohanty (executive director), Shivamoy Ghosh (additional general manager), S.V.S.B. Reddy (deputy general manager), D.K. Sharma (general manager), and N.L. Manchanda (additional general manager)—are facing charges of corruption from the vigilance department and the CBI. Of the balance nine, claim sources, Jha has cleared three: M.R. Goswamy (additional general manager), who was granted voluntary retirement; M. Sharma (deputy general manager), cleared about eight months ago; and S.S.P. Sinha (coordinator), cleared last month. This, employees say, is shady, as only Avinash Chandra, director (engineering), is the competent authority to clear such cases, and the file never reached him. Chandra refused to speak to Outlook . Jha says he has not done anything out of order. On June 13 this year, the unions requested Mata Prasad, secretary, water resources to "stop (the NPCC management from) wasteful expenditure on account of unnecessary transfers." They cited numerous examples of needless transfers. There are two kinds of units in NPCC: working units (WU) and closed units (CU). A total of 115 workers had been transferred from one WU to another; six transfers were done from CU to CU, apparently a totally unnecessary exercise; four workers were transferred from WU to CU, which looks like some sort of punishment posting, since chances of getting paid your salary in a closed unit are very bleak; six workers were transferred from one unit to another, and a replacement brought in subsequently; and there were four cases of transfers of workers to another unit who were brought back—within six months. The financial implications are severe, considering that the corporation spends about Rs 20,000 on each transfer, according to Hussain. NSA alleges that the transfers are being done either to get rid of those not toeing the management's line blindly or for a consideration. In March 1996, the unions had asked P.V. Rangayya Naidu, the then water resources minister, to move workers from closed units to working units. The minister had agreed, and told the CMD to implement the decision. A total of 183 workers were issued transfer orders. But then, Naidu moved on, and since then, this order has been "kept in abeyance". Jha holds a different view. He says that whenever workers are asked to move to sectors like the Northeast, "instead of going to the unit, they go to court." All transfers, says he, are done by the rule book. But the problem is that NPCC, strangely enough, has never had a laid-down recruitment, promotion or transfer policy. These policies have now been developed, but have been apparently pending with Jha for months now for that crucial signature that will make them operative. In fact, NPCC doesn't even have a clear tour and travelling allowance policy. Its manuals have not been updated since 1957, when the corporation was set up. On June 19, 1997, the unions wrote to the secretary, water resources, alleging a "fraud of Rs 45 lakh by CMD Shri A.N. Jha." The CMD, they said, had enhanced the rates of Siddharth Builders, a contractor executing works at the Rajghat Dam Unit, Lalitpur, UP, by 25 per cent. This resulted in a loss of Rs 45 lakh to NPCC. A month later, on July 15, NSA wrote to Shees Ram Ola, minister of water resources. This time the issue was the award of the Indian Oil Corporation, Cuddapah works to private contractors causing a financial loss of Rs 13 lakh to NPCC. And this at the proposal stage itself! K.P Naidu, general manager (finance) wrote: "It is clear that there is negligence and improper dealing at the time of tender estimate." Observed Chandra: "The present proposal cannot be accepted. The executive director may investigate and fix responsibility against the executives who committed this lapse." But Jha went ahead and cleared the deal. NPCC looks no better even after it starts work on the project. On March 10 this year, Telugu daily Eenadu reported a Rs 1-crore scam at the Katheru Quarry in Andhra Pradesh. On January 11, authorities made a surprise check on the mine that had been leased out to NPCC. They found 75 truckloads filled with 412 cubic metres (cm), all set to move to the black market. They also found that of the 68,000 cm of granite that was to come out of survey No 43/6B, a mere 1,903 cm had been extracted. NSA pointed this out to Jha on March 25, and alleges that no action has been taken so far. INDEED, corruption cases peek out of every nook and cranny. P. Ramakrishna, unit officer, Benihalla Unit, is posted in Benihalla but has apparently spent four out of every five days "touring" Hyderabad, his home town. Apparently, he's also run up bills—paid by NPCC—of Rs 27,000 while calling home from his office phone, has claimed Rs 27,000 for taxi travel and Rs 32,500 for entertainment without any supporting vouchers, has been happily living in the office building and claiming HRA and electricity charges. Says Jha: "Documents were called for and have been received from the unit along with their comments. These are under examination." But Ramakrishna could be small fry compared to two other senior NPCC executives. On June 27, 1992, executive director R.N. Mohanty signed a stamped paper that he had "received with thanks rupees one lac in cash from Mr Hari Pasari of M/S Shanti Enterprises, Calcutta, through Mr Satish K. Jhunjhunwala." Jhunjhunwala is one of the owners of JJ Construction Pvt Ltd, a subcontractor of NPCC, and Pasari his brother-in-law. Three years later, at 2.30 pm on May 17, 1995, Pasari filed an FIR against Mohanty at the Tollygunge police station in Calcutta, alleging that Mohanty had "entered into a criminal conspiracy...and represented falsely to the complainant for financial accommodation of Rs 100,000...and on 8-5-95 they forcefully taken (sic) the money receipt from the complainant and threatened with dire consequences." Obviously, somewhere down the line, the deal had soured. The FIR also named additional general manager Shivamoy Ghosh, working under Mohanty. The police filed a chargesheet the same day, but nothing happened for two years. Then in March this year, Tapas Ray, a West Bengal MLA, got on the case. Dissatisfied with Jha's explanations, he wrote: "I have a strong apprehension that... you are purposefully and intentionally harbouring Mr Mohanty for mala fide intentions." Jha claimed that Mohanty says the Rs 1 lakh was a loan, but had no comment about the fact that service rules do not allow Mohanty to take a loan from anyone who has business dealings with the company. Mohanty's bail application has been rejected by both the Calcutta sessions and high courts and an arrest warrant issued in his name in May 1997. As things stand, both Mohanty and Ghosh are not attending office and are still evading arrest. He remains executive director. By the way, on August 2, 1992, Rajalaxmi Das, Mohanty's sister-in-law, deposited a cheque of Rs 50,000 in State Bank of India's Salt Lake, Calcutta branch. The cheque was signed by a director of J.J. Construction. On June 18, Mohanty received goods worth Rs 14,786.30—350 sq ft of white marble slab and 45.5 sq ft of black stone slab—from Sikaria Construction Pvt Ltd. This is what Mohanty wrote on the Sikaria bill: "Bill payable by JJ Construction (P) Ltd." An even more interesting case is that of H.M. Malhotra. He was suspended as general manager (personnel and administration), in April 1986, following corruption charges and complaints from the Ministry of Energy (then the mother ministry of NPCC) that Malhotra had threatened offi-cials who were to give evidence against him. Malhotra went to court, but his pleas were dismissed by every court, including, finally, the Supreme Court. In September, 1987, the CBI, Delhi branch, had filed an FIR (No. RC62/87-DLI) against Malhotra alleging "criminal conspiracy...to cheat NPCC by submitting bogus and forged taxi hire charges bills, and also claimed false TA bills." The CBI raided Malhotra's of ficial and residential premises, and recommended prosecution. In reply to Raj Mangal Pande, MP, on September 10, 1990, Manubhai Kotadia, then minister for water resources, wrote: "Since the CBI has already filed a chargesheet against Shri Malhotra, it became mandatory to continue him under suspension." On September 20, 1990, an office order issued by N.Satyamurthy, the then managing director of NPCC, stated: "Malhotra shall continue to be under suspension until the termination of all criminal and disciplinary proceedings against him." Four years later, on January 28, 1994, V.C. Shukla, the next minister, echoed Kotadia's views. Then, on May 24, 1996, Jyotsna Diesh, chief vigilance officer, NPCC, in a confidential note to then-CMD K.C. Aggarwal, wrote that Malhotra's suspension be revoked—with two important clauses. One, he may be posted out of the corporate office (at Faridabad), so that he does not have any influence on witnesses; two, he should be given a non-sensitive post without financial powers. Aggarwal revoked the suspension. Though, according to rules, an MD can suspend an employee, but cannot revoke the suspension; that power lies only with the board.  In June this year, the new CMD Jha gave Malhotra powers, in addition to a Faridabad posting: "All establishment matters (including recruitment, appointment, absorption, promotion, transfer, welfare, retirement, retirement benefits, disciplinary matters etc) relating to industrial relations category of staff and workmen would be looked after by GM (HRD & IR) i.e. Malhotra. All officers and staff presently looking after these functions would report to GM (HRD & IR). GM (HRD & IR) would decide re-allocation of functions under his charge among the officers and staff as and when felt necessary by him." ISN'T that a powerful and sensitive post? Jha doesn't think so, saying that Malhotra has no access to material concerning his case, and has powers only over workers and not officers. The unions respond that since it is the workers who are spearheading the campaign against Malhotra, those are quite enough powers, thank you. Asks Jha, who says Malhotra is invaluable as an HRD person: "His suspension was already revoked by my predecessor, so should I make him an idle person or should I make him do something creative for the organisation?"  What did Malhotra do when he was suspended? Did he spend the time profitably by turning into a builder/property dealer? A year ago, on September 4, 1996, Anand Tyagi, a villager, complained to R.K. Parsad, superintendent of police, CBI, anti-corruption department, New Delhi, that there were three cases of cheating and fraud against Malhotra. Besides, said Tyagi, there are at least four properties—N-6, N-14, K-1/32 and K-1/37, all in Chittaranjan Park, New Delhi—where Malhotra has developed or constructed houses. And that he has assets disproportionate to his source of income. In the meantime, NPCC wants to shed 1,300 workers, in accordance with the recommendations of management consultancy S.R. Batliboi & Co. Voluntary Retirement Schemes (VRS) are in the air. Jha claims that whatever NPCC earns is first used to pay salaries in the working units, and then, if anything is left over, in the closed units, for obvious reasons. "Do you think I like it that I am leading a company where workers are not getting paid?" he asks. "The point is that I have to run NPCC as a commercial enterprise." But others point out that employees at at least six working units in UP, MP, Karnataka and Manipur have not been getting salaries for two to eight months. In the meantime, corruption has seeped to the bottom of the ladder. A driver turns in bills worth Rs 4.5 lakh for repairs done on one of NPCC's Ambassador cars—twice the price of the car. Matriculates with no technical degree or diploma have been promoted to executive engineer. Now there's a revival package coming, waiting for approval by the government. Although Jha declined to give the figure, Outlook found out that the package is worth Rs 219 crore, including grants, equity structuring and loans. According to the plan, which is basically S.R. Batliboi's, 50 per cent of NPCC's work will be sub-contracted, and for 1998-99, the net loss will fall to just Rs 1.23 crore. But according to other projections, if 60 per cent of the work is done in-house, the corporation will make a profit of Rs 2.79 crore; if 75 per cent, profit will rise to Rs 8.83 crore, and to almost Rs 19 crore if all the work is done by NPCC. Documents available with Outlook show that senior officials have opposed the plan, claiming that "there is not a single contractor who can bring his own complete set of equipment which NPCC can't arrange internally for executing and finishing the job successfully. " In its report, Batliboi cited "lack of control in management, finance and administration, followed by indiscipline, mismanagement, malpractice, and lack of team spirit" as some factors contributing to NPCC's present sorry state. Just where this Rs 219 crore is headed for is anybody's guess. Meanwhile, pray for 1,100 families. They've written to the prime minister on August 28.