MUMBAI: The Central Bureau of Investigation (CBI) has booked the former chief manager, Jawaharlal Nehru Port Authority (JNPA), and four others, including three firms, for cheating, conspiracy, corruption and causing losses of over ₹800 crore to JNPA. The alleged irregularities are linked to the dredging of navigational channels between 2003 to 2019.
The JNPA had dredged its navigational channel so that larger container vessels could access the port. The dredging project was meant to facilitate higher parcel size of cargo, higher productivity at terminals and higher economies of scale.
CBI conducted searches at the residential premises of certain officers of the JNPA and the consulting company and offices of accused private companies at five places in Mumbai and Chennai, which led to the recovery of a number of documents relating to the Capital Dredging Project, digital devices and documents showing alleged investments made by public servants. The documents recovered are being examined, according to CBI officials.
The CBI registered the case on Wednesday on the basis of the findings of a Preliminary Enquiry (PE) that began in June 2022. The accused include JNPA’s then chief manager S Madabhavi, Tata Consulting Engineers (TCE), Mumbai, its then project director, Boskalis Smit India LLP, Mumbai, Jan De Nul Dredging India Private Limited, Chennai, and certain unknown public servants and private persons.
Despite several attempts, HT could not reach either the persons or the firms named in the FIR for their comment.
The PE was initiated to look into allegations of complicity between port officials of JNPA and the private companies that CBI says led to inflated estimates, restriction of competition in order to extend undue favour to some international bidders, and suppression of reports of independent experts/organisations.
The PE also examined allegations of pecuniary advantage obtained by the named private companies as a result of JNPA officials’ connivance, resulting in wrongful loss to the exchequer from the period between 2003 to 2014 (phase-l of the project) and 2013 to 2019 (phase-2 of project).
“During the course of the PE, the criminal conspiracy between JNPA officials and private parties that caused wrongful losses to JNPA amounting to ₹365.90 crore in phase-1 and ₹438 crore in phase-2 also surfaced,” says the FIR.
JNPA is one of the 12 major ports in India and shares a common navigational channel with the Mumbai port for a substantial part of its length. In order to handle large-sized cargo ships, JNPA had asked a private company to prepare a Detailed Project Report (DPR) in May 2003 on increasing the depth of the navigational channel.
Pursuant to the DPR, dredging work was executed in two phases—the first from 2010 to 2014, and the second from 2012 to 2019, according to the officials.
For phase 1, TCE in association with a separate entity allegedly prepared a final report on planning the dredging activity in December 2010. TCE was also allegedly awarded the work of Project Management Consultant (PMC) for the said project including preparation of the tender documents and the work of supervising execution of the work.
The tender for dredging in phase 2 to accommodate 15-metre draft vessels was allegedly awarded to a joint venture of Boskalis Smit India LLP and Jan De Nul lndia Pvt Ltd in March 2017 for ₹1,963.17 crore and the project was completed in March 2019. The said contract was made allegedly with the provision of progressive payment on the basis of a verified progress report to be submitted by Tata Consulting Engineers. For the executed work, payments of around ₹1,522.33 crore were made through 11 bills raised by the contractor, according to the CBI.
Madabhavi and other suspects, including TCE’s then project director, are under the scanner over the project’s commencement only from 2010 following a significant delay of 7 years from the time of the preparation of the DPR in May 2003, without proper assessment of prevailing dredging requirements.
The FIR further alleged that prior to the approval of the phase l by the Project Investment Board, a note was put up to the JNPT board on December 21, 2010, saying that phase 1 and phase 2 would be taken up separately. But, in fact, the planning and implementation of the two phases overlapped each other, violating guidelines of the Competition Commission of India.
In order to favour certain foreign bidders, JNPA officials along with the PMC kept the ‘continuous dredging condition’ in the tender document for phase 2 and allegedly did not permit demobilisation and remobilisation of dredging vessels in monsoon period.
“However, soil dredging was actually made with delay after the passing of the monsoon period. Thus, such deliberate acts were committed to extend undue favours to the foreign contractor,” the FIR said.
“It was alleged that during the maintenance of dredged channels in phase I of the project, JNPA made excess payments aggregating ₹365.90 crore to the contractors against claims raised for over dredging of channels,” said a CBI official. “However, in phase 2, which overlapped with the maintenance period of phase I, JNPA made an additional excess payment of ₹438 crore to the contractor, showing that no over dredging was done in phase I or maintenance period thereof,” the official said.