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Centre’s Road Contract in Nagaland Raises Questions of Impropriety in Delhi and UP

A tainted BSP MLA has been given the contract for the Wokha-Merapani road in Nagaland, the terrible state of which has led to local protests.

Uma Shankar Singh and the Wokha-Merapani road. Credit: Twitter/Special arrangement

Uma Shankar Singh and the Wokha-Merapani road. Credit: Twitter/Special arrangement

New Delhi: The Union Ministry for Road Transport and Shipping awarded a multi-crore contract to CS Infraconstruction Limited barely two months after its managing director Uma Shankar Singh, a Bahujan Samaj Party (BSP) MLA, was disqualified by the Election Commission (EC) from the last Uttar Pradesh assembly for procuring that state government’s road contracts in his name.

Singh was disqualified in January this year by governor Ram Naik at the direction of the EC for violating the Representation of People’s Act. Section 9A of the Act states that “a person shall be disqualified if, and for so long as, there subsists a contract entered into by him in the course of his trade or business with the appropriate government for the supply of goods to, or for the execution of any works undertaken by, that government.”

Singh’s disqualification on these grounds was not only the first in UP’s political history, but perhaps also across the country. This disqualification drew attention to the oft-seen trend of state legislators pocketing state government contracts.

An MLA elected from Rasra in Ballia district, Singh, however, has been elected from the constituency to the present house as well in the 2017 assembly elections.

The EC order to the UP governor had come in response to a directive from the Allahabad high court in the course of hearing a petition on the issue. A lawyer, Subhash Chandra Singh, in December 2013, moved a petition before the UP Lokayukta with the complaint that Singh had been grabbing government road projects as a contractor even after being elected as an MLA.

As per media reports, then lokayukta N.K. Mehrotra not only found Singh guilty, but also another MLA, Bajrang Bahadur Singh of the BJP representing the Pharenda assembly constituency in the state’s Maharajganj district, in a similar violation of the Act.

By then, Singh merged his company, Chhatrashakti Construction, with CS Infra, a partnership firm he floated in 2002 and of which he was the “managing partner”. The lokayukta, however, pointed out that though the information about the merger was submitted to the state public works department, the same company continued to carry out road projects and bag new contracts. He referred to road construction work by the company in Ballia, Mirzapur, Allahabad and Sonbhadra – all UP state highways authority projects.

The BSP leader, in response to the controversy, changed his designation in CS Infra from “managing partner” to “managing director”, and continued business as usual. However, the company logo of CS Infra mentions Chhatrashakti Construction and its website also speaks of Singh’s “able direction” in the company.

A proof of business as usual for Singh’s firm came on March 31, 2017, when the National Highways and Infrastructure Development Corporation Limited (NHIDCL), a company fully owned by the Ministry of Road Transport and Highways, awarded it a multi-crore contract.

The contract is for “Rehabilitation and upgadation of (the) Wokha-Merapani Road” in Nagaland.

NHIDCL’s decision may likely fit the technical requirements under the Act (such as issuance of the contract not in Singh’s name but in some company official’s name; that there may be a loophole as he is a state legislator and it is a central government contract) but it certainly raises the question of moral propriety, considering Singh continues to be directly associated with the company while being a legislator, for which he was indicted by a constitutional body.

Also, it is yet to be sorted out whether the salary and the perks enjoyed by him as an MLA have to be returned as the EC disqualified him with retrospective effect. That he continued to bag state highways authority contracts in spite of a pending order by the EC most likely brings it to the realm of legal impropriety too.

Speaking to The Wire, NHIDCL chairman and director (financial and administration) Sanjay Jaju argued, “We go by the information provided by the company while they bid for a contract. We follow the rules set for RST (retail sales tax); we don’t see who owns the company, whether it is by an MLA or MP, etc. The credentials of this company made it eligible for the contract.”

Jaju, however, added, “If someone raises objection to it (in regard to the EC order), we will then proceed accordingly.”

None of the ten road widening and strengthening projects mentioned on the website of CS Infra, are, however, outside of UP, let alone in the northeast, prone to heavy rainfall and landslides. The Wokha-Merapani road is particularly known for annual landslides.

The Wire contacted Singh for his response, but he did not reply.

NHIDCL, according to its contract approval letter signed by Adil Singh, general manager (technical) at NHIDCL, a copy of which is with The Wire, awarded the contract to CS Infra for Rs 47,56,90,000, stating that “the construction period (for the said road) is one year (12 months) from the appointed date.”

However, instead of starting work on its own, CS Infra sub-contracted the NHIDCL project to a local company named Naga Construction.

In a letter dated April 20, 2017, a copy of which is with The Wire, Ravitosh Asthana, vice president (commercial) of CS Infra, informed Naga Construction of the allotment of the sub-contract for “rehabilitation and upgradation of Wokha-Merapani Road” and entering into a legal framework.

Naga Construction owner Hukiye N. Tissica is also a politician. He lost the 2013 assembly polls from Aghunato constituency in Zunheboto district as a Congress candidate, and has recently jumped ship to join the BJP, a partner in the ruling Democratic Alliance of Nagaland government.

However, work is yet to begin on the project, even though the Nagaland public works department handed over the road to NHIDCL a month ago (a copy of the handing over letter is with The Wire). The delay has led to rising public anger as the condition of the road – already in shambles due to heavy landslides – has further deteriorated, hugely hampering day-to-day travel.

The Wokha-Merapani road is a lifeline for people living in that part of Nagaland, as it is the shortest route for communication to Golaghat town in Assam and thereby to the rest of India. The inter-state road is the sole link for the supply of essential goods not only to Wokha town, the third largest in the state after Kohima and Dimapur which is about 73 km from Golaghat, but also to several remote villages in the region.

The road also connects that part of Nagaland to the nearest railway junction, Furkating, in Assam’s Golaghat district. Among other long-distance trains, Furkating is the designated station for the Rajdhani train from Dibrugarh in upper Assam to New Delhi.

“The road has deteriorated over the years. Every year, it is further damaged by landslides triggered by the rains. Last year, the road closed for more than two weeks due to landslides, hampering day to day life and connectivity. The public was happy when the road was taken up by the NHIDCL for widening and upgradation,” said Nagaland geology, mines and border affairs minister M. Kikon.

However, angry at the state government’s silence over the “hue and cry of the public” affected by the road, the district All Commercial Vehicle Association (ACVA) went on a “goods carrier bandh” from August 5-16.

On August 18, in a letter to Kikon, BJP MLA from Bhandari constituency through which the road passes, ACVA demanded “immediate execution of the road construction work.”

Interestingly, the letter, written by ACVA president Y. Bankathing Lotha, also mentioned that in the last few years, ACVA “spent more than 15 lakh rupees voluntarily” to repair the road as it is vital for essential supplies to the area and their business.

Various civil society bodies, who also supported the ACVA bandh, have decided to lift it after an assurance from the state minister that the issue will be looked into immediately. Kikon told The Wire that following the bandh, the state government “did some repair work on the road.”

When asked about the delay in starting the project even though the sub-contract was signed in April, Naga Construction proprietor Hukiye told this correspondent from Dimapur, “I have not been able to begin work because I am unable to furnish the huge amount that CS Infra has asked me to give it as bank guarantee.”

He said, “While usually, only 5% of the total amount of the contract is asked to be furnished as bank guarantee, CS Infra has asked me to pay about Rs 4.5 crore, which no bank is willing to give me for the project.”

Interestingly, the total amount of bank guarantee and performance security sought by NHIDCL from CS Infra is also a similar amount. The NHIDCL letter to CS Infra said, “Further, as per RFP (request for proposal) documents, the contractor for due and faithful performance of its obligations during the construction period shall furnish a performance security by way of irrevocable and unconditional bank guarantee of Rs 2 crore thirty nine lakh fifty two thousand and eight hundred only within 10 days from the date of signing of the contract agreement…the contractor shall along with performance security provide to the Authority an irrevocable and unconditional guarantee of Rs 2 crore eleven lakh and 200 hundred only.”

The NHIDCL formally signed the contract with CS Infra on April 13, 2017.

Hukiye said, “I have informed C S Infra about my decision to get out of the sub-contract for the inability to furnish such a huge bank guarantee, I have not heard since. So I am considering myself out of the contract now. Also, I have heard that someone else is being contacted in Nagaland by CS Infra to do the job for it.”

Attempts by The Wire to reach CS Infra officials in this regard failed.

On August 17, in response to a tweet on the delay in starting the road project by minister Kikon, Jaju replied, “They are ready and would start works once we get the dry spell!!”

Jaju termed “the rains” as the reason for the delay when talking to The Wire as well.

“Now the expected date of starting work on the project is September. We have also changed the earlier appointed date in the contract from April to September. The project will have to be completed in a year from the appointed date,” he said.