Delhi Metro, the transport lifeline used by 2.5 million people every day, has come under a cloud for possible corruption in the award of its contracts.
In July, UK’s Serious Fraud Office charged the British subsidiary of Alstom Limited, a French company, with six offences of corruption in transport contracts in India, Poland and Tunisia.
This week, in its filings in a London court, the Serious Fraud Office said the company had paid $8.5 million as bribes, of which $4.4 million, or about Rs 270 million, was paid to win control, signalling and telecommunication orders for Delhi Metro.
The bribes were disguised as payments for consultancy agreements, reported the Hindu Business Line.
The official spokesperson of the Delhi Metro Rail Corporation declined to comment. Alstom India did not respond to Scroll’s queries.
Expanding presence
As early as February this year, The Times of India reported that the UK’s Serious Fraud Office had written to the Central Bureau of Investigation to “verify allegations that two Indians were bribed 3 million pounds" by a company to swing a Delhi Metro contract in its favour. In July, when the Serious Fraud Office filed a criminal case, it became clear that the company involved in the bribery scandal was none other than Alstom.
And yet, this did not come in the way of the company picking up another metro contract in India.
In August, Kerala government awarded the company a contract to supply coaches for Kochi Metro. Alstom had bid the lowest price of Rs 633 crore for supplying 75 metro coaches.
Kochi Metro project is being implemented by the Delhi Metro Rail Corporation. Kerala chief minister Oommen Chandy invited E Sreedharan, the man who headed the Delhi Metro Rail Corporation for 14 years and who is credited with cutting through red tape to complete the metro projects in time, to help with the Kochi Metro project.
Sreedharan was at the managing director of Delhi Metro when contracts were awarded to Alstom.
He was also involved in the planning of Chennai Metro, where Alstom again won contracts.
“Sreedharan’s involvement in every single project where the French company bagged contracts does stand out,” said Sudhir Badami, a Mumbai-based transport analyst. “Though he is a man known for his integrity, sometimes government officials tend to favour companies that deliver or ones who can instil trust and win their confidence.”
Scroll made several attempts to contact Sreedharan for comments but could not get through.
Same company, different phases
In December 2011, Sreedharan handed over the reins of the Delhi Metro Rail Corporation to Mangu Singh, who took over as managing director on January 1, 2012.
That year, the Delhi Metro Rail Corporation awarded contracts for its third phase. Alstom made a bid for those contracts but did not win them.
The company, which now stands accused of paying bribes during the first phase of the Delhi Metro, went on to accuse the Delhi Metro Rail Corporation of non-transparency in the tendering process of its third phase.
In 2013, Alstom went to Delhi High Court, alleging that the Delhi Metro Rail Corporation had violated several guidelines while awarding contracts to the Korean transport company, Hyundai Rotem.
It said that the Delhi Metro Rail Corporation had evaluated only two of the eight bidders for a contract of 81 six-coach trains for the Phase-III of the metro network.
It also claimed that Hyundai Rotem, the company that eventually bagged the contract, sent its bid to the Delhi Metro Rail Corporation even before the tender was announced.
The Urban Development ministry set up a committee to investigate the charges. The committee was headed by R Gopalan, former union finance secretary and VP Das, former chief managing director of National Building Construction Corporation.
The committee found that the Delhi Metro Rail Corporation had not declared the guaranteed energy consumption values at the opening day of the tender, which could have had a massive impact on the financial bidding for the contract.
Ignored by media
In addition, the Delhi Metro Rail Corporation had randomly set Hyundai Rotem’s guaranteed energy consumption values as the baseline without doing the technical evaluation of all eight bidders participating in the tender process.
These findings were not widely reported in the media.
Corruption in the projects built for Commonwealth Games had provoked an uproar in Delhi. But the city seemed to largely turn a blind eye towards allegations of irregularities in metro contracts.
This might have something to do with the success of the Delhi Metro.
“To finish a project on time is a rare sight for people in India,” said Badami. “The Delhi Metro is a world-class facility, offering quality services. The reason people did not pay heed to corruption accusations was perhaps because the project turned out to be better than what they had expected.”
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In July, UK’s Serious Fraud Office charged the British subsidiary of Alstom Limited, a French company, with six offences of corruption in transport contracts in India, Poland and Tunisia.
This week, in its filings in a London court, the Serious Fraud Office said the company had paid $8.5 million as bribes, of which $4.4 million, or about Rs 270 million, was paid to win control, signalling and telecommunication orders for Delhi Metro.
The bribes were disguised as payments for consultancy agreements, reported the Hindu Business Line.
The official spokesperson of the Delhi Metro Rail Corporation declined to comment. Alstom India did not respond to Scroll’s queries.
Expanding presence
As early as February this year, The Times of India reported that the UK’s Serious Fraud Office had written to the Central Bureau of Investigation to “verify allegations that two Indians were bribed 3 million pounds" by a company to swing a Delhi Metro contract in its favour. In July, when the Serious Fraud Office filed a criminal case, it became clear that the company involved in the bribery scandal was none other than Alstom.
And yet, this did not come in the way of the company picking up another metro contract in India.
In August, Kerala government awarded the company a contract to supply coaches for Kochi Metro. Alstom had bid the lowest price of Rs 633 crore for supplying 75 metro coaches.
Kochi Metro project is being implemented by the Delhi Metro Rail Corporation. Kerala chief minister Oommen Chandy invited E Sreedharan, the man who headed the Delhi Metro Rail Corporation for 14 years and who is credited with cutting through red tape to complete the metro projects in time, to help with the Kochi Metro project.
Sreedharan was at the managing director of Delhi Metro when contracts were awarded to Alstom.
He was also involved in the planning of Chennai Metro, where Alstom again won contracts.
“Sreedharan’s involvement in every single project where the French company bagged contracts does stand out,” said Sudhir Badami, a Mumbai-based transport analyst. “Though he is a man known for his integrity, sometimes government officials tend to favour companies that deliver or ones who can instil trust and win their confidence.”
Scroll made several attempts to contact Sreedharan for comments but could not get through.
Same company, different phases
In December 2011, Sreedharan handed over the reins of the Delhi Metro Rail Corporation to Mangu Singh, who took over as managing director on January 1, 2012.
That year, the Delhi Metro Rail Corporation awarded contracts for its third phase. Alstom made a bid for those contracts but did not win them.
The company, which now stands accused of paying bribes during the first phase of the Delhi Metro, went on to accuse the Delhi Metro Rail Corporation of non-transparency in the tendering process of its third phase.
In 2013, Alstom went to Delhi High Court, alleging that the Delhi Metro Rail Corporation had violated several guidelines while awarding contracts to the Korean transport company, Hyundai Rotem.
It said that the Delhi Metro Rail Corporation had evaluated only two of the eight bidders for a contract of 81 six-coach trains for the Phase-III of the metro network.
It also claimed that Hyundai Rotem, the company that eventually bagged the contract, sent its bid to the Delhi Metro Rail Corporation even before the tender was announced.
The Urban Development ministry set up a committee to investigate the charges. The committee was headed by R Gopalan, former union finance secretary and VP Das, former chief managing director of National Building Construction Corporation.
The committee found that the Delhi Metro Rail Corporation had not declared the guaranteed energy consumption values at the opening day of the tender, which could have had a massive impact on the financial bidding for the contract.
Ignored by media
In addition, the Delhi Metro Rail Corporation had randomly set Hyundai Rotem’s guaranteed energy consumption values as the baseline without doing the technical evaluation of all eight bidders participating in the tender process.
These findings were not widely reported in the media.
Corruption in the projects built for Commonwealth Games had provoked an uproar in Delhi. But the city seemed to largely turn a blind eye towards allegations of irregularities in metro contracts.
This might have something to do with the success of the Delhi Metro.
“To finish a project on time is a rare sight for people in India,” said Badami. “The Delhi Metro is a world-class facility, offering quality services. The reason people did not pay heed to corruption accusations was perhaps because the project turned out to be better than what they had expected.”