Realty check

Why ‘the syndicate’ is the construction industry’s worst-kept secret in Kolkata

A cartel, with benefactors across political parties, forces builders to buy materials from them instead of the market at an inflated cost.

Anwar and Mazhar arrived two hours after the appointed time, flushed with exhaustion and a manic energy. They had not slept for two days since the under-construction Vivekanada flyover collapsed in Kolkata. They were flanked by two more men who sidled into one of the shiny sofas of the greasy Silver Grill restaurant on Park Street. “We buried my maami (aunt) this morning,” said Anwar, calmly, placing his helmet on our table. “She was 35 years old. She has left behind two school-going children. She was going to pick them up from school when it fell. We can’t lose this moment. This is the time to expose the Trinamool’s syndicate raj.”

The collapse of the flyover in central Kolkata on March 31 is being seen by not-so-small sections of society as a catastrophic indictment of the Trinamool Congress’ failed development work, and a dead giveaway of the corruption endemic to the rank and file of the party. In the public mind, the chief culprit is the syndicate, a term familiar to those in Kolkata who regularly read newspapers or watch news channels, where stories of the syndicate have been a regular feature for the past three years at least. The details vary but the narrative is the same – developers, architects or even people building their own homes complain that construction is held up because the syndicate is bullying them to buy building materials from them.

An elusive thing

The syndicate comes up most often in the context of New Town – Kolkata’s swank new suburb built on fertile farmlands of Rajarhat that is still in the process of being built – but it exists everywhere in the city. You cannot build in the city without running into it. The most common complaints against the syndicate is that it charges prices higher than the market rate, offers sub-standard quality and cheats on the quantities supplied. In the case of the labour syndicate, the grievances are similar – that they charge higher rates for various categories of labour, including professionals who work as Licensed Building Surveyor engineers.

The syndicate, this Indian Express story explains, is the name given to the cartel of local youth, generally unemployed, who force builders, contractors, architects and home owners to buy building materials from them instead of the market. In this, they have the backing of the locally dominant party, which is usually the ruling party. In a recent sting operation by the TV channel Times Now, the mayor of the Rajarhat-Newtown constituency, Sabyasachi Dutta, claimed that the syndicate comprised members affiliated to various political parties. He listed the Trinamool as being dominant at present, followed by the Communist Party of India (Marxist) and the Bharatiya Janata Party.

The syndicate system, the report notes, was put in place by the Left Front around 1995 when the West Bengal government acquired land in the Rajarhat-New Town area, putting about 250,000 families of poor farmers and landless labourers out of their livelihoods. These were people who did not have much education, or indeed skills that were transferable to the economy of the city. “Whatever else one may say about Gurgaon or Navi Mumbai or Rajarhat, these places are not designed for the poor,” the urban geographer Sanjoy Chakravorty has written. The government – chiefly front-ranking CPI(M) leader Gautam Deb, the housing affairs minister at the time – had then encouraged the dispossessed to supply construction materials to developers constructing projects in the area.

Interestingly then, a phenomenon born out of displacement by the global market took its name from that very market’s terms for illegal activities – mafia, syndicate, cartel, and the underworld. It is, in essence, a nameless entity going by a generic title – countless branches feeding a vast organism – hard to pin down, hard to locate.

The search

How do you meet the syndicate? If we landed up in a sector in New Town looking for the syndicate, there would likely be no signboards identifying its local office. Everyone in Kolkata had heard of the syndicate (everyone in our middle-class, English-media consuming circles), held strong views on the subject, but no one we asked – lawyers, academics, policy wonks, activists and public intellectuals, friends, friends of friends on Facebook and Twitter – had encountered it themselves. It seems that our middle-class circles of respectability never intersect with this netherworld. Even when we are moving into new homes, our interface is solely with realty developers who frequently inform us of delays caused by the syndicate. This indirect interaction too ends when we are handed over possession of a clean flat or house with a clean title, seemingly unconnected to the forcible acquisition of land and its troubled legacy of dispossession.

On a calculated off-chance, we called up our contact in the CPI(M) – that ruled Bengal for 34 years until 2011 – and Mazhar asked: “What do you want to know?”

We fixed a time to meet that evening.

Market bullies

“From top to bottom, the Trinamool is a syndicate,” said Mazhar. “And guess who the queen of the syndicate is,” he asked, arching his eyebrows sharply and grinning. Mazhar is a salaried employee of the CPI(M) and works in the party office. He is a stocky man with a friendly manner and an affectionate sense of humour. He laughs easily and often, especially when he is speaking of the Trinamool. He brought along his friend Anwar, a fair, tall man with a cheeky grin and a hero’s swagger.

On his Facebook page, Anwar describes himself as the proprietor of a firm of realtors and developers. The firm, which buys plots of land and constructs buildings on them, was set up by his father. The family’s bread and butter is, however, an export-import business. Anwar seems to love posting pictures of himself on Facebook. He is often seen dressed in blazers and suits in these photographs. In one photograph, he has posed with a double-barrel rifle and a wide grin. He detailed the inner workings of the syndicate in the manner of a tutor dictating notes. “Take it down in your book,” he said.

“The main thing is the naapi (measurement),” Anwar said. “The cheating is on the naapi, the syndicate typically quotes a little more than the actual dimensions [of the project] and supplies what is needed.” The syndicate also controls the person who is actually in the employ of the builders to report measurements, all the while being nominally in the pay of the syndicate.

The syndicate chiefly deals in construction materials, specifically stone chips, sand and bricks. These do not come packaged with an MRP but nevertheless have a market price. The prices they charge are more or less the same as the market rates, but Anwar reckoned that some crooked Trinamool-backed syndicates might charge as much as 50% more than the market rate. The quality of goods is fairly standardised because contractors or architects return below par materials. The syndicate (usually) accepts this as reasonable.

The organism operates on a three-tiered hierarchy. At the highest level, A, is the left-hand man of the local MLA or MP. This man – as Aravind Adiga wrote in the novel Last Man in Tower – is the one who does all the dirty work, who takes the biggest cut and the biggest risks but leaves behind no traces that may create problems for the person or persons he reports to. At level B are the friends of the left-hand man. And at level C are the friends and cronies of the Bs. The Bs and Cs are the points of first contact with whoever is building a home or project in the area – they ask to speak with the site in-charge. Once the channel of communication has been set up, A enters the picture and sets up the transaction.

In the case of New Town this has been reported to include both the local MP Kakoli Ghosh Dastidar and former local MLA Sabyasachi Dutta, who is now the mayor of the Bidhannagar suburb, the municipal name for the suburban Salt Lake-New Town area.

There are no concessions for government projects. In fact, there is another layer of pay-offs here. Contractors with political contacts win smaller government contracts. “You can fulfill all the criteria but without the contacts, you will not get the contract,” Anwar said. This political contact claims its pound of flesh in the form of kickbacks. Earlier, this was based on profit margin. Now it is based on full tender value. This distinction between earlier and now hinted at something that remains largely unacknowledged in the renewed interest in the relationship between Trinamool and the syndicates – that this system was in place before the Mamata Banerjee government.

There’s also the matter of the kind of tender. Bids for government projects fall into two categories: the L1 and the Q1. The L1 refers to the tender with the lowest price, Q1 is the bid with the best quality of materials. Government projects in Bengal are largely awarded to the L1 category.

The labour syndicates are a Trinamool-era organism, Anwar said. They supply categories of labour ranging from the unskilled to the skilled to those with professional qualifications such as engineers with Licensed Building Surveyor, or LBS, certification. The syndicate gets a cut from the members associated with it, and those affiliated get regular work in return. “They give you a cut-price LBS,” said Anwar.

When the talk came to a natural break, one of us asked Anwar gingerly: What about the stories of the CPI(M) syndicate. Were they true? He didn’t answer right away.

“Of course, we ran the syndicate,” Mazhar said, after a few seconds. “How do you think parties run? After all, we are not dhouwa tulsi pata (washed tulsi leaves).”

“But we ran a neat and clean operation,” Anwar said, drawing a rectangle with his hand. “Trinamool toh has no sar-paer (head or tail). Here, if you take a letter from an MP to a local councilor, the councilor will tear the letter and ask for more money. They all hate each other. There is no unity. In our time, a letter of reference worked. And we spoke nicely to people. We said please. Trinamool people, you know how they behave? They threaten you, ‘Will you buy from us or not’?”

“And we have never killed people like this,” said Mazhar, getting up. The meeting was at an end. “We have to go now, there is a lot of work ahead. There is a political meeting tonight.” As they went down the stairs, Mazhar folded his fingers to mime a phone. “We’ll talk.”

Touchy subject

We found a contact, Arunabh Guha, from the medium-sized realty developer Siddha Group, which has developed projects in Jaipur, Bangalore, Kolkata and smaller cities in West Bengal. The subject of the interview was articulated on Facebook itself, and a time was set for a phone interview. But when the conversation began, Guha drew a deep breath and said: “I don’t think I can help you in this matter. Actually, I don’t think anyone will speak about this.”

He was right. Two real estate development companies in Kolkata – Aashiana Realty and Shivam Realty that have multiple large projects in the greater Kolkata area – were asked if they could tell us more about their experiences, if any, with syndicates. In both cases, we were promised that someone from the company would contact us again, the calls never came.

Similarly, the Bengal chapter of the Confederation of Real Estate Developers’ Associations of India or CREDAI, which is easily the biggest industry body of real estate developers in India, was initially receptive to our query and said it would send us a response via email. When it did not arrive, we contacted CREDAI Bengal again, which is when it said that it had decided against putting out a statement “due to certain sensitivities involved”.

Architect Samira Dutta agreed to speak on the subject only on two conditions – that we did not use her real name, and that we would show her a copy of the report before it was published. She has been working in Kolkata since the mid-1980s, and now works chiefly in interior design. “The truth is that I have always seen this set-up in operation,” said Dutta. “It is not a thing of the new government… The syndicate comprises local suppliers, so we save a little on transport costs. You have to make sure the materials are of acceptable standard, [and] send them back if they are not. They also don’t charge very differently from the market price, but they cheat on quantity. This is a given.”

But it’s the labour syndicates that charge rates very different from those in the market, said Dutta. When she worked on a home in Salt Lake, she took along her own team of carpenters and mistris (skilled labourers), but the local syndicate roughed up her team. “I was paying my carpenter Rs 80 an hour and I had to recruit their carpenter at Rs 140 an hour.”

Uttam Manna, a contractor who works on drain and water pipeline projects for the government, also spoke on the condition that we would not use his real name. “When I start work on a project, I find out the local syndicate and place my order, or send word for them,” he said. He has been working in New Town from the time the suburb started developing in the late nineties, and said that he has always worked with the syndicate. There has been no real change in its functioning. “That is how things work there. People say things were more organised in the CPM days but I can’t tell the difference.”

Manna said that syndicates generally take payments by cheque. These are sometimes in the name of individuals, sometimes in the name of a company, and sometimes in the name of the local club such as ‘Sabuj Sangha’. This seems to suggest that syndicate entities inhabit the IT-monitored economy in India. These might either be tax-paying concerns, or splintered into many shell companies so that none crosses the tax threshold in a financial year. Significantly, in the context of the PanamaLeaks story that broke a few days ago, these illegal concerns seem to operate in the structure designed and policed by the Income Tax regime in India, unlike the off-shore companies placed deliberately outside the country’s tax influence.

While we waited for calls and confirmations that never came, we got an unexpected call. It was Anwar. “I have good news for you,” he said. “Arnab Goswami has made a show on the syndicate. It is very good, watch it, it will answer all your questions.” He was referring to the Times Now sting on Sabyasachi Dutta.

We asked him if he could introduce us to a functioning Trinamool-backed syndicate. “Yes, yes,” he replied, confidently, “Ho jayega (it’ll be done). Call me again tomorrow. But first watch the Arnab programme.”

This was the only call-back we received. In other words, the only affirmation of the syndicate came from the syndicate itself.

All names of individuals have been changed to protect their identities.


Post Script: Media coverage

The first layer of the (media) investigation into the flyover tragedy – in which 26 people were killed as per official figures – has revealed that one of the subcontractors was a firm called Sandhyamani Associates, run by the nephew of local Trinamool MLA Smita Bakshi. This firm supplied labourers to IVRCL, the company with the tender for building the flyover.

A report in The Telegraph on April 5 said that Sandhyamani Associates supplied unskilled labourers at the skilled labour rate. There were also sub-contracts for supplying building materials – the most common form the syndicate takes.

Media reports also suggest that the labourers, who were at the spot of the accident, might actually have tipped off project engineers on the flyover’s instability and design flaws before the collapse. Various initial reports also pointed to serious engineering design flaws, and negligence on the part of the company to follow the mandatory quality assurance plan – issues that are way beyond the ambit of operations of syndicates.

This has to be read in conjunction with the fact that despite such syndicate-supplied labourers as the norm, West Bengal has a disproportionately low rate of deaths owing to collapse of structures among big states, as per National Crime Records Bureau.

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