Vidarbha: Insatiable and Corrupt

While farmers suffer and their parched land craves water, most irrigation projects in Vidarbha worth thousands of crores of rupees have turned into gigantic scams

It is telling when thousands of crores of rupees are spent on irrigation projects and yet the irrigation potential of a region increases by only 0.1 per cent in a decade. In Vidarbha, a criminal nexus of certain elected representatives and officials is siphoning off money that is meant to protect farmers from committing suicide. Many others who saw this as a lucrative opportunity and entered the arena as petty contractors are also at the receiving end with debts that have turned their lives upside down. “In other departments there are contractors of projects, but in the irrigation department there are projects of big contractors,” says Wamanrao Kasawar, Congress MLA of Wani.

Many in Vidarbha believe that it is a criminal conspiracy by the power centres in Western Maharashtra to keep the region in a perennial state of distress. This is a violation of the ‘Nagpur Pact’ which paved the way for Vidarbha’s inclusion into Maharashtra.

The dubious dealings of Ajit Pawar

Mobilisation/machinery advance refers to any payment made in advance to contractors to help start their work. The central government’s PWD manual says that mobilisation advance should be given under special circumstances and the contractors should be charged interest for the advance. However, the Vidarbha Irrigation Development Corporation (VIDC) ignored all these provisions and went ahead with providing mobilisation advances worth crores to rupees to a few contractors. Despite the fact that official circular in March 2000 prohibited any kind of advances in the tender documents, the VIDC gave mobilisation advance to the tune of Rs 614.46 crore to a handful of contractors.

 The Wadnere Committee and CAG report of 2012 on irrigation projects highlighted the fact that undue benefit was given to contractors in the garb of mobilisation advance. The Wadnere Committee also mentioned that the approval for these advances came from AjitPawar and the ex-officio chairman of VIDC between 2007 and 2009. The contractors who benefited from these advances were all politically connected and considered close to Pawar. These include SMS Infrastructure Limited, owned by relatives of BJP MP Ajay Sancheti (apparently a close aide of NitinGadkari), and its joint ventures, and the Bajoria Construction Company of SandeepBajoria, among others. Sancheti was the biggest beneficiary, receiving advances to the tune of Rs 815.0298 crore for six different projects under VIDC, as per
official reports.

The central PWD manual prohibits payment of any advance in most cases, but allows it to the extent of 5 per cent under extraordinary circumstances. No such rule was followed and advances were paid to the tune of 20 per cent to certain contractors. The rate of interest was way too low. When the CAG raised the issue with the Maharashtra government, the audit body was informed that considering the initial investment and purchase of material/machinery, huge advances were paid to the contractors in the interest of projects. Ironically, there have been many projects where the contractors availed of the mobilisation fund but did not start any work. This is a clear violation of rules and regulations.

The VIDC granted these advances at the behest of the then executive director, DP Shirke. He reportedly acted under the orders of Pawar. After the official circular of March 2000, no advance was paid till 2007. It all gathered momentum post-2007. Citing these irregularities, an upright BT Redkar, Deputy Secretary, Irrigation Ministry, issued a circular on April 16, 2008, mentioning that the clause of mobilisation advance should not be included in the tender document. It also mentioned that disciplinary action would be taken against those who choose to indulge in such misappropriation.

Later, Pawar was made aware of circular and, on May 14, 2008, his private secretary wrote a scathing letter to Redkar, asking him to withdraw it. In his letter, the secretary wrote, “As per the directions of honourable minister, his permission must be taken before issuing any such circular. The minister has directed to scrap the circular.” Even the Wadnere Committee revealed that there was no clause for grant of mobilisation fund in the tender document and mentioned that the contractors got the advance at the behest of the VIDC chairman.

Meanwhile, under tremendous pressure, the state government has initiated an inquiry and suspended 45 VIDC officials, including Shirke. However, there is no clarity on how the government will deal with what locals say are the brazenly dubious dealings of Pawar. 

Take the case of the Aakpuri Project in Yavatmal district wherein the irrigation department wasn’t even aware of where Aaakpuri was. NCP MLC Sandeep Bajoria, one of the prosperous and influential contractors of Vidarbha, did a survey, zeroed in the site and then named it Aakpuri. “Some of the people whose land was to be acquired for the project did a study of the project and realised that the land being acquired for the project was more than the area that would be irrigated by the project,” says Kasawar.

Bajoria is one of the few contractors who have hugely benefited from irrigation projects in Vidarbha under Ajit Pawar’s stint as the irrigation minister from 1999-2009. These contractors, with the help of their political bosses, pocketed thousands of crores of rupees while politicians across the spectrum maintained an eerie silence over this looting that was meant to make crisis-ridden Vidarbha a water-surplus region.

Meet the Crorepati Contractors: Ajay Sancheti

Among the biggest beneficiaries of irrigation projects in Vidarbha is BJP MP Ajay Sancheti. He has bagged contracts worth thousands of crores of rupees during AjitPawar’s tenure as the Irrigation Minister of
Maharashtra. Considered to be close to BJP president NitinGadkari, Sancheti has gained political legitimacy and was successful in
getting  himself nominated as a RajyaSabha MP. Gadkari lobbied hard for Sancheti’s  nomination.

“It is a well-known fact that Sancheti was made a RajyaSabha member after Gadkari lobbied really hard within the BJP. To push forward Sancheti’s case, Gadkari ignored VinaySahastrabuddhe, member of the party think-tank. A favourite among working committee members, Sahastrabuddhe had to make way for a wealthy Sancheti at the party president’s behest,” says a senior BJP leader in Nagpur. Sancheti’s name also figured in the Adarsh scam, as well as in the Coalgate scam.

Serious allegations have been levelled against him, including the charge of committing fraud by bagging eight irrigation projects using the old and new name of the same company. According to official reports, till November 28, 2005, Sancheti’s firm was listed under the name of Shantikumar M Sancheti Limited; then, on the same date, the company received a new Certificate of Incorporation after the change of name to SMS Infrastructure Limited. On September 25, 2006, the change of name was duly reported to VIDC. According to law, once the name of the company is changed, the older one is scrapped. However, flouting all rules, the company continued to use the old name and entered into a joint venture with SN Thakkar Constructions Private Limited and bagged three projects at Gosikhurd.

Sources say Sancheti’s firm and its joint ventures were the biggest beneficiary of mobilisation/machinery advance given by the government, in clear violation of rules; even the CAG has raised this issue in its preliminary report on the irrigation schemes under VIDC. SMS Infrastructure and its joint ventures received six projects with a tender cost of Rs 815.0298 crore while Rs 113.4213 crore were paid as advance. This was 13.91 per cent of the total cost — a clear violation of regulations.

The tender documents did not mention the mobilisation advance to contractors. Even the central PWD manual says that only 5 per cent of the money can be paid in extreme circumstances. The joint venture of ShaktikumarSancheti and SN Thakkar reportedly received 20 per cent advance in Gosikhurd. In the Gosikhurd and Lower Penganga projects, SMS Infrastructure received the advance twice; it received Rs 50.7441 crore as mobilisation and machinery advance in Gosikhurd. The advance paid was to the tune of 20 per cent — flouting all government norms.

“The system in Maharashtra is such that projects are given to select contractors with the consent of ministers. Basically, contractors aligned with the ruling party are given the project. Everything is fixed. These contractors sit with officers and profit is discussed. Accordingly, the budget of the project is increased. For example, if a project is of Rs 100 crore, they will increase it to Rs 500 crore for their profit. In Vidarbha, tenders are floated, contractors quote a much higher price, their tenders are accepted and the changes in the original tenders are done at the behest of powerful individuals,” says Hansaraj Aheer, BJP MP from Chandrapur.  

Aheer cites Gosikhurd Dam as a testimony to this looting. The project cost has been increased multi-fold in the last few years. “The project should have been completed with Rs 500 crore but now the cost has been escalated to Rs 15,000 crore. I have doubts about the cost of the project and I know for a fact that contractors have pocketed thousands of crores from this project,” he says.

Interestingly, BJP President Nitin Gadkari also lobbied for these contractors and sought funds. On July 30, 2012, in his letter to (then) Union Water Resources Minister, Pawan Bansal, Gadkari wrote, “The project works are in full speed. Due to non-payment of their dues the contractors stop their work. This may delay the project and would also result in time overrun and delays in creation of irrigation potential. Presently, liability of about Rs 400 crore is pending. It is requested to recommend the project to receive funds of the year 2011-12.”

Gadkari turned a blind eye towards the reported misappropriation of funds and continued to lobby for his favourite contractors — BJP MP Ajay Sancheti (apparently close to Gadkari) and BJP MLC Mitesh Bhangdia. Gosikhurd has been marred by controversies and several government agencies and non-government organisations have raised objections over the modus operandi of these contractors and Vidarbha Irrigation Development Corporation (VIDC) officials. The letter created a political storm. Political parties and sections of media jumped into the controversy and attacked Gadkari for his alleged involvement with the contractors. There are also other scams which show Gadkari reportedly got land from Ajit Pawar for his NGO and that he has several benami companies spread all over Maharashtra. Gadkari claims he is a “social entrepreneur”.

Sanctioned in 1983 by Rajiv Gandhi, the Gosikhurd project has yet to achieve its objective of providing water to farmers in Vidarbha region of Maharashtra. Originally pegged at Rs 372 crore, the project was aimed at irrigating 2.50 lakh hectares with the help of a right and a left bank canal and four lift irrigation schemes. However, even 24 years after its conception, the project is far from completion and the cost has escalated to a whopping Rs 13,826 crore; close to Rs 7,000 crore has already been spent. Activists allege that the project cost could go up to Rs 20,000 crore.

Meet the Crorepati Contractors: Mitesh Bhangdia

Another contractor-cum-politician with huge stakes in irrigation projects across Vidarbha is BJP MLC MiteshBhangdia, also considered close to Gadkari. A petty contractor, Bhangdia’s rise to massive prosperity has always been viewed with suspicion. In recent times, Bhangdia has amassed contracts worth Rs 500 crore. He was made the BJP MLC of the Wardha-Chandrapur-Gadhchiroli region in June this year.

In 2010, after repeated complaints from farmers and activists, the state government decided to constitute the HT Mendhegiri committee to probe the irregularities. The committee’s report made scathing attacks on Bhangdia’s company, MG Bhangdia Infrastructure, for its shoddy work on the 22.93 km left bank main canal of Gosikhurd.

Several other committees have also made similar observations. They concluded that the substandard work on the dam was done in connivance with irrigation officers. Bhangdia’s firm had completed the work on the left bank canal in approximately two years, costing Rs 36.32 crore. After the findings of the committee report were conveyed to Bhangdia, he agreed to rebuild the left canal.

However, only a four-km stretch of the canal was demolished and the work has started only recently. “If Bhangdia didn’t have political clout he would have been blacklisted or even jailed. Even while repairing the canal, he has used substandard material,” says Praveen Mahajan, a whistleblower in Nagpur. 

Despite such massive expenditure, the total irrigation potential created by Gosikhurd till March 2011 is a paltry 34,022 hectares. Locals in Nagpur allege that the water stored in the dam is so polluted that it is not fit for even agricultural use. “The entire sewage discharge of Nagpur city is being released into the dam, making it unfit for agricultural use,” says a top government official in Nagpur.

Even the CAG report tabled in the Maharashtra assembly in 2008 commented on the irregularities in the Gosikhurd project. The report pointed out that Rs 11.5 crore was illegally given to the contractors as mobilisation advance — loan provided to contractors to start work.    

Another report on the project by retired bureaucrat Nandkishore Vadnere in 2010 pointed out cost escalation by contractors. The committee found that the estimated cost of the 90 tenders was randomly hiked, flouting rules and regulations. On June 25, 2010, the then chief engineer, HT Mendigiri, brought out another report mentioning that there were cracks in the left bank canal of the Gosikhurd project. The Mendigiri Committee said that the cracks were due to poor quality of lining and insufficient and improper curing of concrete. “Both the reports were tabled at the last minute on the last day of the winter session of the assembly in Nagpur and hence no discussion could take place on the issue,” says Karthik Lokhande, Chief Reporter, Hitavada, based in Nagpur.

The Lower Penganga project was branded as the most viable project. It was touted that it will provide relief to thousands of farmers in Yavatmal, Chandrapur and Adilabad. The project was in limbo since 1997. Suddenly, before the 2009 assembly elections, Ajit Pawar decided to revive it. Tenders were reportedly given in a single day to a handful of contractors at much higher rates and the cost of the project was increased by 643.66 per cent from Rs 1402.43 core to Rs 10,429.39 crore.

Here too, reportedly, Sancheti bagged contracts worth Rs 3,210 crore while the rest were awarded to NCP MLCs Sandeep Bajoria and Satish Chavan, Pune-based contractor Avinash Bhonsle, close to Pawar, and Shaktikumar Sancheti of the Sancheti family. “Tenders worth Rs 8,000 crore for the canals were floated even before the project took off. Contractors were fixed and advance was also paid,” says Kasawar. The project was meant to irrigate 2.27 lakh hectares; 15 years since its inception, water is yet to reach a single farmer.

Similarly, irregularities were found in the Dhappewada Lift Irrigation Project that was conceived to tap the spillover of 62 tmc of water from the Gosikhurd project for upstream utilisation. The tender was issued for Rs 241.10 crore while the contractor (SOMA. owned by Avinash Bhonsle and Shaktikumar Sancheti) quoted Rs 335.02 crore. The tender was accepted despite the fact that it was 38.95 per cent higher than the original tender. Interestingly, in the tender document, it was mentioned that no work should start till environment clearances were acquired. However, SOMA wrote a letter on February 12, 2009, saying that they were ready to work at their own risk.

“The same day this letter reached the executive engineer’s office in Tiroda (Gondia) and was signed by the general manager of VIDC. The executive director of VIDC signs the letter on the same day. I fail to understand how a single letter could be sent to so many places in a single day. Interestingly, the work on the project too started on the same date. Later, Rs 216 crore was paid to SOMA by the government and since this was Praful Patel’s village no one raised any objections. However, the environmental clearances didn’t come for the next three years while they continued with the work,” says Praveen Mahajan, an RTI activist.

Such irregularities are a common phenomenon across irrigation projects in Vidarbha. On May 5, 2012, Chief Engineer Vijay Pandhre wrote to Chief Minister Prithviraj Chavan, alleging that close to Rs 35,000 crore out of the total Rs 70,000 crore was swindled by a nexus of politicians, bureaucrats and contractors during  Pawar’s tenure as irrigation minister. The letter created a furore and eventually compelled Pawar to step down as the deputy chief minister of Maharashtra. But the damage had already been done. “While Pawar allotted new projects, bureaucrats gave clearances and contractors shared the contracts. These contractors were close to Pawar and paid a certain percentage of this loot to the NCP heavyweight. This was the root cause of the monstrous irrigation scam that runs into thousands of crores in VIDC,” says Kasawar.

Meet the Crorepati Contractors: Sandeep Bajoria

Named after Jawaharlal Darda, Darda Nagar in Yavatmal is famous for its rich and powerful. Locals say that every politician, businessman and contractor worth his salt has a bungalow in this affluent zone. Two palatial bungalows that stand out belong to the Dardas and NCP MLC SandeepBajoria. While the Dardas, involved in the coal scam, built their empire over the years. Bajoria’s success has been recent. A petty contractor, Bajoria’s closeness to Pawar is considered to be the magic wand behind his rags to riches story. In 2010, Pawar helped Bajoria become an MLC from Yavatmal. 

Says a senior Congress politician who inhabits the prosperous neighbourhood: “Till 2006, Bajoria was a nobody. He used to sleep on the floor on a mat in Congress leader Sanjay Deshmukh’s room in Mumbai’s MLA hostel. Today, he is floating in luxury. His mobile phone apparently costs Rs 3.5 lakh. He doesn’t buy lockers to store his money, he buys flats. The question is, how did a man who was sleeping on the floor gain this kind of huge wealth and political clout in such a short time?”

In 2009, Bajoria was given contracts worth Rs 820 crore in projects like Lower Penganga, Bembla, the Jigaon lift irrigation project in Buldhana and the Lower Pedhi project in Amravati district, among others. Just like Sancheti, he too received crores of rupees as mobilisation advance from the government. Indeed, after the allegations, a tender worth Rs 532 crore was cancelled.

An eerie silence greeted us at the VIDC zonal office in Yavatmal. Official documents reveal the cost of irrigation projects was inflated and approvals for new projects given in a hurried manner despite the older projects being still not fully operational. The cost of 38 projects in Vidarbha was escalated by 300 per cent from the original cost of Rs 6,672 crore to Rs 26,722.33 crore in a span of seven months. Shockingly, 30 projects out of 38 were given approval in just four days in 2009 — June 24 (10 projects), July 7 (5 projects), August 14 (11projects) and August 18 (4 projects). Also, the cost of 6 projects went up by 33 times while in 12 cases the estimates doubled. 

In 1960, when Vidarbha was included in Maharashtra, it was promised that there would be overall development and funds would be allocated. Predictably, the promises were not kept and Western Maharashtra remained the power centre of all financial activities. Hence, several projects in the east remained in a limbo with no funds to start any work. Hence, the ‘Net Present Value’ of these projects kept escalating while money was being diverted from Vidarbha to the Krishna Valley. Ajit Pawar took over as the irrigation minister in 1999 and declared that he would revise administrative approval of these projects.

On December 15, 2001, the then Governor, PC Alexander, issued directives that work backlogs in Vidarbha, including irrigation projects, should be provided adequate budgets. “When money came to Vidarbha, there were very few Class I contractors in the region and that is when contractors from Western Maharashtra were brought here along with officers from Pune,” says Mahajan.

In 1999, after the Congress-NCP dislodged the BJP-Shiv Sena regime, the first session was held in Nagpur. The government published a White Paper on several projects. “At that time, VIDC had a corpus of Rs 900 crore and the government had the mandate to spend the money. This is the time when the cycle of looting started. Between 2006-2010, close to Rs 30,000 crore was pumped into Vidarbha. It led to a lot of infighting among contractors, since everyone wanted to be part of this plunder. So, every contractor worth his salt wanted to be a part of VIDC,”
explains Mahajan.

A rain-fed region, Vidarbha’s agrarian economy is dependent on rainfall. Erratic rain in recent years  has taken its toll on farmers. Hundreds of farmers have committed suicide in Vidarbha in the last decade. Hence, to boost agriculture, the government initially launched 10 irrigation projects, dams and canals, to provide yearlong supply of water to the farming community. In 1997, the government estimated the cost of these 10 projects at Rs 4,430 crore. It needed an additional Rs 9,631 crore for future projects. With limited budget, these projects would have taken 15 years to complete. It was then that the state government decided to supplement the budgetary support through open market borrowings.

The state government created VIDC in 1997, under the Vidarbha Irrigation Development Corporation Act, to generate monetary support. Eventually, the 10 ongoing projects were handed over to the corporation while 86 new projects were transferred in 1998, 141 in 2007 and 83 in 2008. In 2009, there were a total of 320 irrigation projects in the region.

Meet the Crorepati Contractors: Satish Chauhan

Another rising star is SatishChauhan whose phenomenal growth is also attributed to  Pawar. A small-time contractor like Bajoria, under the patronage of Pawar he too received contracts worth Rs 476 crore via VIDC in 2009.  He has stakes running into crores in Marathwada and other regions of Maharashtra. He was made NCP MLC at the behest of Pawar.

The total cultivable area in Vidarbha is 57.03 lakh hectares and the estimated irrigation potential stands at 22 lakh hectares of which the government had created irrigation potential for 7 lakh hectares before the formation of VIDC. After the formation of the corporation, VIDC  created irrigation potential for 3.82 lakh hectares, costing Rs 11,732 crore. However, the irrigation potential was utilised for only 25,977 hectares while the remaining 3.56 lakh hectares remained unutilised due to delay in the construction of works like creation of canals and other distributing networks.

The predetermined period for the completion of the first 10 projects was five years, but after the addition of 86 projects in 1998, the completion of these projects was shifted to 2007.  However, VIDC failed to complete any project by 2006 despite the recommendations of a high-powered-committee to give priority to projects that have incurred expenditure of 75 per cent or more of the total cost. According to their recommendations, projects with incurred expenditure between 50-75 per cent should have been taken up urgently and those with incurred expenditure of less than 50 per cent should be stopped. Despite these recommendations, the state government allocated funds to all the projects, including the ones below the 50 per cent ceiling. A whopping Rs 418.35 crore was spent on 37 such projects that should have been stopped while the 45 projects above the 75 per ceiling could not be completed by 2004-05. Only 10 projects out of these saw the light of the day in 2011. Obviously, the stink of these multiple multi-crore scams were all over the place.

In 2006, Prime Minister Manmohan Singh visited Vidarbha and announced a special financial package for irrigation facilities for the distressed farmers. Under this package, 82 projects were to be completed in three years to create irrigation potential for 1,44,745 hectares at an estimated cost of Rs 2,085 crore. Out of these 82 projects, 20 were stalled because of clearances while the remaining 60 were not completed in the stipulated time. Out of these 60 projects, canals for 28 projects were not completed and a cost overrun of Rs 811.89 crore was reported in 2011. Shockingly, not a word of protest was uttered by Congress leaders in Maharashtra despite the fact that Chavan (now chief minister) was serving as a minister in the PMO, overseeing implementation of the PM’s package.

Even small projects have suffered. “We have close to 10,000 mama talab (small ponds) in the region. This British period heritage, which has the potential of irrigating 50-300 hectares of land in every village, is getting ruined. I lobbied for funds from the central government for their maintenance. Whatever was allotted was either diverted or siphoned off after shoddy work,” says Aheer.

Indeed, after the scams became public, most of these projects have come to a standstill. Farmers are badly affected by this delay. Several small contractors with stakes in these projects have suffered huge damages and are on the verge of bankruptcy. “These petty contractors sold their land to get loans to finish the project. With these projects in a limbo, they too are mulling the option of suicide as they have lost all their assets and respect in the community. Everyone thinks that they too were involved in these financial scams,” says Mahajan.  

While thousands of crores of rupees have been pumped into these irrigation projects, the agricultural fields in Vidarbha remain dry. Private parties pocketed the money that was meant to provide relief to farmers and stop this epidemic of suicides. “This is a criminal conspiracy to defy the constitutional safeguards for Vidarbha. If this continues, several farmers will be in abject despair since their fields will not have a drop of water,” says Lokhande.

This story is from the print issue of Hardnews: NOVEMBER 2012