Rs 200 CR JKPCC SCAM: From cost overrun to fund diversion, everything was done for cronies

The committee discloses shocking details about JKPCC's diversion of funds from one project to another.
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Srinagar: Following the disclosure of the Rs 200 crore scam in Jammu and Kashmir Projects Construction Corporation (JKPCC) involving politicians and businessmen, the Jammu and Kashmir government’s fact-finding committee made a shocking revelation in its report, stressing “weak control mechanisms and absence of basic accounting procedures” lead to huge losses to the exchequer.

The committee discloses shocking details about JKPCC's diversion of funds from one project to another. “This suggests a lack of effective accounting procedures and insufficient control mechanisms,” it reveals.

The committee also finds significant cost and time overruns in the projects, indicating a lack of project management skills and controls.

“The government is working to improve JKPCC's controls and project management processes,” it states. “Diverting funds from one project to another leads to a large number of incomplete projects whose funds have been received but diverted elsewhere.”

The report clearly shows that construction work was carried out by awarding contracts on a nomination basis, but JKPCC should have carried out work in a departmental mode.

“This is a clear breach of the November 2015 government order that was authorised by the Board of Directors in February 2016,” the report states.

According to sources, “A businessman close to a politician who was neither a contractor nor registered with the corporation was handed majority of the supplies work for GMC Anantnag for more than Rs 70 crore. The project cost approximately Rs 125 crore. The MD disagreed and had him removed. However, an advance without bills was made available to this businessman.”

The sources said that a businessman was given money under several identities.

“There isn't just one party name. The same businessman was also given supplies work in Chrar-e-Sharief and Jammu. Similarly, some people have been favoured in various works carried out by JKPCC in Baramulla in the same manner,” they said.

Official documents accessed by Greater Kashmir reveal that JKPCC entrusted the construction of two medical colleges at Baramulla and Anantnag “without inviting e-tenders” in 2016, which is a must as per the government rules to ensure transparency.

“The same was duly discussed and noted by the Board of Directors. However, it was advised that this should not be repeated in the future and proper bidding process should be followed in consonance with the MOU (agreement),” read the minutes of the JKPCC’s board meeting.

JKPCC in its reply has stated that on the authorisation of the Health and Medical Education Department, Commissioner Secretary to the Government, Public Works Department vide Government Order No 223-PW(R&B) of 2016 dated August 1, 2016, has entrusted the construction of two medical colleges at Anantnag and Baramulla to JKPCC.

“Due to the prevailing turmoil in Kashmir at that time (2016), the matter was discussed at various levels where it was explained that JKPCC Ltd would face hardships in adopting the full e-tendering system for supplies and labour as many prospective and national-level participants might not like to participate. Moreover, timely execution of projects could have thus been impaired on account of these uncertainties,” the minutes of the meeting reveal.

However, an official said that when other departments had floated tenders during the same period what had stopped the JKPCC from following suit.

A senior JKPCC official who was present in the meeting said, “JKPCC’s decision to allot Rs 200 crore work without e-tendering certainly raised eyebrows. As the public works for even Rs 5 lakh are allotted through the e-tendering process, they allotted this project without following codal work conduct.”

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