KOCHI: Documents submitted in the Kerala High Court have pointed to alleged irregularities in awarding a contract in the multi-crore K-FON (Kerala Fibre Optic Network) project, leading to a loss of Rs 400 crore to the state exchequer.
According to the documents submitted by Leader of Opposition V D Satheesan along with his petition, the contract was awarded to a consortium, despite it quoting a price that was 58% higher than the estimated amount. The documents also claimed that M Sivasankar, the then IT secretary, acted in undue haste in awarding the contract to the consortium.
The state government’s K-FON project promises to provide free internet connections to 20 lakh poor families. On December 26, 2018, a consortium of two central PSUs Bharat Electronics Ltd and RailTel Corporation of India, and two private companies viz, SRIT (Sobha Renaissance Information Technology Pvt Ltd) and LS Cable India Pvt Ltd was chosen for the K-FON project with a quote of `1,628.35 crore, which was 58.5% higher than the estimated amount, according to the documents.
‘Contract finalised in haste based on Sivasankar’s letter’
In a letter dated February 16, 2019 — submitted as exhibit along with the petition — Sivasankar asks the managing director of Kerala State IT Infrastructure Ltd (KSITIL), which is executing the K-FON project, to quickly move ahead with the project citing that election notifications were likely to be issued shortly, which would delay the award of contracts.
In the letter, Sivasankar is seen asking the KSITIL MD not to wait for the government’s final orders, saying the “project cannot be held up any longer awaiting procedural compliances”. He also justified the higher bid amount, an increase of `400 crore, saying the DPR’s cost estimation was done in December 2016, while price discovery was done in December 2018 through an open competitive bidding, the petition said. “It is based on the said letter that the contract was finalised in haste in favour of the consortium,” said the petition submitted by Satheesan.
The documents also claimed that the little-known company, SRIT, bagged all contracts concerning the K-FON project by using the name RailTel as its face. SRIT later went on to secure the multi-crore contract to install AI-enabled cameras across Kerala. “It is clear from the manner in which SRIT has been scooping up projects in the IT sector in the state that it has great pull within the state establishment, which ensures that projects fall into its lap, notwithstanding law,” stated the submission, which will come up before the HC on Monday.
All contracts won by SRIT were, in turn, routed to Presadio, another little-known company, as evidenced by the sub-contracting of cable-laying by SRIT to Ashoka which issued purchase orders to Presadio, the documents said. “Therefore, SRIT and Presadio act as middlemen, who charge commission for transferring the work to third parties,” it said.