KOCHI: In a petition filed in the Kerala High Court, Leader of Opposition V D Satheesan said he is submitting documentary evidence showing that the then IT secretary M Sivasankar directed the agency executing the K-FON project to award the contract to a consortium led by BEL though the price quoted was 58% higher than the estimated amount, leading to a loss of Rs 400 crore to the exchequer.
K-FON is a Kerala government project that promises to provide free internet connection to 20 lakh poor families in the state.
Further, the documents also showed a little-known company SRIT (Sobha Renaissance Information Technology Pvt Ltd), a key member of the BEL consortium, bagged all contracts concerning the K-FON project by using the name of another public sector RailTel as the face. The beneficiary company SRIT, which later went on to secure the multi-crore contract to install AI-enabled cameras across Kerala for traffic surveillance, is closely connected with persons in power, according to the petition.
"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 or procedure," the submission, which will come up before the High Court on Monday, said.
In a letter dated February 16, 2019, Sivasankar, who is now in judicial custody in connection with the gold smuggling case, asked 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.
Earlier, on December 26, 2018, a consortium of two central PSUs Bharat Electronics Ltd., RailTel Corporation of India and two private companies, SRIT and LS Cable India Pvt Ltd, was chosen for the K-FON project with a quote of Rs 1,628.35 crore, which was 58.5% higher than the estimate amount.
"The IT Secretary in the letter brushes off the official sanction from the government as mere 'procedural formalities' and directs KSITIL to allow the consortium to start work even before tender was formally awarded to them. It is based on the said letter that the contract was finalised in haste in favour of the consortium. The illegal intervention of the IT secretary, who is incidentally now in judicial custody in connection with the infamous gold smuggling case, would show that the consortium was being supported from power centres inside the state who had financial interest in the matter," said the petition.
In the letter, Sivasankar asks KSITL managing director 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 Rs 400 crore -- saying the draft project report's cost estimation was done in December 2016, while price discovery was done in December 2018 through an open competitive bidding.
All contracts won by SRIT were in turn routed to Presadio, another little-known company, as evidenced by the sub-contracting of cable lying by SRIT to Ashoka which issued purchase orders to Presadio. "The same pattern of illegal tender proceedings and sub-contracting between SRIT and Presadio is visible in the Al camera project also. The common pattern of fraud in the AI camera project and the KFON project is that wherever SRIT is involved, Presadio is close behind to reap the benefits of the tender issued to SRIT. Presadio, after receiving the sub-contract, again sub-contracts it to other companies. Therefore, the role of SRIT and Presadio is of middlemen, who charge commission for transferring the actual work to third parties," said the petition.
The petition also pointed out that the CAG had come down heavily on the government for violating tender conditions. The CAG had said that the K-FON project was in a huge mess due to the incompetence of SRIT. "Due to SRIT's illegal sub-tendering of work to sub-contractors who were more incompetent than them, huge delays had occurred and the quality of work has also suffered," it said.