Wednesday, October 08, 2014

Delhi Metro Kickbacks - Whudunit?

Another corruption scandal has come to light. Once again it is a foreign court that informs us that bribes were paid to Indian officials for a project in India.

This time, unfortunately, it is Delhi Metro that stands on the dock. According to UK's Serious Frauds Office, Alstom-France paid Rs 52 crore over six years to win transport contracts in India, Poland and Tunisia. Between the period 2001-2006, Alstom had won  a Rs 255-crore signalling contract for the Delhi Metro Rail Corporation (DMRC).

Details of this scam have been trickling down slowly over the past couple of months. Yesterday, we finally got a  rebuttal from DMRC. The venerable Dr. Sreedharan stated unequivocally that the "Bribery story hold no water". His point was that in his time, DMRC had sufficient checks and balances in place. "If at all bribe has been paid" Dr. Sreedharan pointed out, "It must have been to individuals outside DMRC with a view to siphon back the amount to individuals of Alstom Network, UK".

So who got the moolah?

Outside DMRC, there were two other key players involved - a consulting firm called Pacific Consultants International (PCI) and JBIC (now JICA). It is interesting to note that around the same period (200-2006), PCI has been indulging in activities that did little to enhance company credibility.

Consider the following -

* Viet Nam, 2003: In 2008, Huynh Ngoc Si, former deputy director of the Ho Chi Minh City’s transport department and head of a major Japanese ODA-backed highway project, was convicted of taking bribes in 2003 by receiving $262,000 from executives of Pacific Consultants International, which was hired as the project consultant.
* India, 2004: PCI lost a case to the Joint Commisioner of Income Tax who held it liable deduct tax to the tune of Rs. 3,26,99,128 for various financial years involved. PCI had been claiming tax-exemption for its expat employees in India without any legal basis.
* Japan, 2008: PCI was fined JPY 70 million (approximately USD 680,000) by the Tokyo District Court, and three former PCI executives were given suspended sentences of imprisonment for 18 months, 20 months, and 2 years, respectively, for paying bribes to Vietnamese government officials in order to obtain consulting contracts for a highway project also funded by ODA and distributed by JICA.

India is now sending its officials to SFO-UK to collect details on the kickbacks.

For the sake of Delhi Metro, let us hope that DMRC officials come out squeaky clean!


* (ToI, ) -- Bribery Story Hold No Water --


* Soni, Anusha (BS-11Sep) - Bribe charges link Alstom to firms from Singapore, Hong Kong --
- Indo European Ventures Pte Ltd, Singapore and  Global King Technology Ltd, Hong Kong


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