A Railway contract fraud touches Rs 100 crores

A contract involving SCRailway project director (bridge works) M. Ravindranath Reddy, an IRSE officer, appears to be bigger than what CBI initially suspected

CBI has found that Rs 103 crore worth of railway projects were handed over to an ineligible company, Krishi Infratech, while Reddy was working as CE/SWR

HYDERABAD: A railway contract fraud, involving South Central Railway project director (bridge works) M Ravindranath Reddy, an Indian Railway Service of Engineers (IRSE) officer, appears to be bigger than what CBI initially suspected. A back of the envelope calculation put it over Rs 100 crore, sources said.

So far, CBI has found that Rs 103 crore worth of railway projects were handed over to an ineligible company, Krishi Infratech, while Reddy was working as chief engineer in South Western Railway in Bengaluru.

CBI sleuths, who raided his official quarters in Hyderabad and Bengaluru on January 9, had booked three separate FIRs. In two of the FIRs, Ravindranath Reddy has been named as prime accused.

In the first FIR booked for cheating, criminal conspiracy and Prevention of Corruption Act, CBI named Ravindranath Reddy, Sherfuddin and P Mohanan — both deputy chief engineers— and Krishi Infratech partner M Suryanarayana Reddy as accused.

In the FIR CBI alleged, “The fraud is about tenders released for construction of road over bridges (ROB), road under bridges (RUB), foot over bridges (FOB) & station buildings between 2011 and 2018. Though Krishi Infratech was ineligible, norms were flouted to give contracts.”

The railway officials reportedly split the tender for the work worth Rs 76 crore into two for Rs 38 crore each and accommodated Krishi Infratech, which had eligibility to take up work up to Rs 50 crore.

Also, Rs 54.2 crore was paid against the contract value of Rs 37.6 crore to Krishi. Similarly Rs 48.8 crore was paid against contract value of Rs 38.4 crore, though there was ample scope for inviting fresh tenders.

The company was paid revised cost even before approval from the competent authority.

In the second FIR, which pertained to awarding contract for the Mysore – Ramanagaram doubling work, apart from Ravindranath Reddy, the agency had named Bhansode, a deputy chief engineer, and Suryanarayana Reddy as accused.

The eligibility criteria was that bidders should have completed execution of 19,640 cubic metres blanketing in similar work. The officials reportedly issued a false work completion certificate in June 2011 and ensured Krishi Infratech was eligible for the bids.

The company failed to submit bank guarantee and the IRSE official showed undue favour by allowing a backdated bank guarantee. An additional Rs 1.43 crore was paid wrongfully, the FIR stated.

In the third case, CBI booked executive engineer Ghanshhyam Pradhan for having assets worth Rs 2.25 crore disproportionate to his known sources of income.

CBI officials found that funds were transferred from the accounts of Krishi Infratech and Suryanarayana Reddy. He was looking after high-value work, including track doubling projects, between 2010 and 2019.

Courtesy: TOI