Srinagar, April 02: The Government today decided to hand over the investigation of major scams in Jammu & Kashmir Projects Construction Corp (JKPCC) to the Crime branch of JK Police. This is a major step towards eradication of corruption in the organisation, stopping and eliminating backdoor appointments and bringing in a culture of transparency, probity and efficiency in the organisation.
After receiving numerous complaints from many quarters about the functioning of JKPCC, particularly relating to corruption in civil contracts, illegality in appointments at multiple levels including at very senior positions, and excessive cost and time overruns, the government appointed a Fact Finding Committee to look into all these complaints. The Fact Finding Committee was chaired by the Principal Secretary (Planning), and had the Divisional Commissioner (Jammu), Commissioner/ secretary (revenue) and MD, JKPCC as members.
The mandate of the Committee was to look into:
i) Manner of awarding contracts to contractors often on a nomination basis without following transparent tendering procedures.
ii) Diverting funds from one project to another leading to a large number of incomplete projects whose funds have been received but diverted elsewhere.
iii) Irregularities in appointments at various levels, including that of the Managing Director.
iv) Inefficiency in functioning and huge time and cost overruns in project implementation.
v) Reasons for estimates for construction being much higher than those of PWD.
The Fact Finding Committee submitted a voluminous report bringing out in detail large irregularities in the operation of JKPCC. The Committee also gave recommendations on improving the organisation.
There are many elements in the findings and observations in the report which are quite alarming and a cause of serious concern. For an organisation which is over 50 years old, its operations seem to be riddled with ad-hoc functioning, absence of rules and a lack of systematic procedures. These have given rise to irregularities, which is a serious concern, and necessary measures for correcting these have to be taken to bring some order in the Corporation for its own health and long term welfare.
Keeping in view the seriousness of the matter and the findings of the Committee, the Government has decided on the following:
a) Execution of Construction Works: The report clearly brings out that construction works have been executed by giving contracts on nomination basis, whereas JKPCC should have executed works in a departmental mode. This is a clear violation of a Government Order of November, 2015 which was adopted by the Board of Directors in February, 2016. Irregular procedures in violation of government orders and BoD laid down SoPs are also noticed in engagement of consultants and nomination of piece workers. The Government has decided to hand over the investigation of all works executed or contracted out by the JKPCC after the issuance of the Government Order of November, 2015 to the Crime Branch of Police (Srinagar) to identify any irregularities in award of contracts in violation of prescribed SOP / procedures and take necessary action as per law. Based on the enquiry of the Crime Branch, further action against individuals will be taken.
b) Irregularity in appointments including of MD: For an Organization which is in existence for the last 50 years, it has no Recruitment Rules. It is not clear whether there was adequate funding for this or whether this was done with proper authorisation/ competence. Further, the appointment of Mr. Vikar Mustafa Shonthu as Managing Director seems to have been done in clear violation of Government instructions and the Articles of Association of the Company. The appointment of the Chairman, any Director or the Managing Director is to be done by the Government, viz, either by the Cabinet or the Chief Minister in co-ordination. It appears that this appointment was done by the Chairman (who was the then Minister), who was not competent to do so. The appouintment was ab initio illegal. The Government has decided that the irregularity in the appointment of Mr. Vikar Mustafa Shonthu as Managing Director be referred to the Crime Branch of Police, Srinagar immediately for lodging an FIR and taking further action. Crime Branch would examine the role of the Chairman, the Board of Directors, the Administrative Secretary and the Company Secretary in this matter and take action as per law.
c) The Fact Finding Committee will also look into all appointments made by JKPCC and ensure that all irregular appointments are terminated and action taken against those responsible. This will be done in three months, by 30.6.2019. Principal Secretary (Planning), as Chairman of the Committee shall oversee this entire process.
d) Improving Control over JKPCC: In order to ensure that there is adequate oversight over the affairs of the corporation, a number of administrative steps will be taken including all powers of appointment to be removed from the Managing Director, the Administrative Secretary being made Vice Chairman of the Board, and all proposals made by the MD to the Chairman or to the Board to be routed through the Vice Chairman necessarily.
e) Excessively High Estimates of JKPCC: JKPCC’s estimates should be either based on actual costs plus an overhead or based on PWDs Schedule of Rates which have an inbuilt overhead. The cost estimation procedure of JKPCC will be reformed through a Committee to be proposed by Administrative Secretary, PWD.
f) Cost Overruns and Diversion of funds: The Committee reveals shocking details regarding diversion of funds by JKPCC from one project to another. This indicates poor control systems and absence of proper accounting procedures. The Committee also finds that there are large cost and time over-runs in projects. This is an indication of poor project management skills and weak controls. Government is taking steps to improve the controls and project management systems in JKPCC.