Delhi Lieutenant Governor Vinai Kumar Saxena has directed for a probe into alleged corruption in issuing a tender for construction of an additional block in Lok Nayak Hospital (LNH) in the national Capital.

In what points towards massive corruption and blatant violation of procedures, a tender worth `465 crore for construction of the additional block has increased surreptitiously to `1,135 crore, creating an unauthorised liability of approximately `670 crore on the Delhi Government, Raj Niwas officials said here on Tuesday.

Raj Niwas has asked the Vigilance Department to request the Central Vigilance Commission (CVC) to constitute a special team to probe the irregularities. The huge cost escalation has happened with a clear collusion of the Delhi Government’s Health Department under Saurabh Bhardwaj and the Public Works Department headed by Atishi Marlena.

The L-G has also constituted a committee headed by retired IAS officer BK Prasad to examine the procedural violations that led to cost escalation to the tune of `670 crore and submit its report within two months.

The committee will also examine all such on-going projects in different Delhi Government hospitals. The case pertains to construction of a new building block in LNH Hospital. The scheduled start date was 04.11.2020, with a completion period of 30 months. However, even after three and a half years, the current progress of work is only 64 per cent, even as costs have risen by 243 per cent.

The Health & Family Welfare Department of GNCTD had assigned the project to the Public Works Department (PWD). However, the work originally tendered out for `465 crore, ran into re-estimates and expansion of scope of work amounting to a whopping `1,135 crore. The PWD attributed the cost overruns to increase in the scope of work. But while the scope of work increased by 8.61 per cent only, the cost increased by a whopping 143 per cent.

 Interestingly, such huge cost over runs were done at the level of the Engineers of the Department itself, even though it should have had gone to the Finance Department and the Cabinet. However, after the L-G flagged the matter to Chief Minister Arvind Kejriwal on 22.06.2023, the AAP Government brought a Cabinet Note in March 2024, for approval of the cost over runs, which is yet pending.

“I have also noticed that during the execution of work, certain disputes arose between PWD and M/s Swadeshi Civil Infrastructure Pvt. Ltd and in order to reach to a solution, the claims of the contractor were forwarded to Dispute Redressal Committee (DRC). Further, since M/s Swadeshi Civil Infrastructure Pvt. Ltd was not satisfied with the decision of the DRC, an Arbitral Tribunal was constituted for the adjudication of claims/disputes, which pronounced an award ni favour of the contractor, amounting to `82.45 crore with 12 per cent interest plus GST. “However, the department chose not to challenge the award. The department’s failure to challenge this award is beyond comprehension and has further exacerbated the financial burden. Additionally, the award was pronounced by the Arbitral Tribunal on 29.05.2023, however, the PWD did not get the mandatory concurrence from the Finance Department for the same,” Saxena said in a note.

“The major reason for the increase in PE was attributed to an increase in the covered area of the building from 88040 sqm to 95620 sqm. Apparently, the covered area increased by 8.61 per cent only, whereas the revised PE was increased by 143 per cent, which appears prima facie unjustifiable, incomprehensible and even malafide.

The loss to the exchequer and public money due to the procedural violations and unauthorised liability is a very grave matter that warrants immediate and thorough investigation,” the L-G noted.

Welcoming the order, the AAP Government sources said the L-G is himself saying cost escalation has happened at the level of officers without the knowledge of Government. 

“We welcome any enquiry into this matter and strictest punishment if any illegality is found. These officers are directly under the control of the L-G. The Vigilance Department is directly under the L-G and he and his department should have been more proactive instead of coming into action after media reports,” sources added.