The Arvind Kejriwal Government has opted for the PPP mode to improve infrastructure in the Capital’s industrial estates at Narela and Bawana in the North-Western parts of the city for a period of 13 years. The Delhi Government has bailed out the Delhi State Industrial Infrastructure Development Corporation (DSIIDC) from a controversial contract worth Rs376 crore which was awarded without prior approval of the Delhi Government.
DSIIDC had awarded contract to two companies in 2011 worth Rs376. 74 crore for redevelopment and maintenance of Bawana and Narela industrial areas.
Though the erstwhile Sheila Dikshit Cabinet had approved Special Purpose Vehicle (SPV) model for redevelopment and maintenance, the DSIIDC did not follow it. Instead, DSIIDC went ahead with the bidding process and subsequently awarded the work on its own and the redevelopment work was completed a year ago. As the payment of companies was due, the DSIIDC was caught in fix of how to make the payment without the approval of the Government.
As huge payment was not possible without permission of the Cabinet, the whole issue got placed before the Cabinet in clandestine manner and the Cabinet has approved this payment of whopping Rs376 crore after DSIIDC made it clear that payment would be made through his fund and there would not be any financial burden on the State exchequer.
This Cabinet decision has legitimised the fault of DSIIDC committed in 2011 where the corporation has acted in contravention with Cabinet decision. Recent Cabinet decision by the Kejriwal Government will now pave the way for payment to private players to the tune of around Rs30 crore for one year’s work. The total amount for period spanning 13 years is Rs376.74 crore for redevelopment and maintenance works in Bawana and Narela.
According to the Cabinet note, the redevelopment works were completed about a year back and the payment to private players was due. Therefore, the Delhi Cabinet approved the proposal after DSIIDC made it clear that the entire payment would be made by it and there would not be any financial burden on the State exchequer.
Interestingly, the Kejriwal Government’s move has raised several eyebrows in political and bureaucratic circles. However, the experts are raising question why the Kejriwal Government is keen for the maintenance of Bawana industrial estate, where the occupancy of industries is less than 50 per cent. There are fully developed industrial estates like Okhla, Patparganj, Jhilmil would have been better option. But the Kejriwal Government chose somewhat half-occupied industrial estates in Bawana and Narela.
The previous Congress Government had approved through a Cabinet note to create Special Purpose Vehicle (SPV), which was to pay annual concession fee to DSIIDC in consultation for concession awarded to it. There was also a provision to fix the money through transparent bid process but the Kejriwal Government has decided to annul the decision of the then Sheila Dikshit Government. Instead, the Cabinet approved proposal to award contract on the basis revised business model of fixed annuity.
The controversy had earlier erupted when Principal Secretary (Industries) Shakuntala Gamlin had forwarded a complaint to lieutenant-Governor Najeeb Jung explaining that Industries Minister Satyendra Jain was pressing her to bring a note to convert from leasehold to freehold in Bawana and Borgarh despite the fact that land are Centre’s subject.
In a noting, the Finance Department has stated in the Cabinet note that the Industries Department may be advised to inform the Cabinet that the model approval by the Cabinet is not being acted upon by DSIIDC. It is noted that DSIIDC is entrusted with the responsibility of development, maintenance and operation of industrial estates.