Newly appointed BEML chairman Dwarakanath took bribe: alleges RTI activist KS Periyaswamy
Dwarakanath, along with VRS Natarajan, allegedly caused BEML a loss of Rs 160 crore in the Bangalore metro coaches' deal
Even as the Central Bureau of Investigation (CBI) closes in on former Bharat Earth Movers Limited (BEML) chairman VRS Natarajan for his role in the Tatra truck scam, the newly appointed chairman P Dwarakanath is now facing allegations of manipulating a contract to supply rail coaches for the Bangalore Metro. According to BEML shareholder and RTI activist KS Periyaswamy — whose activism led to the suspension of VRS Natarajan — P Dwarakanth and Natarjan accepted a bribe of Rs 40 crore to favour Mitsubishi Corporation, Rotem and Melco. This has caused a loss of Rs 160 crore to BEML, said Periyaswamy.
Bangalore Metro was a long standing demand of Bangalorean’s to ease city’s congested traffic. The state government mulled over this issue for two decades, and in 2006 set the ball rolling for the project. In 2008, the Bangalore Metro Corporation put out a tender for the supply of 150 rail coaches.
Among the companies that had applied, BEML was selected as it had made the lowest bid. The Public Sector Unit (PSU) BEML, along with multinational corporations (MNCs) Mitsubishi Corporation, Korean rolling stock major Rotem and Japan based Melco as part of a consortium, bagged the order for Rs 1,832.53 crores. During the time of the tendering, as part of the deal, BEML was to share 24.5% (Rs 448.96 crores) whereas the other three MNCs were supposed to share among themselves 75.5% (Rs 1,383.57 crores).
However, when the deal was in its final phase, Bangalore Metro Rail Corporation Limited (BMRCL) re-negotiated and reduced the amount to Rs 1,672.52 crores. BEML readily accepted to settle for the new amount, even if it meant a huge reduction of close to Rs 200 crores from its earliest order. Apart from that, P Dwarakanth who was then Director of (Rail and Metro) BEML, even reduced the percentage share of BEML from the consortium.
From its earlier 24.5 percent, BEML's share percentage was reduced to 19.4% (Rs 318.44 crores), whereas the share of the MNCs went up to 81.5% (Rs 1,354.07 crores). By this change in share percentage, BEML lost out Rs 91 crores. And by the total change of supply order, BEML incurred a loss of close to Rs 160 crores.
“Why did BEML settle for a lower price after its tender was accepted as it was the lowest bidder? Why did it reduce its share percentage and give it to the MNCs,” asks 59-year-old Periyaswamy, who has written to the President and Defence Minister demanding a CBI probe in to this issue.
It is not the first time that Periyaswamy has exposed such irregularities in BEML. In November 2002, Periyaswamy an employee of BEML, had written to the Joint Secretary of the Ministry of Defence demanding a probe into the supply order for Tatra trucks. In 2007, he had brought forth the illegal export of iron ore by BEML to the tune of Rs 118 crores. Investigating officer P Shailaja of CBI Hyderabad had found Natarajan liable under criminal law. Natarajan misusing his official position and getting undue favours worth several crores from BEMLemployment co-operative society was also brought forth by Periyaswamy.
In 2009, Periyaswamy had raised the issue of loss to BEML in the metro coaches’ deal in the annual general meeting (AGM). “The reply I got was amusing,” says Periyaswamy. According to the AGM report (a copy of which is with Tehelka), the decision to re-negotiate was taken considering “the long term prospects of the project... the revenue in the long run would be reasonable.” However, Periyaswamy alleges that in metro coaches’ deal, more than Rs 40 crores was given to Natarajan, Dwarakanath and M Pitchiah, Director of Finance, BEML. “I don’t have proof but CBI would be able to establish it,” he says. Both Natarajan and Dwarakanath were unavailable for comment.
Imran Khan is a Senior Correspondent with Tehelka.