Most Contracts Awarded to Ineligible Vendors, Reveals ED Probe into BMC’s Pandemic-related Expenditure
MUMBAI: In a recent preliminary investigation conducted by the Enforcement Directorate (ED) into the Brihanmumbai Municipal Corporation’s (BMC) expenditure of ₹4,000 crore on pandemic-related contracts, it has been revealed that a significant number of contracts were given to ineligible vendors or at significantly higher rates.
According to an ED official, their focus is on identifying irregularities and instances of favoritism, with associated quid pro quo transactions, rather than examining genuine actions and decisions made during the pandemic.
In response to the probe, civic officials informed the agency that at the time, the BMC lacked a mechanism to verify the documents submitted by firms along with their bids for contracts. Consequently, the ED is likely to refer a number of cases to the Mumbai police for further investigation.
The agency is currently scrutinizing the role of five middlemen who allegedly acted as intermediaries between Covid suppliers and certain BMC officials. The ED official stated that they are investigating potential quid pro quo arrangements in these cases to determine the beneficiaries involved.
As part of their investigation, the ED has sealed the apartment of one individual and is verifying the source of funds for four other properties registered under a separate suspect’s name. Additionally, the agency is looking into the business activities of the suspect’s brother and his three firms, in order to determine whether any quid pro quo transactions were routed through their accounts.
During their searches, the ED also discovered a coded diary which contained entries indicating payments made to civic officials by suppliers and middlemen. The agency is currently working on decoding the entries to initiate further investigations into alleged irregularities associated with these transactions.
The ED’s case originated from a First Information Report (FIR) filed in August 2022 against the partners of Lifeline Hospital Management Services, which secured a ₹38-crore contract to establish two jumbo Covid centers in Dahisar and Worli. The FIR alleged that the company submitted forged documents to the BMC, lacked sufficient staff, and had no prior experience in providing medical manpower. Furthermore, the company was found to be unregistered.
Subsequently, Lifeline Hospital Management Services was blacklisted by the Pune Metropolitan Region Development Authority after a journalist died of Covid-19 at one of their jumbo centers. Surprisingly, despite being blacklisted, the BMC still awarded the same company a contract worth ₹38 crore, of which ₹30 crore had already been paid, according to the FIR. The ED investigation has confirmed that approximately ₹22 crore of this payment was diverted. The agency is currently verifying various other allegations pertaining to the jumbo centers.
In conclusion, the ongoing ED probe into the BMC’s pandemic-related contracts has unearthed a significant number of contracts awarded to ineligible suppliers or at inflated rates. The agency is actively investigating potential irregularities, including quid pro quo transactions, involving middlemen, and is referring certain cases for further investigation by the Mumbai police. As the investigation progresses, the ED aims to shed light on the beneficiaries of these transactions and hold accountable those involved in any wrongdoing.
