Unveiling the Dark Side of Public-Private Partnerships: The Case of DND Flyway. 3 IAS officers Scam 3,700 Crores from India 2023 | Delhi Noida Toll Bridge Scam
Delhi Noida Toll Bridge Scam
The PPP model or the Public Private Partnership model is the easiest way to bring efficiency to any big project. Government companies waste their time in getting approvals for the project, whereas in the PPV model, the government can do all this work faster. Following this belief, within our country Have seen many projects being developed and this is true to some extent but if you do not know then let me tell you that this is a model where the chances of transparency are very less due to which this model becomes an easy prey.
Delhi Noida Toll Bridge Scam settled in the country’s capital Delhi is known for scams. The Delhi Noida Toll Bridge Scam was a result of the drawback of this model and is a winning example today. Today we will learn about this scam but before proceeding further do not subscribe to the channel. Bhoolna This project began in 1990 when the National Capital Region Planning Board conducted a study in which it was told that it was very important to build a bridge across the Yamuna River to reduce the traffic congestion between Delhi and Nad. In the year 1991, three prematurely retired IAS officers along with some businessmen together they formed a company named Infrastructure Finance and Leasing Services or IFNLS.
On 7th April 1992, a Memorandum of Understanding was signed between the Government of Uttar Pradesh, Delhi Administration, and ILFS to build a bridge over the Yamuna River. for but here A big question that arises is why the Uttar Pradesh government and the Delhi administration have signed an MOU with a private company that was formed less than a year ago and which does not have any record of having such a big project was not at the time of signing the MoU, this company did not have a single completed project due to which it could prove its claims and show its capability that it can build such a big project.
In fact, it turns out to be the only company that has completed the project for this project. Had also bid. You heard it right, this is such a new company. There was only one bidder for this project and the story does not end here. After the MOU, a steering committee was formed in which representatives of the Delhi Administration, UP Government, and ILFS were there.
This committee decided that the construction of the bridge would be the contract will be given to the owner company by an IAFS. After this, the IAFS set up and incorporated the Noida Toll Bridge Company Limited, or NT BCL, and established its corporate office in Lucknow. After that, the authority was given to the Noida Administration to carry out the collaboration. After further discussions to finalize the detailed framework, Noida IL NFS and NT BCL signed a concession agreement on 12th November 1997. In this concession agreement, IL NFS and NT BCL were given sole charge for the works of the Noida Delhi Expressway and built their own operate
The charge on BOD was given on a transfer basis, which means that the work of building the project, owning it, operating it later, and after some time after the operation, transferring it to the government, this project is decided according to the work. It was done it bonfire NT BCL It was said that they should fix the toll rate on their own without the approval of node administration, so you can understand where this story is going. Another thing here was that there is no limit on how many years NT BCL has to connect the toll to the public.
There was no toll collection at the beginning of the agreement NTBCL was authorized for a minimum period of 30 years from the commencement of the expressway and there was also a clause in the agreement that stated that if their investment money did not give adequate returns in the first 30 decades, then NTBCL would have the right to collect toll indefinitely for further 30 years. It means that if in 30 years This company has invested money to maintain this bridge. If it does not give a definite profit or does not give sufficient profit, then they can increase the toll as per their wish for many years and can also fix the rate of that toll.
The staple return that the company was getting was that it should be at least 20% but it was not for the entire project duration but every year on top of their initial investment.
What was this initial investment DND Flyway project?
The company itself accepted that the engineering cost of procurement and construction EPC was Rs 193 crore. The cost of the equation which was facilitated by the Noida Administration was approximately Rs 11 crore but when the Delhi Noida route was started in 2001, the NTSC put the total cost at ₹ 408 crore which was almost double the initial estimates.
If there was no delay in the project DND Flyway then how did this cost overrun happen?
The company said that they had to pay a huge management fee for labor, material, machinery, and land costs which was Rs 200 crores and the management fee was Rs 200,200 crores. Now the authority said. NTB Cell had no right to say anything in this matter. What was the point of its own auditor who was endorsing the company’s claim i.e. saying that the claim was true, then the earning had to be calculated based on the initial investment of Rs 408 crore i.e. at stop 20. profit of less than 82 crores
This should have happened every year and only then the company would have considered that they have got definite returns but after just one year after the launch of DND Expressway the company said that if they subtract the toll connection from the total cost then their actual earning would be only ₹. Crore which shows that in the first year itself, they got 80 There was a shortfall of crores. You can understand how much wrong is happening here, but this operational cost was determined and approved by NT BCL itself, completely independently. Noida Authority did not have the right to say anything in this matter as per the agreement. Annual Operation
There was no specific determination or cap on the cost. If the company says that out of the Rs. 82 crores, Rs. 80 crores are spent on maintaining the road, then the node authority will have to agree. Now coming to the most strange provision of the agreement. If there is any shortfall in annual earnings then it will fall short in the next year. This will be added to the initial investment for the earning stop. This work is done in this manner where the shortfall within the year 20012 was ₹ 80 crores. The initial investment for the year 20023 was considered to be ₹ 488 crores i.e. which is ₹ 408 crores.
These 80 crores were added to the initial investment, that is, if the next year we calculate the stepped earning based on 20 percent, that is, the company will consider it as profit and the company will consider that they are getting some benefit from the project, then that amount will be 82 crores. 98 crores but the twist here was that if the tool revenue increases rapidly The operational cost also increased in the same proportion i.e. the net profit became nil. However, we clearly understand that the maintenance of the road will not have such a severe impact with the increasing traffic, but still the company
The appointed auditors endorsed the same. The Planning Commission’s report found that the project cost was already highly inflated, rising from ₹ 408 crore to ₹ 953 crore in year 6, i.e. They were calculating the loss like this, according to 20% it would increase by Rs 953 crore by 2005-6. And there was this strange provision to keep adding things inside the original, here it was increasing, basically, it was taking things to infinity and why the Planning Commission was so surprised because NT BCL had said that their annual profit only ₹2.6 crore whereas per the rule of 20 percent, the earning should have been ₹ 191 crore, then the shortfall of earning of ₹ 188 crore was added to the total project cost due to which it increased from ₹ 953 crore to a total of ₹ 10142 crore in one year.
Planning in and therefore during 2005 6 In an important chapter submitted by the commission, renowned economist Saholi Pargil harshly criticized the PPP agreement, saying there was no tight definition of anything that could be included as a cost in the agreement and hence the costs were effectively open-ended. i.e. which the company was free to do whatever it wanted, on top of which the returns were guaranteed and they were inflated.
In February 2006, Hallak Consulting India conducted a simulation exercise and its conclusion was that keeping in mind the situation of 2005-6 The total cost accumulated by this project till 2021 was Rs 81.5 crores and it could have been even more. With the increasing traffic, it seems as if NT BCL has the license to correct the tools for an infinite time.
How much should DND Flyway project company earn to earn a good income?
These questions started to arise. But you can understand that these things are still going on for 5 years. A few years ago, when the Bharatiya Kisan Union demonstrated for two days and demanded to build a toll-free flyway, a total of 1.
The toll was not collected from 6 lakh vehicles due to which they reported a loss of approximately ₹ 50 lakh. Also, considering that the demonstrators had disrupted toll collection only for two days, NTBCL’s own claim was that they had to pay a loss of ₹ 50 lakh. According to the loss incurred, the daily earning was around Rs 30 lakh, according to which they had to earn Rs crore every month, but if you can follow this story properly then You must understand that in the beginning they were told that their profit was only Rs. 2 crores but here they are earning Rs. 9 crores per month and the total earning was going to be Rs. 2 crores.
The declared Rs. crore was Rs. 108 crore but still, it shows the operational cost of NDBC as more than Rs. 100 crores i.e. it tells that yes money is coming but we are also having expenses and this is the main expense.
Where was it coming under the operational cost?
Where was it being told? In the audit, this money was being told in the form of salary and perks of the top management and those who constituted the top management of the company. Directors were made but still, the operational cost of NT BCL was shown to be above ₹ 100 crore and a major part of it went to the top management of the company. Everything is clear here three IAS officers were seen playing an instrumental role in the award of DND contracts and separated from the service after retirement.
The directors of the company were made but still, the operational cost of NT BCL was shown to be above ₹ 100 crore and a major part of it went to the top management of the company. Everything is clear here How some government officials, taking advantage of their power and network, created a company that is giving them infinite money. Many official administrative bodies are also obviously involved in the scam, but still, no strict action was taken against this scam.
Why do you think this action was not taken?
It is a simple thing because things are written in the agreements.
Courts can also handle agreements in a very limited way. It is possible that a new law can be made that can later nullify such agreements and also enable recovery, but there is no such law as of now, that is, till now. Money is being withdrawn slowly here and it is very difficult to take any action here in the future also this is the Noida Toll Gut Scam where IAS officers inside the country Those whom we give so much respect without any reason and keep in high esteem here, they are the ones who have taken very useless situations somewhere within the system. Recently, I got some opportunities.
When I met government officials, whether they were bureaucrats or government employees, I got a chance to talk to them and I got a chance to see the operations for multiple days, very much My bad experience was when the British Raj was still running inside the country. I saw this inside the elite government and government properties.