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Bengaluru Ministers & Corruption - in numbers

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With so many high profile guys in jail, or at the door steps, one good thing that I see is that Media is becoming more and more comfortable carrying numbers in their reports on corruption. What we knew and heard through the 'grapevine', now has concrete numbers. But this is probably because of well documented and researched Lokayukta reports. Hopefully, some day, media would be able to do Lokayukta quality research on their own, or would not shy away from reporting corruption (which itself was rare, they just ignored the elephant in the room).

  • Upper Bhadra Project. Kickback numbers are alleged, not proven. Project value 1033 Crore. Kickback Rs 13 Crore. Method. Preferred bidder was given the project, lowest bid was ignored.

The Hindu, Oct 26, 2011 (link):

Mr. Datta in his complaint had alleged that R N S Jyoti firm was the highest bidder for the project, quoting the cost at Rs. 1,033 crore, and Mr. Yeddyurappa had awarded the contract to it, ignoring the ... lowest bidder ... as a quid pro quo, R N S Jyoti firm transferred Rs. 13 crore to Davalagiri Developers and Sahyadri Healthcare, owned and managed by Mr. Yeddyurappa’s sons and son-in-law

  • 325 acre Tech park near Devanahalli. Allegation. Kickback amount - Rs 87 Crore. Project size, can't readily find it

Business Standard, Aug 9, 2011 (link):

The Naidus are accused of taking a kickback of Rs 87 crore from Itasca Software for allotting 325 acres of land near Bangalore.

Deccan Chronicle, July 20, 2011

After the land was acquired without the consent of land owners, ... a kickback of `87 crore was transferred to the account of Indu Builders and Developers. The ... ‘front’ company ... owned by Mr Naidu’s wife

There are more - Upper Krishna Canal project, Mining related. All I am interested in is understanding the magnitude to figure

  • How do they decide 13 crore or 87 crore?
  • How exactly does it impact us - put a number to the "corruption tax" we are paying indirectly.


kbsyed61's picture

Slap on the face for PM in waiting!

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It is 83 Crores or 15 crores, it tells only one story. Story of Greed and deceit. But on top of it political class has moral guts to justify it but not condemn it and no iron hand to deal with it.

 PM in waiting who is on another 'Rath Yatra' called Jan Chetna Yatra had something very interesting to say - Next cabinet meeting of UPA govt will be held in Tihar Jail. Looks like he didn't foresee that to happen with his own party in Karnataka. Going by these days, a minister a week is being investigated and charges are filed, majority can be expected in in jail in coming months.

Ex CM, MLA from KGF, Ex IT/BT minister, Ex tourism and infrastructure minister, next in line seems to be home and industries and god know who will be next.

We are yet to see that moral strength from the political class to say enough is enough, time for clean up. May be the clean up broom hasn't been found in the market.

Make no mistake. This is true for every political party in the country, may be an exception to the left - IS HAMAAM MEIN SAB NANGEN HAIN (Everybody is naked in this bathroom).

silkboard's picture

Some more numbers

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A number that "does the rounds" is 10-12% of project value, as in, a 2000 Cr worth project, expect 200-240 Cr padding for "these people". In the Bhadra project related allegation, it doesn't hold good. 13 Cr for 1033 Crore project is about 1.3%, nowhere near that "percentages" some people talk.

Those in the "know" will not talk (news media, 'power brokers'). But numbers emerging from Lokayukta investigations should reveal or break more myths about the "percentage" numbers.

Also, in all the emerging FIRs, only two methods seem to have been used

  1. Land use conversion. Land in question owned by those who would benefit.
  2. Favour a 'price inflated' tender over others, "inflated" amount may be going to the bidder, kick back to the people who flout procurement norms.

While #1 is understandable, involves applying discretionary powers which should be eleiminated in the first place, #2 is most amusing, it simply results from lack of transpaency in procurement process despite their being a transparency act that requires government to disclose all aspects of procurement (aka tendering process).

PS: edited the comment to remove some numbers that don't have ready references..

kbsyed61's picture

Source for your projections?

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Any source for these projections?

  • 10-12% of project value, as in, a 2000 Cr worth project, expect 200-240 Cr padding for "these people"
  • 30-35% of the "gains". 2000 Cr project with 40% margin, means 800 Cr of "gains". 30% of gains = 240 Cr.

Man, I would like to be in 40% margin business. Why me, everybody would like to be in 40% margin.

silkboard's picture

ok, going by the books

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Hmmm, so overall "published" margins of Infrastructure companies (EBITDA) are in the range of 10-15%. So the numbers "doing the rounds" of 35-40% of the "gains" would come a lot lower, to about max 3-5%. This is more in the range of 1.3% (13 Cr for 1033 Cr project) we have from one published number so far.

Syed sir, will delete these "loose" number comments above. [done] comment guidelines

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