SHILLONG, Oct 23: The implementing agency of the Shillong-Nongstoin-Tura road project, accused of committing a scam in collusion with some government officials, has threatened to file a defamation suit against the Meghalaya government for spreading “false and misleading information” about the commercial disputes related to the project.
Sources in BSC C&C and BSCPL (joint venture), which implemented the project, said the project contract was awarded by the state in February 2011 through a legitimate competitive bidding process.
Stating that the project’s scheduled completion date was March 6, 2014, they said the government ‘manufactured’ the case and the purported scam as a “cover-up” arising from the state’s humongous delays in the project.
They said the 265-km project was a major one in Meghalaya on difficult terrain and was fraught with challenges. The delay was largely due to the state PWD’s inability to provide land conveniently, and its failure to release the IPC-certified payments and provide security to the project personnel.
The sources claimed that the initial delay led to a large-scale escalation of the project cost but the contractors managed to complete it in 2017. They said the highway has since been in good condition, facilitating smooth traffic movement.
The contractors attributed the project cost escalation to the state’s “colossal delay” in completing the formalities and additional work as the construction progressed. The contract price was thus revised from Rs 1,303 crore to Rs 2,406 crore when the project was completed through an approval process involving scrutiny at several layers of the state and central governments.
The contractors filed arbitration cases against the state in 2018 for the delays caused in the project on account of factors not attributable to them by claiming delay-induced losses under specific provisions of the contract and applicable law until the completion of the project.
Thereafter, the contractors complained that the state ordered criminal proceedings once the government realised it did not have a case to refute the contractually valid case for compensation due to delay, disruption, or prolongation of the contract arising from the state’s delays.
“These replies state that the contractors’ claim had been successful before the Dispute Resolution Board constituted a team of experienced experts knowledgeable about contractual and legal aspects. Even the team of arbitrators considering the case had decided a part of the claims in their favour with the balance still sub-judice,” a representative of the contractors said.
The sources said all challenges and appeals made by the state to these orders in favour of the contractor were struck down – some by the High Court of Meghalaya and by the Supreme Court with detailed reasoning and justifications. They added that the high court made strong observations on the conduct of the state, and the legal advice received by it, even imposing significant costs on it for delays and filing petitions on baseless grounds.
“The contractors claim that the state decided to term the project as a ‘scam’, intentionally obfuscating its contractual obligations thereby claiming the entire project cost of about Rs 2,300 crore involved for construction of a two-lane road for a length of 265 km on a hilly and difficult terrain and the legitimate payments received therein by the contractor for execution of works as a purported scam, is misleading the public/ public authorities of the nation, thereby defaming the reputed contractor for none of its faults as alleged,” the representative said. He also said that the government initiated a probe only after these contractual and legal challenges before various forums, including the Supreme Court and the high court, became unsuccessful in a purely civil contract.
They also maintain that until 2022, Meghalaya ignored the project’s delays, seeking to shift the blame to the Ministry of Road Transport & Highways, or MoRTH, the project’s nodal agency.
“The state went to the extent of claiming that there were no delays in the project at all. The sudden shift of stance by the state, now claiming that the project’s costs increased on account of a scam, is nothing but a last-ditch effort by it to avoid liabilities arising from arbitration, which the state is liable as per strict contract requirements and as per applicable law for civil contracts,” the representative said.
Sources said these allegations raise serious concerns regarding the role of the state and its misuse of power in converting what is essentially a civil/ commercial dispute into a criminal one and harassing infrastructure companies that, despite facing several difficulties, have completed the project and, in the process, suffered losses arising out of project delays.
“There is a perception that states in the Northeast are not amenable to doing business and executing projects of national importance. The representative said these events in Meghalaya would only further such perceptions and that major private companies would now think twice before assuming the risks that inevitably arise from such projects,” the representative said.
