How Unity Infraprojects is bleeding Ministry of External Affairs

The Ministry of External Affairs (MEA) has been waiting from 2010 for a new chancery, residential complex and India House in Dhaka. But the Rs 127-crore project, which was supposed to be handed over in February 2012 by Unity Infraprojects Pvt Ltd, is not even half-complete. 

With no deadline still in sight, the Indian high commission has been paying Rs 1.04 crore annually to run the mission in a rented building. Despite the evident pilferage of public money, the MEA has not penalised the developer. 

Says an MEA source: “They have given excuses like not being able to work in rain, lazy labourers and unavailability of construction materials.”

As bizarre as the ‘excuses’ may sound, Mumbai-based Unity Infraprojects seems to be in no mood to complete the project in the near future or pay for the delays and the resultant wastage of taxpayers' money. 

After missing deadlines to hand over the premises to MEA twice (February 23, 2012 and June 30, 2013), the ministry has given up on setting a new deadline for the project. According to the CAG, that would mean a loss of Rs 1.04 crore every year as rental outgo for the Indian government from a single high commission for an indefinite period. 

Unity Infraprojects had also cited financial difficulties for missing deadlines. However, the company’s annual accounts show that during the period of construction (2010 to 2012), its profits increased from Rs 85 crore to Rs 103 crore. 

The MEA says 50% of the construction has been completed. Company spokesperson says 90%. On payment, he company's spokesperson says: "We get a payment from the MEA according to the work we complete. We send them bills. They audit it and make us the payment. We have completed 90%^ of the work. That translates to Rs 90 crore in payment to us." 

The construction of the new chancery in Dhaka’s Baridhara Diplomatic Enclave started in February 2010. This land, measuring 12 bighas, was gifted to the Indian government on a reciprocal basis by Bangladesh in 1993. 

India, on its part, had gifted Bangladesh 3 acres of land at Dr S Radhakrishnan Marg in Chanakyapuri in central Delhi for its high commission. 

The Dhaka contract was awarded to Unity Infraprojects in 2009 after it emerged as the lowest bidder. “It was a fair tendering process. But if the lowest bidder has actually turned out to be inefficient and has cost the government more money than intended, there is a need to review the parameters set for the tendering process itself,” said the MEA source. 

The project was awarded to Unity Infraprojects despite the fact that it had a dubious record in executing various projects across the country. 

The Kishore Avareskar-led company missed two deadlines in 2012 to complete the re-development of the BC Cooper Hospital in Mumbai. The developer was fined Rs 1 lakh per day, which amounted to Rs 1.53 crore. The Avarsekars lobbied for a waiver, which the BMC turned down. But the BMC has been able to recover only half the fine.

Congress leader Vikas Pandurang Thakre, who lost the assembly election from Nagpur South West to Maharashtra CM Devendra Fadnavis, alleges that the developer had been compensated in the past, instead of being fined, for delays in executing a cement road project in Nagpur in 2014. 

Similarly, the developer was not fined for the delay in completing a multi-crore mall project in Nagpur by over two years, he alleges.

Unity Infraprojects chairman Kishore Avarsekar, despite repeated emails, phone calls and assurances of a response, did not answer dna’s questions on the delays and loss of public funds in the MEA project. 

If the past is anything to go by, the MEA is not just staring at an inordinate delay in taking over its new high commission in Dhaka but also at the prospect of not being able to recover its losses due to the rental outgo from the politically-connected developer. 

“We will definitely impose a penalty on Unity Infraprojects. But we will do that after they complete the project,” says an MEA source. 

The UPA government had allocated the project to Unity Infraprojects, and, now, this will be an acid test for minister of external affairs Sushma Swaraj. Whether the waste of taxpayers' money that unduly benefitted a private developer in an overseas project can be recovered will show the resolve of the BJP government in tackling crony capitalism.