Chennai Metro Rail Limited has termed TN BJP chief Annamalai's allegations as 'totally false and factually incorrect'.
Annamalai, RS Bharathi. (Twitter)
The row over the “DMK Files” released by Tamil Nadu BJP chief K Annamalai is headed to the courts and perhaps the central investigative agencies.
After being threatened with a ₹500 crore defamation case by the DMK, Annamalai has, in turn, sought a similar amount from the party’s organising secretary and Rajya Sabha MP RS Bharathi for alleging that he (Annamalai) had benefitted from the Arudhra trading scam that involved a BJP functionary.
Annamalai, in a statement issued on Monday, 17 April, also said that he would lodge a complaint with the CBI, along the proof he had collected of the chief minister being bribed to favour a French firm in Phase 1 of the Chennai Metro project.
While releasing the DMK Files at the BJP headquarters Kamalalayam in Chennai on 14 April, Annamalai had alleged that Stalin was paid a bribe of ₹200 crore in the form of election expenses in 2011 by the firm Alstom that wanted to secure the contract for the Chennai Metro Rail through a few shell companies.
Meanwhile, Chennai Metro Rail Limited (CMRL) issued a clarification on the procurement of rolling stock in 2010 for Phase I of the project, and termed Annamalai’s allegations as “totally false and factually incorrect”.
“It has been alleged that undue advantage was provided to Alstom Transport during the procurement of rolling stock in 2010 for Phase I project of the Chennai Metro Rail Limited (CMRL), by an addendum issued on the applicability of customs duty on the trains procured.
“This clarification is issued to explain that the allegations are totally false and factually incorrect and to elaborate on the fair process followed, which resulted in CMRL saving hundreds of crores to the public exchequer,” said the joint director of CMRL in a statement.
Chennai Metro Rail was funded by the Centre, the government of Tamil Nadu, and the Japan International Cooperation Agency (JICA).
Bids were invited for rolling stock (trains) by CMRL for the procurement of 42 trains, each consisting of four cars (a total of 168 cars). Pre-qualification for this tender was called on 23 September, 2009, and seven applicants applied for pre-qualification.
Out of the seven, four bidders, including Alstom Transport SA, France, and Alstom Projects India Ltd, were pre-qualified based on given pre-qualification criteria such as previous experience, financial capabilities, manufacturing capabilities, etc, on 30 December, 2009, CMRL said.
“Of the four bidders, Bombardier and Hyundai Rotem-BEML were having manufacturing facilities in India then. As per the bid conditions, the first 9 trains (9 x 4= 36 cars) were to be manufactured from any preexisting primary car factory of the bidders. This was to ensure the quality of trains as per the standards of the original manufacturer. The remaining 33 trains (33 x 4 = 132 cars) may be manufactured in India by the existing local manufacturing partner of the original car builder or by establishing a new factory in India by the original car builder. The last date for the submission of tender was 7 June, 2010,” CMRL said in the statement.
After the invitation of bids, the central government issued a notification regarding ‘Deemed Export’ benefits for projects funded by JICA, and a stock order was awarded to Alstom, France.
Alstom supplied the first nine trains (36 cars) from their factory in Sao Paulo in Brazil and they established a new local manufacturing factory at Sri City in Andhra Pradesh and supplied the remaining trains from the facility, the statement clarified.
“The addendum for conferring the Deemed Exports benefits resulted in reduced cost for CMRL. At the time of the invitation of bids for trains for CMRL, the cost of one stainless steel car was about ₹10 crore. Bangalore Metro had also awarded their bid at about ₹10 crore per car at that point in time,” it added.
“Due to the ‘Deemed Exports’ benefits notification by the Gol, CMRL was able to procure the rolling stock at about ₹8.57 crore per car. This has resulted in a savings of about ₹250 crore to CMRL. In addition, the local manufacturing facilities for rolling stock had risen to three due to the new facility established by Alstom. This has resulted in greater competition and the rolling stock was manufactured fully in India at a lesser price, than compared to the earlier period (of CMRL procurement.
“Hence, it would be clear that the granting of ‘Deemed Exports’ benefits has resulted in huge savings in rolling stock cost to all the metro rail companies/corporations,” the statement said.
The statement went on to say that “it has also been alleged that the selected bidder, Alstom, had faced penal action in various countries for bribing to obtain government projects — including CMRL — through shell companies”.
“While it is true that the bidder had faced penal actions for such inappropriate behavior, linking them to the procurement in CMRL is utterly false and malicious,” the statement said.
While Alstom had to pay $772 million to resolve foreign bribery allegations, the order of the US Department of Justice mentions that the bribery allegations were related to projects in Indonesia, Egypt, Saudi Arabia, the Bahamas, and Taiwan. No project in India was implicated in that order, CMRL said.
In another case in the UK — investigated by Serious Fraud Office (SFO) — the order stated the company paid bribes in India, Poland, and Tunisia between 2000 and 2006.
“CMRL did not even exist during this period and the project itself was conceived after 2007. In addition, the alleged incident in India was related to procurement by Delhi Metro Rail Limited,” the statement said.
“The alleged shell companies, Indo European Ventures Pvt Ltd and Global King Technology Ltd have also been implicated by the UK SFO only in the Delhi Metro Project and this has nothing to do with any procurement done by CMRL.
“If procurements by CMRL had been involved in such investigations, the concerned agencies would have approached CMRL for information. But there has been no such communication from any agency in this aspect. Hence the alleged penal actions on the selected bidder, Alstom, have nothing to do with the procurements by CMRL, which has grown into an organisation of great standing and repute”, CMRL stated.
Following the release of the “DMK Files”, DMK’s Bharathi had issued a legal notice to the BJP state president denying all the allegations and seeking an unconditional apology and ₹500 crore as compensation for defaming the DMK leaders.
Responding to the legal notice, Annamalai on Monday, 17 April, said that he is ready to face the legal proceedings and his legal team will respond to the notice sent by Bharathi.
சட்ட நடவடிக்கைக்கு நான் தயார்! pic.twitter.com/T1ZHNyA9Qd
— K.Annamalai (மோடியின் குடும்பம்) (@annamalai_k) April 17, 2023
“I would be handing over the proofs of the irregularities that happened in allotting the tenders in the Metro Rail Project and will file a complaint to the CBI. RS Bharathi should keep quiet until a summons is issued to the DMK chief and others by CBI in the case”
Annamalai also sought an unconditional apology from the DMK’s organising secretary for the allegations involving him in the Arudhra scam case and sought compensation of ₹500.01 crore.
“I wish to pay the sum to the PM CARES fund,” he added.
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