Noida CEO recommends CAG audit of DND toll operator

Noida: Amid growing demands for making the Delhi-Noida-Delhi (DND) flyway toll-free, serious allegations of corruption against the firm which operates it have also come to fore.

According to a report published in DNA, the Noida Authority has recommended to the Uttar Pradesh government that an audit be conducted by the Comptroller and Auditor General (CAG) of India into the contract agreement and accounts of Noida Toll Bridge Company Limited (NTBCL) which operates the DND flyway.

Rama Raman, chairperson and CEO of Noida, recently shot off a letter to the Chief Secretary, Uttar Pradesh, alleging serious irregularities committed by the Delhi-Noida toll bridge operator, NTBCL, which is IL&FS' subsidiary company.

The irregularities, according to the CEO's letter, range from arbitrary appointment of independent auditor and independent engineer to illegally erecting advertising hoardings and office buildings.

The letter by the Noida Authority to the UP government follows an attempt to address any possible irregularities as well as concerns raised by residents and toll users. NTBCL has been promoted as a special purpose vehicle to develop construct, operate and maintain the Delhi-Noida-Direct (DND) Flyway.

The latest proposition follows an earlier recommendation by Raman to the government, wherein he had conveyed the need for an independent auditor for the accounts of the toll operating company.

PK Agarwal, additional CEO, Noida Authority, was also quoted as telling the media that the final decision would be made by the state government. He also confirmed that one of the two committees of senior officials set up by Raman to probe any irregularities regarding the DND-Noida toll agreement and its commissioning had completed its inquiry.

The explosive letter from the Noida CEO also alleges that IL&FS arbitrarily floated a subsidiary company and sold off government land to this subsidiary company for huge profits. IL&FS added its own expenses and paid huge salaries to its top executives to inflate expenses to be recovered from the DND toll taxes, alleges the letter. All this was done with the motive of making massive profits for the company.

The letter further reflects that IL&FS has plans to tax people commuting between Delhi and Noida through DND Flyway for many years, if the UP government continues to support the concession agreement signed at the time of the inception of the road.

The company was reporting less profits and twisted terms of the concession agreement to continue toll collection almost eternally, it is believed to have alleged.

The letter says that NTBCL increased salary of its chief seven times in as many years to show huge expenditures so that the company is able to continue to collect toll for more than 30 years showing that they couldn't recover the promised amount in the stipulated time period.

Apart from this, NTBCL appointed ITNL Toll Management Service Limited, one of their own subsidiary, for running and maintaining DND flyover without following or inviting any competitive bidding process.

NBTCL holds 51 percent equity and IL&FS has 49 percent equity in ITNL company. This was done with the intention to benefit IL&FS by including their expenses as well to swell DND amount and thus charge toll forever. This was a clear violation of the concession agreement. Besides, the company diverted funds to IL&FS and its promoting companies, the letter alleges.

NTBCL also sold off the remaining land measuring around 30 acre at an arbitrary rate of Rs 103.48 lakh to its subsidiary company DND Flyway Limited in March 2004 for commercial purposes. This was in violation of clauses of the concession agreement.

Moreover, the company constructed its office building without permission from Noida authority as approval was given only for the toll plaza.

This is a major setback for IL&FS at a time when the company is desperately trying to defend this project. If a CAG audit endorses these irregularities, it may lead to an overhaul of the project, including revoking of the licence.

Various political parties including BJP, Congress and local organizations and NGOs, besides RWA bodies and residents, have been protesting against the collection of toll by the operator.

They have been consistently alleging that the operator of the flyway has made significant profits already. According to the protesters, NTBCL has already collected Rs 408 crore - the amount spent on constructing the road - in the last 13 years.

Following the protests, chief minister Akhilesh Yadav had last month also asked for a probe to ascertain whether the toll being collected by the operator was justified.

BJP MP from Gautam Buddh Nagar Mahesh Sharma had last year raised the issue of making the DND flyover toll free in Lok Sabha.