Institutionalization of corruption

Its been a long overdue. There had been umpteen occasions where almost published a post. I had motivated myself many times and had been persuaded even more number of times but the lazy bones in me didn't dangle. Anyways, there is enough reason for me to write this. Recently, I have taken courage to leave the comfort zone of lucrative fixed salary and start my own business. I probably would have written similar lines on this topic but after after seeing it first hand, I felt compelled to write.

My dream had always been to create, to construct and to leave. Natural choice would always have resulted in me being a builder but I never thought it was possible without a lot of investment but then I came across public infrastructure. As I crawled my way to find an entry towards securing projects, I was led into the web of Indian corruption and its most modern avtar.

The most promising economic region in India for logistical and economic reasons is NCR (National Capital region) and within it the Eastern belt (Noida- Greater Noida- Gaziabad region) because of the free develop able land availability, its proximity to Delhi, the most ambitious master plans and a zillion more reasons but the serpent of corruption led and completely fuelled by the erstwhile government has resulted the potential growth of 20-30% for the region multiple times below.

There is a way everything is supposed to work -

1. There are plans and masterplans drawn at central and State level helped by commissions, consultants, ministries and pvt. companies like E&Y, McKinsey, etc.
2. Budget is allocated and plans approved and capital is sanctioned to the departments which should get it constitutionally
3. Tender notice declares project (s) plan from respective departments and asks for bids which pass the qualification criterion
4. Bids are submitted and results declared and tenders awarded in generally 2 days of submission
5. Financial, technical and experiential criterions have to met to secure tenders
6. Constant monitoring of projects under the authorities which awarded work and quality check as per a separate department such as RITES for civil construction.

Now these steps are followed diligently but I will tell how everything actually happens.

1. Bribes are given by huge corporates such as Adani, Reliance, Gammon, L&T and HCC which churn out reports through world famous consultants and high level bribes determine the budget. Interestingly, big players like reliance, etc run the mutka market and regulate betting even for budget results which they already know.

2. Now the department can earn illegal money only if it gets the project. The only way to get projects (at least in UP) is to pay bribe to state ministry. The highest bribe gets the projects. Interestingly, these projects are productized and sold through proper sales and marketing at the highest level. The Central Government pays for the high level debt through fiscal deficit to fund these projects. The morons at the center dont care a dime about where this money goes and on top of it are not even printing dough to supply the crunch. Anyways....

3. It is not necessary that project even exists for the listed tender, for example sector road for Sector Omega, Greater Noida was already built by favored contractor when the Tender was noticed. Tenders are supposed to be available online, but they are sold at a commision of 8.5% in Greater Noida authority, 5% in Police nigam and so on. The total of procuring a tender hovers around 20-25% of total project cost which should have been 6% (security and earnest deposit) but that also ensures that you also get the project with rest of the tenders either being bogus. In fact, the number of tenders printed are only as much as the companies available with predecided awardee.

4. Lion's share of this portion goes to behenji with rest being distributed systematically amongst the involved parties. Let us take a case of UPSIDC. Right from allocation to registry to transfer to mining clearance, everything has a fixed cost per meter square. Now this sum goes to Lucknow and is distributed accordingly through bank account transactions. Cut ot the Government projects, a govt. supervisor is appointed to the site to take care of quality, etc. In fact he gets salary from the contractor (typically 3K pm) and any material is allowed resulting in Metro like collapses. Now one can imagine what the actual size of the project should have been when after all of this, when completed on schedule, the margins are upwardly of 10% on project cost or around 50% of investment. Not bad for any business in the world.

For all of the reasons I have mentioned and many more, the costs of all private developments are so high that even the high strategic value of investments do not compensate for the high loses due to corruption. In turn, many big shots such as Wipro, Unitech, Omaxe, HP, Honda and many more have shut their shops in the region.

No one wants it. Not even the adhikaarees and babus in any of the departments because a reduction in commercial investments result in lowering of personal commissions and there a lot of added tension as there are bound to be many enquires when Mayawati leaves the place and the dust settles. Hopefully sooner then later