The allegations of corruption and kickbacks in what has come to be known as the Louis Berger scam supposedly involving former Goa Chief Minister, Minister for PWD and the Project Director of Japan International Cooperation Agency (JICA, Goa project) cannot be critically examined without understanding the background of the JICA project. What gets loaded in the media is exclusively on The Louis Berger Group as if projecting that this New Jersey, USA, incorporated company is the key stakeholder in the project. The fact is that the Louis Berger Company is nowhere directly or in a major way even indirectly connected with the state government or its instrumentalities including the JICA project. The authorized consultants for project management consulting services are Nihon Suido Consultants Company, Ltd., Japan and the contract is between the PWD and this lead partner of the consortium. The Louis Berger Company though one of the members of the consortium, the contract clearly stipulates that all the technical and financial issues including disputes if any will be dealt with the authorized representative of Nihon Suido and the PWD. There is no independent standing for The Louis Berger Company to enter into any negotiations whatsoever.
Early beginnings
The story commences as a sequel to the Exchange of Notes between Government of Japan (GoJ) and the Government of India (GoI) in August, 2007 concerning Japanese loans to be extended to promote development efforts of the GoI. Accordingly, the former Japan Bank of International Cooperation (JBIC) now known as JICA enters into a loan agreement with the President of India extending a loan of 22806 billion Japanese Yen for implementation of Goa Water Supply and Sewerage project. The central government, more specifically, the Ministry of Urban Development is the borrower whilst the Goa PWD is the executing agency. The loan agreement is signed on 14th September, 2007.
The financing agency i.e. JBIC lays down the guidelines for procurement of goods and services as well as guidelines for employment of consultants. These guidelines as per the JBIC Official Development Assistance (ODA) loans make it mandatory to obtain the approval of the bank in procurement and the concurrence in respect of appointment of consultants. The financing bank retains the right to review decisions taken in respect of the above. The loan agreement also specifies the Bank of India, Tokyo as the authorized foreign exchange bank and sets the procedure that all disbursement and payments would be done directly by the bank to the account of the suppliers and consultants. No funds would flow in the public treasury of either the GoI or GoG and neither of the governments is entitled to make any disbursement or payments. The project completion period is pegged to ten years meaning that 2017 would be the cut-off for full utilization of the loan.
Feasibility
The overall objective of the JICA project is for augmentation of one water supply system by 100 MLD and for developing sewerage system for Mapusa, Margao and the North coastal belt.
The specific works to be undertaken under water supply involve the expansion of water treatment plant; construction and rehabilitation of transmission (Margao to Verna); construction of transmission reservoirs (Sirvoi, Padi, Cupwada, Quepem) and improvement of power supply. Under the sewerage portfolio, the proposal is for establishment of three treatment plants (Margao, Mapusa and North coastal belt) and for construction and erection of pipes.
The project is envisaged for direct financial benefits in terms of revenue through incremental water supply and from the sewerage services. It is also proposed to gradually hike the water tariff by 10-15% for additional revenue to redeem the loan. The economic benefits would also flow in terms of costs saved on septic tanks by domestic and non-domestic users and the treatment of waste water. The indirect benefits to the economy of the state would accrue from reduction in waterborne diseases on account of improvement in sanitation levels. The acceptability levels of tourists and more specifically the foreign segment would be higher with better environment and sanitation.
Consulting services
The work on the JICA project starts with the appointment of consultants as per the method of selection as stipulated in the loan agreement between JBIC and the central government. In the global tender floated by the Project Director, JICA (Goa), five companies file bid for consultancy.
The scrutiny committee consisting of Project Director, Chief Engineer, Joint Secretary (Finance), two Superintending Engineers, Joint Director (Accounts) and Surveyor of Works peruse the technical proposals of the bidders. The technical proposal of Nihon Suido Consultants is ranked first. On receipt of the concurrence of JBIC, the financial bid is opened on March 26, 2009 and after series of negotiations; this bid which initially stood at 2229.172 million Japanese Yen is confirmed at 1424.994 million Yen. This is followed by a contract for project management consulting services between the PWD and the consortium of Nihon Suido Consultants, Japan; NJS Consultants, Japan, The Louis Berger Group, USA and Shah Technical Consultants, India.
As per this contract entered into in March 2009, the Project Director, JICA and Deputy Managing Director, Nihon Suido are designated as authorized representatives for all future discussions and transactions. Any action to be taken or any document to be executed is to be done by the officials specified in the contract. The question therefore is from where, why and how do the representatives of The Louis Berger Company come in the picture in day to day issues or in execution of the contract of consulting services or doing any type of liaison/public relations exercise with ministers?
Prabhakar Timble is an educationist and a political commentator
