Govt open to CBI probe into alleged fraud in WB-funded project

The Centre said on Thursday a CBI probe could be ordered into allegations of fraud by Progressive Construction Ltd (PCL) in a World Bank-funded road project only after the global lending agency establishes that there was a wrongdoing.

Road Transport and Highways Minister C.P. Joshi stated this during the Question Hour in the Rajya Sabha after some members alleged that the PCL was associated with someone in the ruling party in Andhra Pradesh.

The allegation relates to Lucknow-Muzaffarpur National Highway Project during the period 2005-2008. The World Bank loan for the project is USD 620 million.

Government does not have any problem in a CBI inquiry, but "there is a process", Joshi said, adding the World Bank has pointed out that two companies entered into fraudulent practices which are known as "sanctionable practices".

As long as the World Bank, which has served notices on the companies, does not reach a conclusion, the ministry cannot do anything, he said.

"Once the World Bank is satisfied it is fraudulent, we will get it investigated by any agency," Joshi said.

He pointed out that his ministry has already set up a committee to look in the issue.

Joshi said PCL was not blacklisted. It was declared non-performer in 2008 but later the decision was revoked after its performance was found ‘satisfactory’, he said.

The Department of Economic Affairs had forwarded a report of the World Bank's Institutional Integrity unit alleging that two contractors - Progressive Construction Ltd (PCL) and PCL-MVR JV - have committed sanctionable practices.

The House also witnessed protests from BJP members when a Congress member asked a supplementary relating to the Gujarat Chief Minister.

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