Read below for an account of the detailed corruption charges against General Electric Company in India
In the Hon’ble High Court of
Civil Writ Jurisdiction
C.M. Appl. No. 7197 of 2013
In
Writ Petition No. 1280 of 2012
IN THE
MATTER OF:
Seema
Sapra …Petitioner
Versus
General
Electric Co. and Others ….Respondents
An application under section 151,
Civil Procedure Code SEEKING INJUNCTIVE RELIEF AND DIRECTIONS from the court TO
RESTRAIN RESPONENTS 4 AND 5 from SUBVERTING THESE WRIT PROCEEDINGS
The
Petitioner above named
Most
Respectfully Showeth:
1.
This is an application seeking
directions to Respondent 2 (the CVC), Respondent 4 (Railway Ministry), and to
Respondent 5 (the PMO) in connection with the affidavit dated 15 May 2013 filed
in this matter by Mr Nihar Ranjan Dash purporting to be on behalf of Respondent
4.
- The present application seeks an urgent injunction
addressed to respondents 4 and 5 (Ministry for Railways and the office of
the Prime Minister of India respectively) restraining these respondents
from acting on the Cabinet decision dated 1 May 2013 and from proceeding
further with the new RFQs published on 6 May 2013 for the Projects for the
proposed diesel locomotive factory at Marhowra and the proposed electric
locomotive factory at Madhepura until the present writ petition is heard
and decided finally. This application seeks orders restraining respondents
4 and 5 from receiving any application/ technical bids/ under these new
RFQs issued for ELF and DLF from and on behalf of General Electric
Company/ GE India Industrial Private Limited/ GE Global Sourcing India
Private Limited and/ or any of their Associate companies.
3.
The petitioner refers to and relies upon the writ
petition, the counter affidavits and rejoinder affidavits on record, several
additional affidavits on record and upon several sets of additional documents
on record.
4.
The petitioner also refers to and relies upon CM 19501/
2012 pending hearing before this Court where the following relief was sought:
“Injunct/ restrain respondents 4 and 5 (Railway Ministry
and the Union of India through the PMO) from inviting financial bids and otherwise
proceeding further with the bid process for the two global tenders impugned in
the present writ petition, namely the 2010 tenders for the proposed diesel
locomotive factory at Marhowra [Global RFQ No. 2010/ ME (Proj)/ 4/
Marhoura/RFQ] and for the proposed electric locomotive factory at Madhepura
[RFQ No. 2010/ Elect. (Dev0 440/1(1))] until this writ petition is heard and
finally decided;”
5.
In the latest affidavit dated 15 May, 2013, Mr Nihar
Ranjan Dash has informed the court that the Bidding Process initiated in 2010
for the two tenders impugned in this writ petition has been cancelled. New
Bidding Processes (tenders) for the Project for the proposed Marhowra diesel
locomotive factory (DLF) and for the Project for the proposed Madhepura
electric locomotive factory (ELF) have been initiated. Fresh RFQs for both
these Projects have been issued.
6.
Attached hereto as Annexure P-1 is a copy of the new
RFQ issued for the Project for the proposed diesel locomotive factory at
Marhowra, being Global RFQ No. 2013/M/ (W)/ 964/33 dated May, 2013.
7.
Attached hereto as Annexure P-2 is a copy of the new
RFQ issued for the Project for the proposed electric locomotive factory at
Madhepura being Global RFQ No.
2013/Elect (Dev)/440/7 dated 6 May, 2013.
8.
It is submitted that the manner and timing of cancellation
of the tenders impugned in this petition by the Railway Ministry and the
inordinate hurry in issuing new RFQs and thereby starting new Bidding Processes
for the Marhowra and Madhepura Projects and the manner in which this has been
done without informing this Court and despite the pendency of this writ
petition is nothing but an attempt to over-reach this court and to cover-up the
grave charges of corruption, fraud, forgery, bribery, and improper and
undesirable conduct in connection with the DLF and ELF tenders and Projects
that this court is seized of in the present writ petition. The malafide intent
of respondents 4 and 5 appears to be to “save” General Electric from the lawful
consequences of its illegal acts and corrupt practices which are before this Hon’ble Court .
9.
Several issues arise as a result of the attempted
subversion of these writ proceedings by the latest actions of the Railway
Ministry, the PMO, the Planning Commission, the Finance Ministry, Mr Montek
Singh Ahluwalia, Mr P Chidambaram, and Mr Pavan Bansal as disclosed in the
affidavit of Mr Nihar Ranjan Dash dated 15 May, 2013. These are listed below.
10. This
affidavit was not served on the petitioner. The petitioner obtained a copy only
on 20 May, 2013 when she obtained a copy of the scanned court record from the
court registry.
11. This
affidavit was deliberately filed late on 15 May 2013 so that it was not before
the court on the last date of hearing, i.e., on 16 May, 2013. No one appeared
for the Railway Ministry on 16 May, 2013 to inform the court that this
affidavit had been filed or about these latest developments in the matter.
Neither Mr Rajiv Mehra (the ASG) nor Mr R N Singh, the counsel appearing for
the Railway Ministry appeared for the hearing on 16 May, 2013 to inform the
court of these actions of the Government of India.
12. This
writ petition was again listed before court on 22 May 2013 along with CM 6417/
2013 filed by the petitioner. Once again there was no appearance by Counsel for
the UOI (PMO), the CVC or the Railway Ministry despite the fact that this new
application expressly seeks relief against the CVC and the Railway Ministry and
advance copies of this application were served on all parties.
13. The
affidavit dated 15 May 2013 signed by Mr Nihar Ranjan Dash pertains to both the
Madhepura Project being administered by the Electrical Engineering directorate
of the Railway Ministry and to the Marhowra Project being administered by the
Mechanical Engineering directorate of the Railway Ministry. Yet the affidavit
has been filed by a junior officer of the Electrical Engineering directorate
who has no authority to file an affidavit deposing on the issue of the Marhowra
Project which is being managed by an entirely separate department of the Railway
Ministry. For this reason and for being evasive and misleading (as described
below), this affidavit must be rejected.
14. The
timing of these new developments and the actions of the Railway Ministry, the
PMO, the Union Cabinet, Mr P Chidambaram, Mr Pavan Bansal, Mr Montek Singh
Ahluwalia and Prime Minister Dr Manmohan
Singh as disclosed in the affidavit of Mr Nihar Ranjan Dash dated 15 May, 2013
show that the intent of the Government is to over-reach this court and to take
steps which are timed in a clear attempt to subvert this writ petition in order
to cover up criminal activity including corruption. The timing of these
malafide actions also shows that the Government of India is attempting to take
undue advantage of the petitioner’s pending request for recusal by the Bench of
Justice Gita Mittal and Justice Deepa Sharma, of the order passed by Justice
Gita Mittal and Justice Deepa Sharma in adjourning the petitioner’s application
for their recusal to 18 July 2013, and of the month long summer vacations of
the Delhi High Court in June.
15. The intent seems to be to complete the new
Bidding Process for the DLF and ELF tenders before this writ petition can be
heard and decided. It is submitted that General Electric is liable to be
blacklisted from all Railway Ministry tenders for two years or more and this
prayer has been expressly sought in this writ petition. The Railway Ministry
cannot therefore be permitted to invite General Electric to participate in a
new Bidding Process even while the unaddressed complaints of fraud, forgery,
corruption, bribery and illegal lobbying by General Electric for an earlier
Bidding Process for the same Project are before this court in this writ
petition.
16. A
brief list of dates that establishes this attempt to over-reach the court by
the PMO, the Union Cabinet, the Railway Ministry, the Planning Commission, Mr P
Chidambaram, Mr Montek Singh Ahluwalia and Mr Pavan Bansal is set out below.
This list of dates spans three different tenders for the DLF and ELF Projects.
The first set of tenders for these two Projects were in 2008-2009, the second
set of tenders for these two Projects were in 2010-2013, and the third set of
tenders for the same two Projects have been issued on 6 May 2013. The two Railway
Ministry Projects are ELF (electric locomotive factory at Madhepura) and DLF
(diesel locomotive factory at Marhoura). Both Projects together are worth
approximately 20 billion USD.
LIST OF DATES
22 Feb 2007
|
Issue of justification for the ELF and DLF Projects
Cabinet Committee on Economic
Affairs (CCEA) approved Railway proposal to set up ELF and DLF.
This approval and the basis for
this approval have not been placed on the court record by the Railway
Ministry.
According to Railway Ministry
affidavit dated 14 January 2013 in reply to CM 19501/ 2012, there is a CCEA
note justifying the need for DLF and ELF and the need for new manufacturing
capacity for diesel and electric locomotives. This note has not been produced
on record.
Mr Montek Singh Ahluwalia is a
member of the CCEA.
The genesis of these Projects is
a recommendation by Mr Montek Singh Ahluwalia at the behest of General
Electric.
|
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1 Aug 2008
|
Issue of General Electric having access to
unreleased Bid Documents in 2008
Reproduced
below is an email that the petitioner received from Ms Ruby Anand on March 9,
2010 forwarding five pdf files that were sent to her by Ms Praveena
Yagnambhat (from General Electric) on
August 1, 2008. Ms Ruby Anand has in the past served as General Counsel
for General Electric in
i.
11th July 2008 D
ii.
11th July 2008 D
Loco Maintenance Contract
iii.
11th July 2008 D
Loco Procurement Contract
iv.
11th July 2008 D
Loco RFP Document
v.
11th July 2008 D Loco
Shareholders Agreement
The
email from Ms Ruby Anand read:
“From: Ruby
Anand <rubysdesk@gmail.com>
Date: Tue, Mar 9, 2010 at 8:35 PM Subject: See the 5th doc for now - the Loco RFP -issued earlier To: Seema Sapra <seema.sapra@googlemail.com>
----------
Forwarded message ----------
From: Yagnambhat, Praveena (GE Infra, Transportation) <praveena.yagnambhat@ge.com> Date: Fri, Aug 1, 2008 at 4:10 PM Subject: Loco RFP To: Ruby Anand <rubysdesk@gmail.com>
Dear Ruby
Attached please find a soft copy of the Loco RFP. Please
let me know if you are unable to open any of the files.
Regards
Praveena Yagnambhat
GE Infrastructure -
Phone : +91 11 4155 5317
Fax : +91 11 2335
5969
--
Ruby Ruby Anand C-4/7 Safdarjung Development Area
A
printout of the pdf file - 11th July 2008 D Loco RFP Document – which the
petitioner received from Ms Ruby Anand on March 9, 2010 has been attached as
Annexure P-2 to the rejoinder affidavit filed by the petitioner on July 23,
2012. This document is the Railway Ministry draft RFP for the 2008-2009
tender for the diesel locomotive factory Project at Marhowra. Similarly, the other four documents
attached to Ms Ruby Anand’s email dated March 9, 2010 are all Indian Railways
draft documents for the 2008-9 tender for the Marhowra locomotive factory
Project.
The RFP
for the Marhowra Project tender in 2008 was not issued by the Railways
Ministry until the 22 September 2008. So how did General Electric have
in its possession on August 1, 2008, the draft documents for the 2008-2009
Marhowra Project tender? How did General Electric get access to these
documents on or before August 1, 2008?
These
internal Railway Ministry documents (still in draft form) were obviously
obtained by General Electric illegally before they were officially finalised
and released publicly. This evidence confirms the complaints of corruption
against General Electric. General Electric needs to disclose how it came
into possession of these confidential documents. How were these documents
leaked to General Electric?
The affidavit filed by the
Railway Ministry in response to CM 19501/ 2012 does not offer any explanation
about how General Electric came to possess a copy of the draft RFP on 1
August 2008, when this RFP was formally released to Bidders only on 22
September 2008.
All that this affidavit dated 14
January 2013 filed by the Railway Ministry in response to CM 19501/ 2012 (in
volume 13 of the court record) states on this issue is the following:
“It is pertinent to note that any
RFP document is one which is discussed, deliberated and finalized after
discussion with several stakeholders and consultants.”
No explanation has been provided
by the Railway Ministry as to how General Electric had in its possession the
draft Bid Documents for the ELF tender on 1 August 2008, before these were
released to the two Bidders, EMD and General Electric.
The statement in the Railway
affidavit that “It is pertinent to note that any RFP document is one which is
discussed, deliberated and finalized after discussion with several
stakeholders and consultants” is an attempt to cover up the fact that General
Electric had in its possession, the draft Bid Documents before they were
officially/ formally released/ shared with either General Electric or EMD.
This provides evidence that the
DLF Project have been created/ tailor-made at the behest of and for General
Electric. General Electric has since 2008 influenced the bid documents to
ensure that a commercially lucrative contract and opportunity is created for
itself using their contacts/ agents within the Indian government (like Mr
Montek Singh Ahluwalia).
The role of Prime Minister
Manmohan Singh, the role of his close aide Mr Montek Singh Ahluwalia and the
role of other officials from the PMO and the Planning Commission in creating
these suspect Projects for General Electric and in interfering in the bid
process and the bid documents with intent to help General Electric secure the
DLF Project requires to be investigated.
|
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22 Sep 2008
|
RFP for DLF issued to General
Electric and to EMD.
|
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5 Feb 2009
|
Framework and documents including
PCMA approved by the Cabinet for the Projects for ELF and DLF
Cabinet appointed Empowered
Committee of Secretaries to approve changes in the PCMA.
This Empowered Committee of
Secretaries comprised Chairman Railway Board, Secretary Economic Affairs,
Secretary Planning Commission, Secretary Law, Financial Commissioner
Railways, Member Electrical Railway Board, and Member Mechanical Railway
Board.
This approval was issued in a
hurry with intent to award these contracts before the 2009 general elections.
|
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10 Feb 2009
|
Issue of tailor-made DLF Project and
tenders and issue of illegal lobbying by General Electric
The
petitioner draws the attention of this court to a public statement made by
Mr. John Rice, Vice Chairman of General Electric Company in connection with
the Madhepura and Marhowra Projects during an investor meeting on February
10, 2009. Mr John Rice stated:
“We are also competing for the
In this
statement, Mr John Rice has disclosed that the Marhowra Projects which is the
subject matter of one of the impugned tenders in this writ petition “has been 10 years in the making, and will
be all of the diesel electric locomotive requirements for
|
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16 February 2009
|
Financial bid for DLF tender
received from GE Global Sourcing India Private Limited. EMD, also shortlisted
did not bid.
General Electric’s bid was found
to be non-responsive and the tender was discharged.
|
||||||||||||||||||||||||
23 Feb 2009
|
Cabinet approved Railway Ministry
proposal to set up DLF and ELF Projects as Departmental Production Units of
Indian Railways.
|
||||||||||||||||||||||||
23 Feb 2009
|
Business Standard news report
dated February 23, 2009 titled “Railways may scrap diesel loco bid -Railway
Board to decide on the matter” published.
This report contained the
following statements:
“Also, according to sources in
the railways, there also appears to be some technical mistake in the GE bid.
When
this was pointed out, however, the company said it was a mathematical error
and has agreed, in writing, to accept that the price of its locomotives be
lowered by the extent of the error — for all the locos. This adds up to
around Rs 300 crore over the life of the project.”
|
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23 Feb 2009
|
Issue of internal General Electric emails
showing that it was lobbying Mr Montek Singh Ahluwalia for the DLF Project
There
exist internal General Electric emails from 23 Feb 2009 that Mr Jeffrey
Eglash (from General Electric) showed the Petitioner on November 30, 2011
during a meeting at the business centre of the Shangrila hotel in
Yet on
23 February, 2009, internal General Electric emails sent to the Vice Chairman
(Mr John Rice) suggested that the news report be allowed to die or that
someone from General Electric speak to Montek Singh Ahluwalia or Ronen Sen. General
Electric cannot deny these emails seen and read by the petitioner. GE has not
issued a denial that an internal GE email sent to John Rice and Karan Bhatia
mentioned Montek and Ronen Sen by name and that email was on the subject of
the Business Standard Report dated February 23, 2009 and suggested what
should be done by GE in response to this report.
The
fact that internal GE emails dated February 23, 2012 that were also addressed to John Rice and Karan Bhatia referred to Montek
Singh Ahluwalia and Ronen Sen by name and mentioned the possibility of
someone at General Electric speaking to these two persons in connection with
the Business Standard news report dated February 23, 2009, and the 2009
tender for the Marhowra diesel locomotive factory Project establishes that General
Electric was engaged/ involved in corrupt dealings/ contact/ lobbying with
high-level functionaries within the Indian government (like Montek Singh
Ahluwalia and Ronen Sen) around its 2009 bid for the Marhowra DLF Project. Internal
GE emails from February 2009 sent to GE officers (like John Rice) record
these corrupt dealings and lobbying. The internal GE emails dated 23 February
2009 that Jeffrey Eglash inadvertently showed the petitioner on November 30,
2011 are prima facie evidence of corruption by General Electric Company and
also raise questions about General Electric’s access to, dealings with, and
influence on high-level government officials like Mr Montek Singh
Ahluwalia.
|
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5 May 2009
|
Issue of Mr Montek Singh Ahluwalia lobbying for the DLF Project on
behalf of General Electric
In a meeting between Planning
Commission and Railway Ministry, Mr Montek Singh Ahluwalia lobbied (on behalf
of General Electric) for once again exploring JV route with private parties
for ELF and DLF.
|
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18 May 2009
|
Issue of Mr Montek Singh Ahluwalia lobbying for the DLF Project on
behalf of General Electric
Because of the pressure from Mr
Montek Singh Ahluwalia, Railway Ministry approached Cabinet to revert to JV
framework for setting up ELF and DLF.
Cabinet approval granted to set
up ELF and DLF in JVs with private parties.
|
||||||||||||||||||||||||
18 May 2009
|
Issue of Clause permitting Bidder to use Consultants who have advised
the tendering authority
Ministry of Finance issued Office
Memorandum releasing a revised model RFQ for pre-qualification of Bidders for
PPP Projects
Clause 2.2.1 (d) of the model RFQ
was amended to allow consultants to the Bidding authority to work for Bidders
in relation to the same Project if their engagement by the Bidder ended six
months prior to the date of issue of the RFQ.
The petitioner submits that
this modification is arbitrary, unreasonable, counter-productive, and
promotes corruption and conflict of interest and clauses of such nature must
be struck down by the Court in all RFQs including in the new ELF and DLF RFQs
issued by the Railway Ministry on 6 May 2013.
|
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11 Aug 2009
|
Issue of Mr Vinod Sharma
“General
Electric” (respondents 1, 6 and 7 or “GE’) has engaged in a corrupt practice
by using/ engaging the services of Mr. Vinod Sharma for GE's bid for the 2010
diesel and electric locomotive tenders.
Mr
Vinod Sharma is a retired Indian Railways official who after retirement
worked with PricewaterhouseCoopers and while at PricewaterhouseCoopers
advised the Railway Ministry in 2007, 2008 and 2009 on the PPP Project for
the proposed diesel locomotive factory at Marhowra.
Mr.
Vinod Sharma has in the past advised the tendering Authority in respect of
the same Project. The 2010 tender is for the same Project that Mr. Vinod
Sharma advised the Ministry of Railways for in 2008-2009. The bid strategy
and the bid documents for the 2010 tenders are based upon the advice provided
by PricewaterhouseCoopers (and by Mr. Vinod Sharma) to the Railways Ministry.
By knowingly engaging Mr. Vinod Sharma as a consultant for the 2010 tenders
(as GE has admitted in its counter affidavit) GE violated Clause 2.2.1 (d),
Clause 4.1.3 a) and Clause 4.1.3 d) of the 2010 RFQ for the proposed diesel
locomotive factory and engaged in corrupt practices as defined in the RFQ and
is liable to be disqualified under Clause 4.1.1 and blacklisted under Clause
4.1.2.
The
2010 RFQ for the proposed diesel locomotive factory that respondent 7 had
been shortlisted for along with respondent 16 (EMD) [Global RFQ No. 2010/ ME
(Proj)/ 4/ Marhoura/RFQ] is for the very same Project.
Mr.
Vinod Sharma had extensive contact both with GE executives and with Indian
Railways officials during the time he was working for and lobbying for GE.
Mr. Vinod Sharma had helped formulate the bid strategy and helped draft the
bid documents for the diesel locomotive factory tender for the same Project
in 2007/ 2008. The engagement of Mr. Vinod Sharma by GE therefore violated
Clause 4.1.3 a) (ii) of the 2010 Marhowra RFQ and amounts to a corrupt
practice as defined in this Clause. The engagement of Mr. Vinod Sharma by GE
also violated Clause 4.1.3 d) of the 2010 Marhowra RFQ and amounts to an
undesirable practice as defined in this clause. GE executives interacted with
Mr. Vinod Sharma and used his services with the object of canvassing,
lobbying and influencing the bidding process. Mr. Vinod Sharma was connected
to Indian Railways as he had been engaged (as part of the PwC team) as
consultant to the Indian Railways for the same project. GE’s dealings with
Mr. Vinod Sharma created a Conflict of Interest as defined in Clause 4.1.3 d)
of the 2010 Marhowra RFQ.
Mr
Vinod Sharma facilitated and participated in corrupt contact and prohibited
lobbying of Railway Ministry officials by GE executives. GE’s dealings with
Mr. Vinod Sharma amount to corrupt and undesirable practices as defined in
Clauses 4.1.3 a) and 4.1.3 d) of the 2010 Marhowra RFQ. This conduct makes GE
liable to be disqualified and blacklisted under Clauses 4.1.1 and 4.1.2 of
the RFQ. This is a very serious violation of the tender conditions by GE. The
Railway Ministry is legally obligated to disqualify and blacklist GE for this
conduct. The 2010 Marhowra RFQ, the law, and the guidelines of the Government
of India do not give the Railway Ministry the discretion to overlook this
serious violation of the RFQ.
The petitioner relies upon Clause 4.1.3 (a) of the
2010 Marhowra RFQ which reads:
""corrupt practice" means (i) the
offering, giving, receiving, or soliciting, directly or indirectly, of
anything of value to influence the actions of any person connected with the
Bidding Process (for avoidance of doubt, offering of employment to or
employing or engaging in any manner whatsoever, directly or indirectly, any
official of the Authority who is or has been associated in any manner,
directly or indirectly with the Bidding Process or the LoA or has dealt with
matters concerning the Agreement or arising therefrom, before or after the
execution thereof, at any time prior to the expiry of one year from the date
such official resigns or retires from or otherwise ceases to be in the
service of the Authority, shall be deemed to constitute influencing the
actions of a person connected with the Bidding Process) or (ii) engaging in
any manner whatsoever, whether during the Bidding Process or after the issue
of the LOA or after the execution of the Agreement, as the case may be, till
commissioning of the factory as per provisions to be specified in the RFP,
any person in respect of any matter relating to the Project or the LOA or the
Agreement, who at any time has been or is a legal, financial or technical
adviser of the Authority in relation to any matter concerning the
Project".
Clause
4.0 of the 2010 Marhowra RFQ deals with “Fraud and Corrupt Practices” and
Clause 4.1.1 states:
“The Applicants and their respective officers, employees,
agents and advisers shall observe the highest standard of ethics during the
Bidding Process. Notwithstanding anything to the contrary contained herein,
the Authority shall reject an Application without being liable in any manner
whatsoever to the Applicant if it determines that the Applicant has, directly
or indirectly or through an agent, engaged in corrupt practice, fraudulent
practice, coercive practice, undesirable practice or restrictive practice in
the Bidding Process.”
Clause
4.1.2 of the 2010 Marhowra RFQ provides:
“Without prejudice to the rights of the Authority under
Clause 4.1.1 hereinabove, if an Applicant is found by the Authority to have
directly or indirectly or through an agent, engaged or indulged in any
corrupt practice, fraudulent practice, coercive practice, undesirable
practice or restrictive practice during the Bidding Process, such Applicant
shall not be eligible to participate in any tender or RFQ issued by the
Authority during a period of 2 (two) years from the date such Applicant is
found by the Authority to have directly or indirectly or through an agent,
engaged or indulged in any corrupt practice, fraudulent practice, coercive
practice, undesirable practice or restrictive practice, as the case may be.”
Clause
4.1.3 d) of the 2010 Marhowra RFQ defines “undesirable practice’. It reads:
“undesirable practice” means (i) establishing contact
with any person connected with or employed or engaged by the Authority with
the objective of canvassing, lobbying or in any manner influencing or
attempting to influence the Bidding Process; or (ii) having a Conflict of
Interest”.
It is
submitted that that Clause 4.1.3 a) of the 2010 diesel locomotive factory RFQ
defines “corrupt practice” as including “engaging in any manner whatsoever,
whether during the Bidding Process or after the issue of the LOA or after the
execution of the Agreement, as the case may be, any person in respect of any
matter relating to the Project or the LOA or the Agreement, who at any time
has been or is a legal, financial or technical adviser of the Authority in
relation to any matter concerning the Project”.
The key
word in Clause 4.1.3 a) for the present purpose is the word “Project’. The
Glossary provided at the beginning of the 2010 Marhowra RFQ has an entry for
“Project” which reads: “As defined in Clause 1.2.1”. “The term “Project” is
defined by this RFQ in Clause 1.2.1 as follows:
“The
Project for which the Applications are being invited pursuant to this RFQ
Document shall comprise of the following:
i.
setting up a new Mainline Diesel Electric Locomotives factory at Marhowra,
ii.
supplying Mainline Diesel Electric Locomotives to the Authority; and
iii.
providing maintenance support for the Mainline Diesel Electric Locomotives
procured by the Authority from the new factory.”
The bar
imposed by Clause 4.1.3 a) is therefore against a bidder engaging any person
‘who at any time has been or is a legal, financial or technical adviser of
the Authority in relation to any matter concerning the Project”. The key word
here is “Project” and not “tender”.
Clause
2.2.1 (d) of the 2010 Marhowra RFQ reads as follows:
"An Applicant
shall be liable for disqualification if any legal, financial or technical adviser
of the Authority in relation to the Project is engaged by the Applicant
during the Bidding Process or after the issue of the LOA or after the
execution of the Agreement, as the case may be, till commissioning of the
factory as per provisions to be specified in the RFP, in any manner for
matters related to or incidental to the Project.”
The
engagement of Mr. Vinod Sharma as consultant by GE violated Clause 2.2.1 (d)
of the 2010 RFQ for the proposed diesel locomotive factory. Mr. Vinod Sharma,
a retired Railways official has advised the Authority/ Planning Commission on
this Project. In 2010, he was actively advising and assisting GE regarding
the tender for the same Project (diesel locomotive factory) and also for the
tender for the electric locomotive factory. Vinod Sharma was a frequent
visitor to GE’s AIFACS office. He was in frequent contact with GE employees
working on this tender, including Pratyush Kumar and Ashfaq Nainar. He attended several meetings at GE’s
office. Internal GE emails provide documentary evidence of such meetings. He
lobbied and canvassed with Indian Railways officials on behalf of GE. Mr.
Vinod Sharma vetted the RFQ applications submitted by GE (through respondent
7) on 12 July 2010 and on 17 May 2012 for the diesel locomotive factory and
the electric locomotive factory tenders.
Clause 4.1.3 (a) (ii) of the Diesel RFQ defines a “corrupt practice”
as including the engagement “in any manner whatsoever, whether during the
bidding process or after the issue of the LOA or after the execution of the
Agreement, as the case may be, any person in respect of any matter relating
to the Project, or the LOA or the Agreement, who at any time has been or is a
legal, financial or technical adviser of the Authority in relation to any
matter concerning the Project”. Mr. Vinod Sharma’s engagement by General
Electric falls foul of Clause 4.1.3 (a) (ii) and would render GE’s
application liable for rejection under Clause 4.1.1 of the RFQ. It would also
render GE liable for blacklisting in accordance with Clause 4.1.2 of the
RFQ.
In a
concerted and planned malafide attempt to mislead the court, the Railway
Board (Respondent 4) in its counter affidavit (filed by a low-ranking officer
who would not in the discharge of his duties be aware of the facts of this
case) states that the Railway Board has “never engaged Shri Vinod Sharma for
any work in connection with the said tenders”. I point out that the language used by
Respondent 4 is carefully worded to avoid commenting on whether Vinod Sharma
was an advisor to the Project (i.e., the proposed factory for diesel
locomotive tenders at Marhowra). The Railway Ministry knows that it engaged
PricewaterhouseCoopers as consultant for the Project and that Mr Vinod Sharma
was part of the PricewaterhouseCoopers team for this engagement and was
therefore an advisor for the Project. The Railway Ministry knows that Mr
Vinod Sharma’s engagement by GE for the same Project was therefore a corrupt
practice. Yet the Railways Ministry in its counter affidavit fails to disclose
these facts. Respondent 4 is covering up the corrupt practice that GE engaged
in by using evasive and misleading language in its reply on this issue in its
counter-affidavit. The Railways Ministry has not being forthcoming with the
facts. It has attempted to suppress these facts by omitting material facts
when stating that ‘Vinod Sharma was never engaged by the Railways Ministry’
and by using the word “tenders” instead of the word “Project”. This statement
in the affidavit filed by Mr Nihar Ranjan Dash purportedly on behalf of
respondent 4 constitutes a lie by omission and deliberate concealment of
relevant facts. The Railways Ministry has failed to state that though it
never engaged Mr Vinod Sharma directly, it is aware that Mr Vinod Sharma was
part of the PricewaterhouseCooper team that rendered advice under the
engagement of PricewaterhouseCoopers by the Ministry as a consultant for the
same Project. The relevant point is not whether the Railway Ministry
‘engaged” Mr Vinod Sharma for the “tenders”. Rather the relevant question is
did Mr Vinod Sharma at any time act as an “adviser of the Authority in
relation to any matter concerning the Project”. The Railway Ministry has not
denied that Mr Vinod Sharma was in 2007, 2008 and 2009, an “adviser of the Authority”
as a result of the engagement of PricewaterhouseCoopers as consultant to the
“Project” for the proposed diesel locomotive factory at Marhowra which
Project is the subject matter of the impugned RFQ [Global RFQ No. 2010/ ME
(Proj)/ 4/ Marhoura/RFQ].
General Electric has admitted
that it entered into a written contract with Mr Vinod Sharma, through his
“company” “Essvee Consultants” effective from 11 Aug 2009.
The petitioner has pointed out
that there exists no company registered with the Ministry of Corporate
Affairs with the name “Essvee Consultants”.
|
||||||||||||||||||||||||
18 Feb 2010
|
Issue of Mr Montek Singh Ahluwalia lobbying for the DLF Project on
behalf of General Electric
Cabinet approved launch of
Bidding Processes for the ELF and the DLF as JVs with private partners.
|
||||||||||||||||||||||||
2 March 2010
|
Global RFQ No.
2010/Elect./(Dev.)/440//1(1) issued for ELF
|
||||||||||||||||||||||||
March 2010
|
Global RFQ No. 2010/ME/
Proj/4/Marhoura/RFQ issued for DLF
|
||||||||||||||||||||||||
1 May 2010
|
Issue of illegal lobbying by General
Electric
General
Electric was lobbying to introduce“2X6000HP Permanently Coupled Co-Co units
at 23 Tons / Axle’ into the bid specifications for the 2010 diesel locomotive
tender or into the RFP for this tender. The
petitioner was present at a meeting
and discussion between Mr Pratyush Kumar and Mr Ashfaq Nainar (both from
General Electric) with Mr Shubhranshu from the Railways Ministry that took
place in Mr Shubhranshu’s office on May 1, 2010 (a Saturday) concerning these
kind of locomotives. This was obviously not an official Railway Ministry
meeting. The petitioner recalls Mr Ashfaq Nainar mentioning tonnes per axle
and lobbying for some changes to the bid documents (to either the RFQ or the
RFP) during this meeting.
|
||||||||||||||||||||||||
12 May 2010
|
Final version of ELF RFQ
issued.
|
||||||||||||||||||||||||
17 May 2010
|
Technical Bids submitted for ELF
2010 tender (Bidding Process) under Global RFQ No.
2010/Elect./(Dev.)/440//1(1).
Issue of Shell
Company
General Electric Company used an Indian subsidiary (GE
Global Sourcing India Private Limited) as the bidding entity. GE Global Sourcing
India Private Limited is a shell company and at the relevant time, this shell
company had not engaged in any prior business activities. This shell company
was selected as the bidding entity by General Electric Company to avoid
having to make mandatory disclosures required under the RFQ read with the Government of India,
Department of Disinvestment ‘Guidelines for qualification of Bidders seeking
to acquire stakes in Public Sector Enterprises through the process of
disinvestment’ issued vide Office Memorandum No. 6/4/2001DDII dated July 13,
2001.
|
||||||||||||||||||||||||
20 May 2010
|
Issue of
General Electric email to Gmail account of Railway official three days after
technical bids submitted for ELF
Mr. Ramesh Mathur from GE Transportation (India) sent
an email from his General Electric email account (ramesh.mathur@ge.com)
to Mr. Ved Mani Tiwari’s gmail account (vmt20769@gmail.com) on
May 20, 2011 (at 10:46 am) providing additional documentation and information
for General Electric’s technical bid for the Electric Locomotive Tender three
days after the technical bids were submitted and opened in the presence of
all Bidders on May 17, 2010. Mr. Ved Mani
Tiwari is an Indian Railways officer and his present designation is
|
||||||||||||||||||||||||
18 May 2010
and
22 May 2010
|
Issue of General Electric’s ineligibility
for ELF as it does not manufacture electric locomotives, yet ELF Bid Documents
tailored to render General Electric eligible.
Petitioner
has placed on record two McKinsey documents titled “18052010 Assessing Loco
Opportunity v4.ppt” dated May 18, 2010 and “20100522_Working session_V04.ppt”
dated May 22, 2010. These documents
are of interest because they also establish that General Electric does not
manufacture electric locomotives and does not possess the technology to
manufacture electric locomotives.
Slide 3
of the document dated May 22, 2010 titled “20100522_Working session_V04.ppt”
lists ‘Key engineering issues identified during initial round of discussions’
between GE and McKinsey. These were listed as:
“Can we hire 100
engineers, including 20-30 domain experts, in 3 months time (plus 4 months
before LoA for preparations, e.g., CV short-listing)?
Is BHEL’s limited expertise in
Liquid cooled IGBT sufficient?
What risk will be posed by the
lack of expertise in reliability, vehicle dynamics, system engineering and
high voltage circuitry
What risk will be posed by the
lack of expertise in E-loco bogey
Can the factory be commissioned
in 18-21 months?
What will be the loading cost of
higher failure rate (2.04 per fly Vs 1.5)?”
These
documents establish that General Electric does not manufacture electric
locomotives and does not possess the technology, expertise and experience for
this purpose.
|
||||||||||||||||||||||||
31 May 2010
|
Issue of expedited short-listing of Bideders by Railway Ministry for
ELF Project in 2010
Railway Ministry shortlisted all
four applicants for the 2nd (RFP) stage of the Bidding Process for
the 2010 ELF tender.
The shortlisted bidders were
Siemens AG, Alstom Projects India Limited, Bombardier Transportation India
Limited, and GE Global Sourcing India Private Limited
Respondent
4 in its counter affidavit states that official communications were issued to
all bidders on May 31, 2010 and that the prequalification was completed on
May 31, 2010. The Railway Ministry needs to explain how it completed scrutiny
and prequalification of four voluminous bids for a Project worth almost 10
billion USD in just 9 working days.
|
||||||||||||||||||||||||
June 2010
|
Issue of
illegal lobbying by General Electric
Towards the end of May 2010 and the first two weeks of
June 2010, General Electric engaged a team of McKinsey consultants who were
working out of General Electric’s office in
The
petitioner recalls members of the McKinsey team accompanying General Electric
executives including Mr. Pratyush Kumar, Mr Ashfaq Nainar and Mr. Ramesh
Mathur to the office of the Railway Ministry for meetings on several
occasions.
The petitioner has first hand
knowledge of these meetings having taken place.
|
||||||||||||||||||||||||
7 June 2010
|
Issue of internal General Electric emails/
documents evidencing corruption and illegal lobbying
Reproduced
below is an internal GE email sent by Mr. Pratyush Kumar to Mr. Lorenzo
Simonelli, Mr. David Tucker, Mr. Brett Begole, Mr. Monish Patolawala, Mr.
Joel Berdine, Mr. Russell Stokes, Ms. Tara Plimpton, Mr. Cyrille Petit, Mr
John Flannery, Ms Tammy Gromacki, Mr Eric Ducharme, Mr. Karan Bhatia, and Mr.
Rich Herold (all from GE) on June 7, 2010. This email was copied to Mr Ashfaq
Nainar, Ms Alpna Khera, Mr James Gerson, Mr Steve Seip, Mr Atulya Dubere, Mr
Ramesh Mathur, Mr Gaurav Negi, Mr James Winget, Mr Kevin Randall, Mr Puneet
Mahajan, Mr Ashish Malhotra, Mr Vageesh Patil (all from GE) and to the
petitioner. This internal General
Electric email dated June 7, 2010 sent by Mr Pratyush Kumar has been filed
with the petitioner’s affidavit dated July 9, 2012.
The
subject of the email was “India Update: D-Loco”. The email was flagged “High
Importance.” This email stated as follows:
“Current estimate of timelines for D-Loco
·
RFQ due: Jul 12
·
Shortlist: Jul 30 –
Aug 9
·
RFP Release: Aug
16-31
·
Price bid: Oct 31 –
Nov 15
·
LOA: Dec 15-31
·
Appointed Date: Mar
31, ’11 … Clock for deliverables starts then
RFQ Process [Prat/Ash, Jul 12]
·
Pre-Bid held on May
26 … EMD, GE and Phooltas Harsco (a local company from
·
220 acres of land in
possession with 40 pillars for boundary laid out … $4.56MM paid to farmers
·
[As we had
anticipated] asked to harmonize with Electric RFQ … final amendments are not
yet out … we have the draft
·
So far, keeping Jul
12th submission date
Letter to IR on D-Loco [Prat/Brett/Tara, Jun 15]
Closed item – no 6000HP at 23T/axle
BHEL partnership [Prat/Ash/Brett/Cyrille/, multiple
deadlines]
Structure discussed with BHEL [Prat/Brett/Lorenzo]
·
Circle back to them
with revised Structure 2 [Prat/Brett, Jun11]
·
Set target price for
components supplied from BHEL to GE [Jim Gerson/ Ramesh Mathur, Jun 20]
·
Develop back-to-back
terms [Seema Sapra/ Kevin Randall/ Cyrille Petit, Jun 20]
·
Discussion with BHEL
with Lorenzo and Dave [June 22]
·
BHEL Board meeting
[Last week of June]
·
Negotiations
[Prat/Cyrille, Jul-Aug]
RFQ Prep [Ashish
·
Resolve how to
handle CFO certification on networth [Prat/ Monish/ Puneet]
·
Customer
certificates …selected few [Steve Seip]
·
Responsiveness
requirement [Seema Sapra]
[We will bring BHEL into consortium only after the
propulsion % control JV terms are nailed down. But we need to work on
consortium agreements now]
·
Joint Bidding
agreement with BHEL [Seema Sapra/ James Winget/ Kevin Randall]
·
BHEL RFQ
certificates [Seema Sapra / James Winget/ Ashish Malhotra]
Bharat Forge [Atulya, Sep 15]
·
Identify items they
want to quote [Atulya/Ramesh, Jun 15]
·
Get firm quotes with
back to back terms [Atulya/ Amol/ Ramesh, Sep 15]
·
Supply agreements
with back to back terms [Atulya/ Amol/ Ramesh/ Seema/ Jamie, Oct 1]
Refreshing model / bid [Jim Gerson/ Gaurav Negi/ Monish,
Oct 1]
·
EPC quotes for
factories and township [Atulya/ Ramesh/ Joel, Jul 15]
·
EHS/ site assessment
etc [Atulya/ Ramesh/ Joel, Aug 15]
·
·
Cost validation [Jim
Gerson, Aug 15]
·
Discussions with
township management vendors [Atulya/ Ramesh/ Joel, Aug 15]
·
Scrub Service model
[Alpna/ Gina, sep 15]
·
Run Tollgates
[Ashish/ Jim/, various by Oct 15]
Ensure E-Loco concessions get incorporated in D-Loco bid
[Prat/ Ash, Sep 15]
Timeline risks
·
EMD asking for more
time pending deal closure with Cat
Railway
Minister changing”
Two
items from this email that establishes corrupt dealings between General Electric
executives and Railway and Planning Commission officers need to be
highlighted.
The
first is
“[As we had
anticipated] asked to harmonize with Electric RFQ … final amendments are not
yet out … we have the draft”
The
second is
“Ensure E-Loco
concessions get incorporated in D-Loco bid [Prat/ Ash, Sep 15]”
General
Electric here is talking in internal company emails on 7 June 2010 of
concessions obtained from the Railway Ministry in the ELF PCMA, even before
the draft RFP for ELF 2010 tender was issued to shortlisted bidders on
11 June 2010.
The
email talks about getting these ELF concessions incorporated in the DLF
Project documents.
This
email also talks about the internal decision/ discussions of the Railway
Ministry to harmonise the DLF RFQ with the ELF RFQ.
|
||||||||||||||||||||||||
8 June 2010
|
Issue of illegal lobbying by General
Electric
Towards
the end of the McKinsey assignment, Mr. Pratyush Kumar (from General
Electric) asked the petitioner on June 8, 2010 to prepare a timeline for
events/ tasks to be completed in the Electric locomotive factory RFP. He told
her to use the 2008 RFP. The timeline showed certain inconsistencies/
unachievable deadlines. For example the factory would not have been ready in
time to meet the first delivery deadlines. Mr. Pratyush Kumar wanted this
timeline urgently for meetings with Railway Ministry officials. Soon after
these meetings between General Electric, Railway Ministry officials and
McKinsey consultants, the Railway Ministry issued the RFPs for the Dankuni
Project and the ELF Madhepura project.
The
petitioner has personal and first-hand knowledge of these meetings between
General Electric executives, McKinsey executives working on an assignment for
General Electric ostensibly to assess the ELF opportunity, and Railway Ministry
officials.
|
||||||||||||||||||||||||
Mid June 2010
|
Issue of
illegal lobbying by General Electric and corrupt and prohibited contact with
Railway Ministry officials
In June 2010, the petitioner was present in the GE
AIFACS office on a mid-week holiday working on the Dankuni tender RFP
comments. The McKinsey team was also present working on their assignment. Mr.
Pratyush Kumar arrived at the General Electric office around the evening (sometime
after around 4 pm) that day. Mr. Ved Mani Tiwari (a Railway Ministry
official) came to the General Electric office to meet Pratyush Kumar and the
McKinsey team. Mr Anupam Agarwal (the McKinsey engagement manager), Mr
Pratyush Kumar and Mr Ved Mani Tiwari all had a meeting n Mr Pratyush Kumar’s
office cabin. The petitioner is a witness to the fact of this meeting having
taken place. The exact date of this visit and meeting can be verified. It was
a mid-week government holiday sometime in the first half of June 2010. This
was not an official Railway Ministry meeting.
The petitioner has first-hand knowledge of this meeting
having taken place.
She was
present and saw the meeting taking place through the glass doors of Mr
Pratyush Kumar’s cabin in the GE AIFACS office. In fact, the Petitioner had
been present in Mr Pratyush Kumar’s office and was asked by him to leave the
office after Mr Pratyush Kumar, Mr Ved Mani Tiwari and Mr Anupam Agarwal
(McKinsey) had assembled therein for this meeting.
General
Electric has not denied and cannot deny that this meeting took place. Mr
Pratyush Kumar, Mr Ved Mani Tiwari and Mr Anupam Agarwal were seen by the
petitioner closeted together in Mr Pratyush Kumar’s cabin for this meeting. The
circumstances of this meeting having taken place on a government holiday,
with Mr Ved Mani Tiwari coming to General Electric’s AIFACS office is clear
evidence that this meeting was not above board, was improper and that it took
place to facilitate corrupt and illegal lobbying and to unlawfully influence
the ELF bid documents and process to enable General Electric to unlawfully
influence the DLF bid documents and process. This meeting presents
irrefutable and unambiguous evidence of corrupt dealings/ lobbying by General
Electric in connection with the ELF and DLF tenders.
There
can be no other explanation for the fact of this meeting
.
|
||||||||||||||||||||||||
11 June 2010
|
RFP draft for ELF 2010 tender
issued to shortlisted bidders
|
||||||||||||||||||||||||
18 June 2010
|
By June
18, 2010, Mr. Jeffrey Immelt had decided that General Electric would not bid
for the Madhepura electric locomotive factory tender.
|
||||||||||||||||||||||||
28 June 2010
|
Amendments made to RFQ for DLF
and Global RFQ No. 2010/ME/ Proj/4/Marhoura/RFQ –Rev 1. issued for DLF
|
||||||||||||||||||||||||
June- July 2010
|
Issue of illegal lobbying by General
Electric and corrupt and prohibited contact with Railway Ministry officials
Pratyush
Kumar (General Electric) was lobbying Railway Ministry officials to ensure
that the diesel locomotive RFQ was harmonized with the electric locomotive
RFQ on the language for the certification required to establish net-worth.
[General Electric was apprehensive about being able to obtain a net-worth
certificate from the
|
||||||||||||||||||||||||
6 July 2010
|
Issue of internal General Electric emails/
documents evidencing corruption and illegal lobbying
Reproduced
below is another internal GE email sent by Mr. Pratyush Kumar on July 6, 2010
to Mr. Lorenzo Simonelli, Mr. David Tucker, Mr Karan Bhatia, Mr Ashfaq
Nainar, Mr Brett BeGole, Mr Richard Herold, Mr Monish Patolawala anf Mr James
Gerson (all from GE). This email was forwarded by Mr James Gerson on July 8,
2010 to Ms Tara Plimpton, Mr James Winget, Mr Kevin Randall (all from GE) and
to the petitioner. This internal General Electric email sent by Mr Pratyush
Kumar on July 6, 2010 has been filed by the petitioner with her affidavit
dated July 9, 2012. The subject of
this email was “India Update”. This email was an updated version of the
“India Update” contained in the email sent by Mr. Pratyush Kumar on June 7,
2010. This email sent by Mr. Pratyush Kumar on July 6, 2010 stated as
follows:
“Current estimate of timelines for D-Loco
·
RFQ due: Jul 12 … On
track
·
Shortlist: Jul 30 –
Aug 9 … Pushing for before Jul 30
·
RFP Release: Aug
16-31 … Pushing for before Jul 30
·
Price bid: Oct 31 –
Nov 15 … Pushing for before Oct 30
·
LOA: Dec 15-31
·
Appointed Date: Mar
31, ’11 … Clock for deliverables starts then
RFQ Process [Prat/Ash, Jul 12]
·
Pre-Bid held on May
26 … EMD, GE and Phooltas Harsco (a local company from
·
220 acres of land in
possession with 40 pillars for boundary laid out … $4.56MM paid to farmers
·
[As we had
anticipated] asked to harmonize with Electric RFQ … final amendments are not
yet out … we have the draft
·
So far, keeping Jul
12th submission date
·
CSR making rounds …
unclear if they will bid
Letter to IR on D-Loco [Prat/Brett/Tara, Jun 15] … act
after RFQ Submission only if CSR bids
Closed item – no 6000HP at 23T/axle … 2X6000HP
Permanently Coupled Co-Co units at 23 Tons / Axle … idea late in the game,
unlikely but we are exploring
BHEL partnership [Prat/Ash/Brett/Cyrille/, multiple
deadlines]
·
Structure discussed
with BHEL [Prat/Brett/Lorenzo] … Done
·
Circle back to them
with revised Structure 2 [Prat/Brett, Jun11] … Done
Need Help on the following items which has NOT progressed
… must close ASAP to bring BHEL into consortium
·
Set target price for
components supplied from BHEL to GE [Jim Gerson/ Ramesh Mathur, Jun 20]
·
Develop back-to-back
terms [Seema Sapra/ Kevin Randall/ Cyrille Petit, Jun 20]
·
Discussion with BHEL
with Lorenzo and Dave [June 22]
·
BHEL Board meeting
[Last week of June]
·
Negotiations [Prat/Cyrille,
Jul-Aug]
RFQ Prep [Ashish
·
Resolve how to
handle CFO certification on networth [Prat/ Monish/ Puneet] … Done
·
Customer
certificates …selected few [Steve Seip] … Done
·
Responsiveness
requirement [Seema Sapra]
[We will bring BHEL into consortium only after the
propulsion % control JV terms are nailed down. But we need to work on
consortium agreements now] … Done
·
Joint Bidding
agreement with BHEL [Seema Sapra/ James Winget/ Kevin Randall] … Will need
for consortium agreement BEFORE RFP
·
BHEL RFQ
certificates [Seema Sapra / James Winget/ Ashish Malhotra] … Will need for consortium agreement BEFORE
RFP
Bharat Forge [Atulya, Sep 15]
·
Identify items they
want to quote [Atulya/Ramesh, Jun 15] … Done
·
Get firm quotes with
back to back terms [Atulya/ Amol/ Ramesh, Sep 15]
·
Supply agreements
with back to back terms [Atulya/ Amol/ Ramesh/ Seema/ Jamie, Oct 1]
Refreshing model / bid [Jim Gerson/ Gaurav Negi/ Monish,
Oct 1] … Need full team Kickoff [Jim]
·
EPC quotes for factories
and township [Atulya/ Ramesh/ Joel, Jul 15]
·
EHS/ site assessment
etc [Atulya/ Ramesh/ Joel, Aug 15]
·
·
Cost validation [Jim
Gerson, Aug 15]
·
Discussions with
township management vendors [Atulya/ Ramesh/ Joel, Aug 15]
·
Scrub Service model
[Alpna/ Gina, Sep 15]
·
Run Tollgates
[Ashish/ Jim/, various by Oct 15]
Ensure E-Loco concessions get incorporated in D-Loco bid
[Prat/ Ash, Sep 15]
Timeline risks
·
EMD asking for more
time pending deal closure with Cat … EMD told IR that they expect it to close
by End of Sep
·
Railway Minister
changing”
The statements in this email that
corroborate the Petitiner’s complaints against General Electric interalia
are:
·
Shortlist: Jul 30 – Aug 9 … Pushing for before Jul 30
·
RFP Release: Aug 16-31 … Pushing for before Jul 30
·
Price bid: Oct 31 – Nov 15 … Pushing for before Oct 30
General Electric was lobbying for
an expedited bid-process to prevent EMD from being able to submit a bid.
·
CSR making rounds
… unclear if they will bid
Letter to IR on
D-Loco [Prat/Brett/Tara, Jun 15] … act after RFQ Submission only if CSR bids
General Electric intended to use
the tailored IPR clauses in the 2010 DLF RFQ to prevent the Chinese
competitor (CSR) from participating in the tender.
Closed item –
no 6000HP at 23T/axle … 2X6000HP Permanently Coupled Co-Co units at 23 Tons /
Axle … idea late in the game, unlikely but we are exploring
General Electric was lobbying to
introduce these changes aimed at keeping other competitors out of the Bidding
Process.
Ensure E-Loco
concessions get incorporated in D-Loco bid [Prat/ Ash, Sep 15]
Having managed with the help of
pliable and corrupt officials from the Planning Commission and the Railway
Ministry’s Electrical Engineering Directorate to have favourable terms
included in the ELF PCMA (approved by the Cabinet in 2009) even before it was
released to the Bidders, General Electric’s ultimate goal was to get these
concessions incorporated into the DLF PCMA.
Timeline risks
·
EMD asking for more time pending deal closure with Cat …
EMD told IR that they expect it to close by End of Sep
General Electric was lobbying for
an expedited bid process to prevent a bid from EMD. Having earlier already
successfully lobbied for Cabinet approval for a single bidder provision, General
Electric was trying to engineer a situation where it would be the sole
bidder.
Timeline risks
...
·
Railway Minister changing”
The court should direct Mr
Jeffrey Immelt, CEO of General Electric Company to explain on affidavit why a
change of the Cabinet Railway Minister was a “risk” to General Electric’s
bid.
|
||||||||||||||||||||||||
9 July 2010
|
Pre-bid meeting held for ELF
|
||||||||||||||||||||||||
12 July 2010
|
Technical Bids submitted by
General Electric and by EMD for the DLF 2010 tender (Bidding Process).
Issue of shell
company
General Electric Company used an Indian subsidiary (GE
Global Sourcing India Private Limited) as the Bidding entity. GE Global
Sourcing India Private Limited is a shell company which until 12 July 2010 had
not carried on any prior business activity. This shell company was selected
as the Bidding entity by General Electric Company to avoid having to make
mandatory disclosures required under the RFQ read with the Government of India,
Department of Disinvestment ‘Guidelines for qualification of Bidders seeking
to acquire stakes in Public Sector Enterprises through the process of
disinvestment’ issued vide Office Memorandum No. 6/4/2001DDII dated July 13,
2001.
Even the registered office of
this shell company, GE Global Sourcing India Private Limited, as disclosed in
the two applications for prequalification submitted by this shell company for
ELF and DLF on 17 May 2010 and on 12 July 2010 respectively, was “care of”
the registered office of another company. This shell company did not even
have its own separate office.
|
||||||||||||||||||||||||
12 July 2010
|
Issue of tampered/ forged customer
certificate
General Electric’s technical bid for the 2010 Marhowra
tender submitted on July 12, 2010 is also tainted because a forged/ tampered
document has been submitted to the Government of India with this bid. General
Electric employees illegally and without authorization “forward-dated” an
undated customer certificate issued by Kazakhstan Railways and submitted this
tampered/ forged document to the Indian Railways on July 12, 2010 as part of
Respondent 7’s request for
prequalification for the multi-billion dollar Diesel Locomotives Tender.
|
||||||||||||||||||||||||
12 July 2010
|
Issue of internal General Electric emails/
documents evidencing corruption and illegal lobbying
The
petitioner has produced before this court a copy of an email sent by Mr.
Pratyush Kumar on July 12, 2010 to James Gerson, Steve Seip, Kamal Shivpuri,
Joanne Kleinhanz, Gina Trombley, Robert Parisi, Ashfaq Nainar, Ramesh Mathur,
Kevin Randall, James Winget, Randy Biletnikoff, Christopher Morgen, Michael
Lafferty, Paul Zeigler, Alan Hamilton, Vageesh Patil, Deepak Adlakha, Puneet
Mahajan, Alpna Khera, Atulya Dubere, Amol Nagar, Praveena Yagnambhat, Ed
Hall, Gaurav Negi, Ashish Malhotra, Himali Arora (all from GE) and to the
petitioner. This email was copied to Lorenzo Simonelli, David Tucker, Brett
BeGole, Russell Stokes, Monish Patolawala, Joel Berdine, Tara Plimpton, Eric
Ducharme, John Flannery, Tammy Gromacki, Alexander Artman, Karan Bhatia and Richard
Herold (all from GE).
The
subject of this email was “Draft Workplan for D-Loco India Bid” and it
contained an attachment “India D-Loco Update 12 Jul 10 V2.ppt”. The
attachment to this email was drafted by a group of GE executives sitting in
Mr. Pratyush Kumar’s office cabin on July 12, 2010 after lunch-time. This
group led by Mr. Pratyush Kumar also comprised of Mr. Ramesh Mathur, Ms.
Alpna Khera, Mr. Gaurav Negi, and Mr. Ashish Malhotra. The email was
thereafter sent by Mr. Pratyush Kumar at 6:05 pm.
This
email states the following:
“Team, we have pulled together a draft workplan for
D-Loco bid … with estimated dates and names (which are our best guesses and
will require your input). We will set up a kickoff call with the core team
(Pitchers – Catchers for each activity). Please let me know if you have any
questions. Thanks, Prat”
The
attachment to this email “India D-Loco Update 12 Jul 10 V2.ppt” is a six page
power-point document. This email and the attached file are already before the
Delhi High Court in Civil Writ Petition 1280 of 2012 on pages 222-228 as part
of Annexure P-7 to the writ petition.
The
first page of the attachment is a title page which states:
“GE
Transportation
12 Jul 2010”
The
second page contains a flowchart that is titled “D-loco Process Forward” with
the words “Expected timeline” under it. This flowchart has nine boxes
depicting nine milestones in the tender process. This flowchart depicts how
Mr. Pratyush Kumar (GE) expected the diesel locomotive tender process would
unfold. It depicts key milestones and underneath each milestone are bullet
points that highlight key achievements or key targets for GE. These bullet
points also point out the factors/agents that have had an impact on the
outcome or were expected to impact the outcome.
The
first box is for February 18, 2010 and it states “Cabinet approves reversal
to JV”. Under this box are two bullet points. The first reads “Single Bidder
provision intact”. The second reads “Electorate directorate played key role”.
The
second box is for March 23, 2010 and it states “issue new RFQ”. Under this
box are two bullet points. The first reads “No focal point in mechanical:
Missing Shakeel”. The second reads: “Use momentum of E-loco to push”.
The
third box is for May 12, 2010. This date is struck out and replaced by July
12, 2010. This box states “RFQ submission”. Under this box are two bullet
points. The first reads “EMD requested delay”. The second reads “Only 2
Bidders – EMD and GE”. The first three boxes are shaded as they depict
completed events as on the date of the email, i.e., July 12, 2010.
The
fourth box is for July 30, 2010 and it states “Announce qualified bidders”.
Under this box is a single bullet point that reads: “Align RFP with E-Loco.”
The
fifth box is for August 9, 2010 and it states “Issue RFP’. Under this box are
two bullet points. The first reads “Some positive changes”. The second bullet
point reads “E-Loco changes must flow through”.
The
sixth box is for September 14, 2010 and it states: “Pre-Bid meeting(s)”.
Under this box is a single bullet point that reads “Ensure spec / bid
changes”.
The
seventh box is for November 1, 2010 and it states “RFP Submission”. Under
this box are two bullet points. The first reads “EMD expected to bid”. The
second reads “Tender & Appreciation committees will decide preferred
bidder”.
The
eight box is for December 30, 2010. It states “Issue LOA”. Under this box are
two bullet points. The first reads “Rail Minister – approval required”. The
second reads “May require cabinet blessing”.
The
ninth and last box on this page is for March 31, 2011. It states “Appointed
Date”. Under this box is a single bullet point that reads “Contract clock
starts”.
The
first box in the flowchart titled “D-loco Process Forward” conveys that
General Electric was pleased that the single bidder provision remained intact
in the February 18, 2010 Cabinet decision. General Electric had lobbied for
the tender to be awarded even if there was a single bid. At the same time, General
Electric was lobbying for an expedited bid process and for the bid process to
be completed before Caterpillar’s acquisition of EMD closed. EMD would not
have been in a position to bid until its acquisition by Caterpillar was
complete. General Electric was therefore lobbying for and expedited bid so
that EMD not be in a position to bid, with the result that the Railway
Ministry would have accepted General Electric’s bid even as a single bidder.
Even
though this flow-chart concerns the diesel locomotive factory tender, this
chart notes that the Electric directorate of the Railway Board played a key
role in this Cabinet decision to allow a single bid tender. [It is also
pointed out that by June 18, 2010, Mr. Jeffrey Immelt had decided that
General Electric would not bid for the Madhepura electric locomotive factory
tender.]
Issue of corrupt dealings between General
Electric and Mr Shakeel Ahmed, a Railway official
The second milestone on this flow-chart is
the issuance of the diesel locomotive RFQ (Request for Qualification). The
first bullet point states “No focal point in mechanical: Missing Shakeel”.
The language used here suggests a contrast with the situation in the electric
directorate. This language conveys that Mr Pratyush Kumar (General Electric)
had no “focal point” in the “mechanical” directorate of the Railway Board. It
also conveys that Mr Pratyush Kumar (General Electric) did have a focal point
in the Electric Directorate. In the Mechanical Directorate, however, General
Electric was “missing” Shakeel Ahmed. Mr. Shakeel Ahmed was a Railway
Ministry official in the Mechanical directorate in 2008-2009, when GE had bid
for the diesel locomotive factory project. The language used by Mr. Pratyush
Kumar conveys that Mr. Shakeel Ahmed had been General Electric’s “focal
point” in the mechanical directorate in 2008-2009. Mr. Shakeel Ahmed was
‘missing’ in 2010 as he had retired. The reference to “focal point” by Mr.
Pratyush Kumar is a reference to a pliable and corrupt Railway Official who
could be relied upon to favour General Electric and to help deliver the
outcomes that General Electric wanted. Just to be clear, the reference to
“focal point” is not a reference to the Railway Ministry official designated
to accept the tenders and to communicate with the bidders. [The relevant
officer named in the 2010 diesel locomotive factory RFQ for this purpose was
Mr. Santosh Sinha, Director, (Mech Engg)/Works, Ministry of Railways. See
Clause 2.13.3 of the 2010 diesel locomotive factory RFQ.] Mr. Pratyush Kumar
confirms in this document that General Electric was “missing” Shakeel Ahmed
who General Electric had earlier relied upon for support and help in the
Mechanical directorate of the Railway Board. Mr. Pratyush Kumar’s email dated
12 July 2010 confirms that in 2008-2009, during the earlier tender for the
same project, General Electric had access to, was in contact with, and
obtained help from Mr. Shakeel Ahmed, a Railway Ministry official in the
Mechanical directorate.
GE
employees corruptly obtained advice and assistance from a Railways Ministry
official/ advisor Mr. Shakeel Ahmed during GE’s diesel locomotive bid in
2008-2009.
[The
petitioner has independent and personal knowledge of General Electric’s
corrupt dealings with Mr Shakeel Ahmed during the 2008-2009 DLF tender. In
June 2010, the petitioner was informed of such corrupt dealings by a US based
executive (Mr Steve Seip) and a
Steve
Seip from General Electric then told the petitioner and James Winget on this
phone call that the DLF RFQ application that was submitted by General
Electric to the Railway Ministry in 2008 had been vetted by Mr. Shakeel Ahmed,
a senior official in the Railway Ministry. Mr Steve Seip described the
procedure followed for this vetting in detail. He stated that each document
contained in GE’s 2008 DLF RFQ application was after drafting, first sent to
Mr. Shakeel Ahmed in the Railway Ministry for his approval and was included
in General Electric’s RFQ application only after such approval. This RFQ
application vetted by Mr Shakeel Ahmed from the Railway Ministry was then
submitted by GE Global Sourcing India Private Limited to the Railway
Ministry.
This
kind of consultation with and assistance from Mr. Shakeel Ahmed, a Railway
Ministry official, who was directly involved in the tender process for the
Railway Ministry was a corrupt and undesirable practice under the RFQ and
rendered GE for disqualification and blacklisting.
An
investigation into these charges will recover documentary evidence from General
Electric confirming that a Railway Ministry official, Mr Shakeel Ahmed vetted
General Electric’s RFQ application for the DLF Project before it was
submitted to the Railway Ministry in 2008. A detailed investigation and the
examination of General Electric executives and lawyers (including Mr Steve
Seip and Mr James Winget) by investigating authorities will provide
additional details and evidence of these corrupt dealings and will also
provide evidence of bribes paid by General Electric to Mr Shakeel Ahmed in
lieu of his help and evidence of how these bribes were paid.
GE’s
corrupt access to and use of Mr. Shakeel Ahmed in 2008-2009 is also recorded
in the above internal General Electric email dated July 12, 2010 sent by
Pratyush Kumar to a number of persons including to the Petitioner.
The
statement “No focal point in mechanical: Missing Shakeel” in the above internal
General Electric document establishes and is a written admission by General
Electric that in 2008-2009, Mr. Shakeel Ahmed, an official in the Railway
Ministry was assisting General Electric in its bid for the DLF Marhowra
Project. Mr. Shakeel Ahmed was at that time a high-ranking public official in
the Railways Ministry and he was an adviser for the public private
partnership projects, which included the Marhowra and Madhepura locomotive
factory tenders. Mr. Shakeel Ahmed’s dealings with General Electric and the
assistance he rendered to General Electric (including his having vetted General
Electric’s bid documents in 2008-2009 as confirmed to the petitioner by Mr
Steve Seip and Mr James Winget from General Electric) in its bid to secure
the multi-billion dollar diesel locomotive factory tender amount to corrupt
practices.
Mr.
Shakeel Ahmed’s LinkedIn profile shows that from 2006 till October 2009, he
was Executive
Director/ Public Private Partnership & Adviser (Projects) for the Indian
Railways. His LinkedIn profile describes his job as follows:
“Innovative business models for setting up large
Railway Production Units in JV on the basis of Procurement-cum-maintenance
Contract developed from scratch.
• Innovative business model for setting up production units on the basis of long term procurement contract developed. • Preparation of complex two stage bid documents and a host of agreements requiring knowledge of procurement, finance, legal and regulatory issues, taxation, company law provisions, transfer of technology, domain knowledge of manufacturing/maintenance etc. • Preparation of complex bid documents for appointment of reputed consultants on quality-cum-cost criteria done and consultants appointed.”
After his retirement from the Indian Railways, Mr.
Shakeel Ahmed has been working as Chairman cum Managing Director of Hindustan
Copper Limited since October 2009. Mr Shakeel Ahmed is being investigated by
the CBI for corruption during his tenure at Hindustan Copper.]
Mr.
Pratyush Kumar’s flowchart also confirms that General Electric had corrupt
contact with and access to Railway Ministry officials in the electric
directorate during 2010. These corrupt railway officials were helping General
Electric in various ways including by modifying the bid process and bid
documents to suit and benefit General Electric.
The
next bullet point in the second box of the flowchart confirms that General
Electric had access to pliable Railway Ministry officials in the Electric
directorate. It reads “Use momentum of E-loco to push”. It conveys that not
only was General Electric assured of momentum by pliant railway officials in
the electrical engineering directorate regarding the 2010 Madhepura tender,
but that General Electric planned to use the momentum of the ELF tender to
speed-up the tender process for the DLF tender and to lobby for changes to
the bid documents for the diesel locomotive factory (DLF) tender. It conveys that General Electric was
satisfied with and assured of adequate momentum in the electric locomotive
tender because of its influence and corrupt links with officials in the
electrical engineering directorate of the Railway Ministry.
The
fourth milestone in the flowchart is the announcement of the qualified
bidders. The bullet point under the fourth box states “Align RFP with
E-Loco”. Once again this provides evidence and an admission by General
Electric that it was lobbying for the yet to be issued RFP (PCMA) for the DLF
Project to be aligned with the RFP for the ELF Project because General
Electric had managed to introduce favourable changes (“concessions”) in the ELF RFP with the help of pliable and
corrupt Railway Ministry officials in the electrical engineering directorate
and with the help of Mr Montek Singh Ahluwalia and Mr. Gajendra Haldea from
the Planning Commission.
The
fifth milestone in the flowchart is the issuance of the diesel locomotive
RFP. The first bullet point here reads “Some positive changes”. In his email,
Mr. Pratyush Kumar refers to some changes to the diesel locomotive RFP which
were “positive” for General Electric. On the date of this email (12 July
2010), General Electric had in its possession the 2008-2009 cabinet-approved
RFP for the DLF Project. The 2010 RFP for the DLF Project had not yet been released
on July 12, 2010. (The DLF RFP was only released on 11 October 2010.) How did
Mr. Pratyush Kumar from General Electric know on July 12, 2010 that there
were some positive changes in the yet to be released DLF RFP? From February
2009 till July 2010, General Electric had had no official interaction with
the Railway Ministry, or with the Planning Commission on the question of the
new DLF RFP that was still to be issued. So how did Mr Pratyush Kumar (General
Electric) know the contents of the 2010 DLF RFP on 12 July 2010 three months before
the RFP was released? This once again confirms that General Electric had
advance access to and advance knowledge of the internal workings of the
Railway Ministry and unlawful access to internal government documentation on
the DLF and ELF tenders and to internal confidential government deliberation
and decision-making on the Bid Process for these tenders much before such information/
documentation was publicly released. General Electric could not have
“officially” or lawfully known on July 12, 2010 the contents of the still to
be issued DLF RFP.
This
court should direct a senior officer of General Electric Company to state on
affidavit how General Electric was aware of “positive changes” in the DLF RFQ
on 12 July 2010 when this RFQ was not released until 11 October 2010.
The
second bullet point of the fifth milestone in the flowchart is even more
revealing. It reads ““E-Loco changes must flow through”. General Electric’s
internal documents confirm that General Electric wanted the “concessions” introduced
at its behest into the 2010 ELF RFP to be incorporated into the 2010 DLF RFP.
The changes introduced into the 2010 ELF RFP benefited General Electric and
it wanted these “concessions” to be incorporated into the 2010 DLF RFP. These
internal General Electric documents also establish that General Electric was
using its participation in the 2010 ELF tender to lobby for and influence changes
to the bid documents for the DLF factory tender and to influence the DLF
tender bid process.
The
sixth milestone in the flow chart is the pre-bid meetings. Under this box,
Mr. Pratyush Kumar notes that General Electric must “Ensure spec / bid
changes”. Once again this confirms that General Electric wanted further
changes to the product specification and the bid documents in the yet to be
issued DLF RFP. The use of the verb ‘ensure’ suggests that GE was confident
of achieving this. This bullet point must be read along with the statement
under the fifth box. i.e., “E-Loco changes must flow through”.
This
flow-chart shows that General Electric had “managed” to influence the
drafting of the 2010 RFP for the ELF tender and the PCMA contract terms in
this document were modified to introduce “concessions” to General Electric. General
Electric in its own internal documents records its intent to ensure that
these “concessions” introduced into the 2010 ELF RFP be also incorporated into
the DLF RFP. This is clear from the internal General Electric flowchart,
which contains incriminating statements like “Use momentum of E-loco to
push”; ‘Align RFP with E-Loco”; “E-Loco changes must flow through”; and
“Ensure spec / bid changes”. Also confirmed from this flow-chart is the corrupt
access that General Electric enjoyed in 2010 to pliable officials in the Railways
electrical engineering directorate. It
appears from internal General Electric documents that General Electric did
not enjoy similar access to officials in the Railways mechanical engineering directorate,
which was managing the DLF Project. The Railway Board has a number of
directorates. The tender for the proposed diesel locomotive factory is being
managed by the mechanical engineering directorate. The tender for the
proposed electric locomotive factory is being managed by the electrical
engineering directorate.
The
third page of the power-point file attached to Mr. Pratyush Kumar’s email
dated July 12, 2010 contains a timeline titled “D-Loco Bid Critical Path”.
This contains external and internal targets for GE.
Pages
4, 5 and 6 of the document attached to Mr. Pratyush Kumar’s email contain a
chart titled “Work-plan”. This chart has five columns: (i) Key work streams;
(ii) Activities; (iii) Pitcher/India – Catcher/
The
entries for the ninth work stream “Commercial discussions – customer” read as
follows:
The
entries for the thirteenth work stream “External stakeholder engagement” read
as follows:
The date of Mr. Pratyush Kumar’s email is July 12, 2010.
On that date, GE had submitted the RFQ for the diesel locomotive factory
tender. The RFP for this tender was not issued until 11 October 2010. On 12
July 2010, General Electric was not even a short-listed bidder for the DLF
tender. General Electric submitted its application for pre-qualification for
this tender only on 12 July 2010. Yet on 12 July 2010, internal General
Electric communications record that commercial discussions with the
Government of India had been ongoing on the RFP/ PCMA terms even at the
Pre-Bid stage and the goal/ deliverable was to have the ELF PCMA concessions incorporated
into the DLF PCMA and that the DLF RFP/ PCMA would be concluded by September
15, 2010. These statements in internal General Electric documentation are a
clear admission of corrupt activities, illegal lobbying and of corrupt
influence on the Bid Process and the Bid documents.
The court should direct a senior officer of General
Electric Company to explain on affidavit the statement in this internal
General Electric document that the RFP would be concluded by September 15,
2010. Was the decision of the Railway Ministry to conclude the RFP being
taken at the behest of and instructions from General Electric?
On July
12, 2010, Mr. Pratyush Kumar committed to the deliverable “E-Loco terms for
D-Loco”, i.e., GE wanted the concessions from the ELF RFP to be incorporated
into the DLF RFP. Mr. Pratyush Kumar also stated that discussions with the Railway
Ministry on this “deliverable’ were ‘on-going’ and that he expected the RFP
to be concluded/ finalised by September 15, 2010. Discussions between the Railway
Ministry and the bidders on the DLF RFP terms would formally commence only
after the bidders were short-listed/ pre-qualified and after the RFP was
issued The RFP was not issued until 11 October 2010. Yet Mr. Pratyush Kumar
stated on July 12, 2010 that these discussions were ongoing. These written
statements in an internal General Electric document establish that General
Electric was in corrupt contact with Indian government officials and was
engaged in prohibited lobbying for this tender.
The prescribed
two-stage tender process is that bidders are first prequalified on prescribed
technical and financial criteria. The RFP is thereafter issued to qualified
bidders. Subsequent to this, pre-bid conferences are held by the tendering
Authority (in this case the Railways Ministry) where all prequalified bidders
who have purchased the RFP are invited. Commercial discussions do take place
at this stage between the bidders and the tendering Authority, but these discussions
take place through a formal and transparent process where all bidders are
present and are notified. During these pre-bid conferences, short-listed bidders
can ask for clarifications, make suggestions, and raise objections orally or
in writing. These interventions by the short-listed bidders are then
discussed openly in the presence of the representatives of all short-listed
bidders. Written communications received from any single short-listed bidder
are formally shared by the Authority with all other short-listed bidders. Any
clarifications issued by the tendering Authority and/ or any modifications
made to the RFP terms consequent to suggestions received are also formally
communicated in writing simultaneously to all short-listed bidders.
Given
the above formalised process, Mr. Pratyush Kumar’s statement in an internal
GE document sent to several GE executives and officers on July 12, 2010 that
commercial discussions between General Electric and the Railway Ministry on
the DLF RFP terms were ongoing with the objective of concluding the DLF RFP
by September 15, 2010 and that he along with other GE executives (Ash Nainar,
James Gerson, Dave Tucker, Brett Begole and Russell Stokes) would deliver
“E-Loco terms for D-Loco”, unambiguously and irrefutably establishes that
General Electric executives were in corrupt contact with and were engaged in
prohibited lobbying of Railway Ministry and Planning Commission officials.
This
constitutes an admission by General Electric of corrupt dealings and contact
with Railway Ministry and Planning Commission officials in connection with
the tenders for the DLF Project.
|
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1 October 2010
|
Railway Ministry issued letters
to GE Global Sourcing India Limited and to EMD Locomotive Technologies
short-listing them for the 2nd (RFP) stage of the Bidding Process
for the 2010 DLF tender
|
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6 October 2010
|
Pre-bid meeting held for
ELF.
|
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8 October 2010
|
RFP issued for ELF 2010 tender to
short-listed bidders
(According to the Railway affidavit
filed on 14 January 2013 in response to CM 19501/2012, the Empowered
Committee of Secretaries met for ELF on 17 May 2010, 31 May 2010, 10 June
2010, 26 July 2010, and 30 September 2010 to consider and approve changes to
the Bid documents and PCMA for ELF).
Changes were made to the Cabinet-
approved ELF PCMA by the Empowered Committee of Secretaries as a result of
these meetings. These changes have been described in internal General
Electric documents reproduced herein as “concessions”.
The meetings of the Empowered
Committee of Secretaries on 17 May 2010, 31 May 2010, and 10 June 2010 to
discuss the ELF PCMA correspond to the period when General Electric
executives organised meetings between Railway Ministry officials and McKinsey
executives who were evaluating the ELF tender for General Electric.
The first pre-bid meeting for ELF
was on 9 July 2013. At whose behest then did the Empowered Committee of
Secretaries introduce changes into the PCMA before this date and at whose
behest did the Empowered Committee of Secretaries meet for the ELF on17 May
2012, 31 May 2012, and on 10 June 2010?
It is submitted that the Railway
Ministry should be directed to produce the following documents on record in
these writ proceedings:
1.
The ELF PCMA approved by the Cabinet in 2009
2.
The draft ELF PCMA/ RFP issued on 11 June 2010
3.
The ELF PCMA/ RFP issued on 8 October 2010
Dates for submission of financial
bids for ELF repeatedly postponed.
|
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11 October 2010
|
RFP issued for DLF 2010 tender to
short-listed bidders
Dates for submission of financial
bids for DLF repeatedly postponed.
|
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6 Nov 2010
|
Issue of illegal lobbying by General
Electric
A
November 6, 2010 Bloomberg news story quotes General Electric Chairman Mr
Jeffrey Immelt (respondent 8 herein) as having stated:
“We’ve
been hoping to bid on the modernization of the rail sector for 10 years,”
Immelt said, speaking a day after the country’s festival of lights. “If we
ever do get a chance to bid on locomotives in
Mr
Jeffrey Immelt made this statement in a public event during US President
Barrack Obama’s visit to
This statement by Mr Jeffrey
Immelt, again confirms as does Mr John Rice’s statement to General Electric
investors in 2009, that General Electric had been lobbying for the DLF
Project for 10 years and that the Project was specially conceived and created
(with Mr Montek Singh Ahluwalia’s help) only to benefit General Electric.
This statement by Mr Jeffrey
Immelt and Mr John Rice’s statement dated 10 February 2009 constitute public
“admissions” (these even amount to public boasts) by General Electric
executives at the highest level that the DLF Project of the Indian government
has been created at General Electric’s behest and for its benefit.
|
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19 January 2011
|
Pre-bid meeting held for ELF.
|
||||||||||||||||||||||||
14 Mar 2011
|
Issue of illegal lobbying by General
Electric
In
March 2011, Mr Jeffrey Immelt again visited
“We have invested for a
long period of time for the opportunity to successfully bid on a competitive
basis to modernize the railways of
He said, in what
appeared to be only a half-joke, that if the company doesn’t get the chance
to bid for the contract while he is still at the helm, “my own self-worth
would be diminished immensely.”
Just in
case anyone in the audience didn’t get the point, he added: “I would like
that on the record.”
The petitioner submits that the above statement
by Mr Jeffrey Immelt made after the petitioner had sent formal complaints against
General Electric in connection with the DLF and ELF tenders to the Railway
Ministry, looks like a threat from General Electric to the Government of
India that ‘it should proceed with the bid process or else’. Mr Jeffrey
Immelt’s statements made in
The petitioner submits that Mr Jeffrey Immelt
would never make a similar statement with respect to a government contract
either in his own native country, the
|
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30 May 2011
|
Issue of non-investigation by CVC of
complaint of forged customer certificate
Respondent
No. 2 (the CVC) registered a complaint bearing No. 107/11.1 acting on the
Petitioner’s email dated January 11, 2011 reporting the submission of a
forged customer certificate by General Electric with its technical bid for
the DLF RFQ on 12 July 2010. A copy of the letter dated May 30, 2011 received
by the Petitioner from Respondent No. 2 is attached to the writ petition as
Annexure P-5.
The
letter dated May 30, 2011 sent to the petitioner by the CVC referred to the
petitioner’s email letter dated January 11, 2011 and stated that this email
complaint had been registered as complaint no. 107/11/1 and had been
forwarded to Mr A K Maitra, Advisor (Vig), Railway Board for investigation
and submission of a report. The email complaint sent by the Petitioner on
January 11, 2011 stated that the Kazakhstan Railways customer certificate
submitted by GE Global Sourcing India Private Limited for the Marhowra RFQ on
July 12, 2010 was a tampered and forged document.
|
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29 February 2012
|
Writ Petition (Civil) 1280/ 2012
and CM 2770/ 2012 seeking stay of the 2010 ELF and DLF tenders filed.
The prayers in this writ petition
are:
“
|
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7 March 2012
|
Notice issued on writ petition
and on CM 2770/ 2012 to
General Electric Company – respondent
1
CVC – respondent 2
Delhi Police, respondent 3
Railway Ministry – respondent 4
PMO – respondent 5
GE India Industrial Private
Limited – respondent 6
GE Global Sourcing India Private
Limited – respondent 7
Writ Petition adjourned to 19
July 2012.
CM 2770/ 2012 adjourned unheard
to 9 May 2012.
|
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19 March 2012
|
Pioneer news story
The
Pioneer newspaper published a news report on March 19, 2012 titled “US loco giant pits Montek against planners”. It is
relevant to quote the entire news report here. It reads:
“In the
midst of political turmoil over the railway fare hike, an intense fight is
going on in higher echelons of bureaucracy over the selection of bidders for
two locomotive factories that then Railway Minister Lalu Prasad Yadav had
announced for his parliamentary constituency in Bihar in 2009. In the 2009
Railway Budget, Lalu had announced setting up of one electric locomotive
factory at Madhepura and another diesel loco factory in Marhowra on PPP
model.
The process of selection of bidders has pitched two key Ministries — Railways and Finance — against the Planning Commission. Top officials of Railway Board and Finance Ministry have objected to the proposals of Plan panel to change the Cabinet-approved bidding process and supply conditions for these two pending projects, which have reached nowhere in three years. The official communication and file notings available with The Pioneer show that top officials of Railway Board and Finance Ministry protested over the changing of the Cabinet decisions to favour certain bidders by Plan panel deputy chairman Montek Singh Ahluwalia’s Advisor Gajendra Haldea. For executing the bidding process, the Cabinet in 2009 formed an Empowered Committee consisting of officials drawn from Railway Board, Finance Ministry and Planning Commission. The controversies started when Haldea mooted some changes last year in the Cabinet-approved proposal. In case of Madhepura project, senior officials of the Railway Board and Finance Ministry noted down that the minutes of the meeting were also “changed” and “misquoted” to propose major changes in the bidding documents to favour the In a series of communications between the Empowered Committee members, Finance Ministry and Railway Board officials have stated that Haldea’s proposal to change the Cabinet approved bidding procedures and supply conditions would place an extra burden of more than Rs16,405 crore. Sources told The Pioneer, in several meetings of the empowered group, heated exchanges took place and some members alleged that these changes were introduced to suit General Electric — the lone bidder for the project. In the bidding process of Marhowra project also, top officials of the Railways and Finance Ministries protested Haldea’s high-handedness. “Haldea apparently thinks that In the same note, Additional Member (Production Unit) SK Sharma of the Railways wrote that “it is unfortunate that professionalism, probity and regard for highest standards of integrity of the mechanical directorate are being questioned by resorting to sensationalism, misinformation and slander, rather than reasoned debate. It is for the investigators to determine whether this was part of a larger agenda aimed at compromising the Indian Railways interest.” The Finance Ministry officials also expressed displeasure on changing of Cabinet-approved bidding and supply conditions. A Railway Board note of June 28, 2011 read, “Economic Affairs Secretary R Gopalan specifically asked financial commissioner the decisions of the Empowered Committee at the behest of the bidders will need to be seen with regard to their financial aspects so as to ensure that gaming by the bidders is ruled out and Railways interest will not be compromised. The minutes do not include these concerns of the Secretary, Economic Affairs.” In a communication to Montek on February 9, Planning Commission Member Secretary Sudha Pillai questioned the authority of Haldea for approving the changed proposals, which he himself mooted. “Subsequently, several amendments that were proposed to the terms approved by the Cabinet were also admittedly authored by him. These proposals altering the terms of the proposed contracts in significant ways were quickly endorsed by the Infrastructure Division (headed by Haldea), bypassing me on some occasions. “However, these amendments when subjected to detailed discussion and scrutiny by the Empowered Committee were found to have serious implications which had not been adequately addressed. It was clear that these amendments were not subjected to independent and impartial scrutiny. This created a very embarrassing situation for me as a member of the Empowered Committee,” said Sudha Pillai in a communication to Montek.”
This
news report was published on March 19, 2012 after the Delhi High Court had
issued notice on Civil Writ Petition 1280 of 2012 on March 7, 2012. This
report also confirms that contract terms and bid processes were manipulated
in order to benefit General Electric. This news report goes on to name
Planning Commission officials who stand accused in internal Government of
India documents of manipulating the bids for the impugned tenders in order to
help General Electric obtain the lucrative diesel locomotive factory contract.
This report also names and quotes government of
This court should direct the
Planning Commission, the Railway Ministry and the Finance Ministry to produce
on the record of these writ proceedings, the documents mentioned in the
Pioneer news report.
As reported by the Pioneer
newspaper, government officials from several departments have accused Mr
Montek Singh Ahluwalia and his close aide and advisor Mt Gajendra Haldea of
favouring General Electric and of introducing changes to the ELF and DLF bid
documents at the behest of General Electric and at the cost of the Indian
exchequer. Charges have been levelled that Mr Gajendra Haldea also mis-recorded/
altered minutes of government meetings to prevent objections to such unjustified
concessions from being recorded.
The account narrated in the
Pioneer newspaper shows that Mr Montek Singh Ahluwalia and Mr Gajendra Haldea
were interfering in the governmental process of finalising the bid documents
for ELF and DLF even though neither of the two had an official role to play
in this process.
Several corruption scams that
have been exposed in India, show that corruption and improper and malafide
decision-making is usually facilitated by government advisors/ ministers/
bureaucrats taking decisions without any accountability by interfering in
formal decision-making procedures and later distancing themselves from any
responsibility for the unsupportable decision.
The 2G scam has disclosed how the
PMO and the Attorney General contributed
to the improper and corrupt decision-making in allocating 2G licences
at a huge loss but managed to evade all responsibility/ blame for these
decisions because their role was played outside the official decision-making
procedures.
Even in the Enron scandal, the
approval to the misconceived Dabhol power project (in which General Electric
was also involved) was given by Mr Montek Singh Ahluwalia, even though this
approval needed to come from the CEA. Corruption is facilitated within the
government by by-passing official decision-making procedures so that the
person actually taking the corrupt decision can later disclaim any
accountability. No one has till date been held to account for the massive
pecuniary, resource, and opportunity loss caused to the Indian State and to
the Indian public by the completely infeasible Dabhol/ Ratnagiri project
which has again stopped functioning.
Even in the present case, both Mr
Montek Singh Ahluwalia and Mr Gajendra Haldea were interfering without any
authority in a task that had been delegated by the Cabinet to an Empowered
Committee of Secretaries. Neither Mr Montek Singh Ahluwalia nor Mr Gajendra
Haldea were members of this committee. With what authority then and on whose
behalf was Mr Gajendra Haldea proposing changes to the ELF and DLF bid
documents and also approving these changes bypassing even the Secretary to
the Planning Commission who was an appointed member of the Empowered
Committee? With what authority was Mr Gajendra Haldea participating in
meetings of the Empowered Committee and altering minutes of these meetings
despite protests by other participants?
The petitioner herself attended
2-3 pre-bid meetings for the ELF/ DLF tenders in 2010 along with General
Electric executives. The petitioner recalls the presence of Mr Gajendra
Haldea at some of these meetings. Whenever Mr Gajendra Haldea was present for
Railway pre-bid meetings he essentially chaired those meetings with all
railway officials including railway board members deferring to him.
Mr Gajendra Haldea is a retired
bureaucrat and his official engagement is as an advisor to Mr Montek Singh Ahluwalia.
Mr Gajendra Haldea’s official position therefore does not confer on him the
authority to chair railway pre-bid meetings. Where does Mr Gajendra Haldea
derive this informal authority within Indian government processes? It is
clear that Mr Gajendra Haldea is merely a representative of Mr Montek Singh
Ahluwalia.
Yet experience with past scams
and corruption within the government shows, that in case of any questions
being raised later on the propriety of the ELF and DLF bid documents, the
blame would have fallen only on the Empowered Committee and on Railway
Ministry officials with Mr Montek Singh Ahluwalia and Mr Gajendra Haldea evading/
disclaiming all blame/ responsibility for changes sponsored by them.
|
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2 April 2012
|
Outlook
More
sordid details about the corruption plaguing the ELF and DLF tenders were
published by Outlook
“Eye On Infrastructure - Models are being developed to allow private players to
enter in fixed rail infrastructure—stations, high-speed lines, manufacturing
of locos, coaches, wagons—in the form of public private partnership (PPP)
projects.’
It also
noted that tailor-made tenders and manipulated bid-processes were being
resorted to by government agencies and officials involved in these high-value
PPP projects.
The
Outlook India report stated:
“Change The Rules
- Planning Commission bid to change bidding process for two PPP locomotive
plants in
The
news report highlights the involvement of the Planning Commission and Mr. Sam
Pitroda in the push behind this privatisation drive. It states:
·
Senior government
and railway officials say Dinesh Trivedi’s railway budget was crafted with
the major backing of the Planning Commission in a manner not seen during the
tenures of previous railway ministers Laloo Prasad Yadav and Mamata Banerjee.
·
Trivedi’s proximity
to railway reforms panel head Sam Pitroda is grist for the gossip mills in
Rail Bhavan. There are some who view a potential conflict of interest in
Pitroda residing at Trivedi’s
·
Trivedi has gone on
record in TV interviews to say that he had approached American investor
Warren Buffett to “invest” in railway bonds and promised to clean up the
railways to ensure this.
This
report exposes the corruption and rule-tweaking in the impugned locomotive
factory tenders. The Outlook India article states:
“Experts point out that huge concessions are expected to
be granted to attract private investments. Currently, there are over a dozen
departments handling various PPP projects. The proposal to have a dedicated
railway board member looking at PPPs has been shot down by the new minister.
This is unfortunate as there is no transparency or accountability in how
these projects are being formulated or operated. All this should set alarm
bells ringing.
Apart from genuine fears about corruption and tweaking of
rules, there is also the concern that millions of consumers who rely on the
railways could end up suffering and paying higher tariffs. …
The controversies have already begun. The basic flaw with
the railways following the PPP mode to augment resources for infrastructure
development is the lack of a sound model. Currently, the railway ministry is
relooking at the proposal for setting up two new locomotive factories in
But despite two cabinet approvals, the process of
awarding the contract has been put on indefinite hold after differences
cropped up between members of the railway board and the Planning Commission.
In fact, even within the Planning Commission, questions have been raised
about changing of contract terms to benefit General Electric. Such changes
were to be done only by an inter-ministerial group. As charges of tweaking
terms of contracts fly against Planning Commission advisor Gajendra Haldea,
he defends himself, saying, “The bid document and bid process for electrical
locos was completely transparent, fair and competitive.”
Associated with the process of evolving the PPP
structure, Haldea states that “any suggestion that I made any changes at my
level in the contract is complete hogwash”. He points out that there are only
four manufacturers of the kind of locos being procured and all of them are
competing for the contracts. Highly-placed sources in the know point out that
the freeze in decision-making on the
Not all PPPs have gone wrong, avers former railway board
chairman Vivek Sahai, who says experiments like the wagon investment scheme
have proved to be a win-win situation for both the railways and the private
party. However, as the Bihar PPPs show, for setting up manufacturing units
(like the two proposed locomotive plants) it is still uncharted territory.
Many contracts are coming under scrutiny for questionable clauses to suit
investors.”
The
Outlook India news story quotes Mr. Gajendra Haldea, (advisor to Mr Montek
Singh Ahluwalia) as having stated (about the electric locomotive factory
tender) that ‘there are only four manufacturers of the kind of locos being
procured and all of them are competing for the contracts.’ This statement by
Mr. Gajendra Haldea’s is false and misleading. As pointed out hereinabove,
General Electric does not manufacture electric locomotives at all. Therefore
General Electric is not a manufacturer of electric locomotives as misrepresented
by Mr Gajendra Haldea to Outlook magazine and to the public at large. In
2008-2009, General Electric was ineligible for the Madhepura electric
locomotive factory project. The tender eligibility conditions were diluted
and tailored in the 2010 Madhepura RFQ to enable General Electric to
participate in this tender. The Government of India must inform this Hon’ble
Court as to how a company (General Electric), that does not even manufacture
electric locomotives, and which not possess the demonstrated technology to do
so, was short-listed in a multi-billion dollar global tender to set up a
factory to manufacture electric locomotives on government land, with assured
government funds, and with an assured and guaranteed government order for 800
electric locomotives to be supplied and maintained over a period of ten
years. As already explained hereinabove, the eligibility conditions in the
2010 Madhepura RFQ prevented all other international manufacturers/
consortiums (apart from Siemens, Alstom and Bombardier) from participating in
this tender. The bid specifications for the 2010 RFQ were tailored to ensure
that the competition would be open only to Siemens, Bombardier, Alstom and
General Electric. Several other potential suppliers were kept out. While Siemens,
Bombardier and Alstom are reputed manufacturers and suppliers of electric
locomotives, the Government of India needs to explain why was the electric
locomotive factory tender opened up to General Electric and why were other
potential bidders including from Japan and China not allowed to participate
in the bid.
Along
with its April 2, 2012 news-report, Outlook
“6.
Railway Production Units
It is
well known that much of our existing rolling stock, both wagons and
locomotives, is outdated and needs to be modernised. The White Paper also
makes reference to this as far as wagons are concerned, but the same is
equally important for locomotives. This is especially so given the increased
importance of energy efficiency in a world which faces challenges due to
climate change.
For
existing factories for production of rolling stock it is worth delinking them
from the Railways as a service provider, and spinning them off into separate
public sector units. Railway staff in the existing production units can, if
they wish, remain on the rolls of the Railways until they retire, but new
staff should be recruited by the corporation as a PSU. Spinning of Railway
production units into separate corporations may be resisted because of tax
implications but it should be possible to agree with the Finance Ministry to
a tax-reimbursement arrangement for the next ten years.
As for
new factories, these should be built outside the Railways through strategic
partnership with qualified parties who can bring the right technology and can
be given incentives to indigenise production. The Railways have seen a great
deal of robust investor interest for production of state-of-the-art
locomotives and also passenger coaches. However, far too much time has been
wasted. We need to bring these initiatives to closure, in order to enhance
public confidence in our resolve to modernise the Railways”.
Evident
from this note authored by Mr Montek Singh Ahluwalia, is the fact that the
ELF and DLF Projects have been created at his instance and were not even part
of the Railway Ministry white paper.
Larger public interest issues
Accepting
the premise that the Indian railway locomotive stock needs to be modernised
and upgraded, the ELF and DLF Projects as conceived are clearly not the right
approach.
The end
result of the DLF and ELF Projects will be to hand over the locomotive
manufacturing industry in
It is
also pointed out that with more and more aggressive world trade rules, the
Government of India will not be able to insist on indigenisation of
manufacture.
Also,
there is a larger public and national interest aspect at stake of the future
of the manufacturing sector in
Locomotive
manufacture is not rocket science. If the government is now reversing its
decision to nationalise the locomotive industry by again opening up this sector
to private firms, then why should Indian industrial firms not be invited/
encouraged to get into this sector.
The
consequence of the government’s decision for the ELF and DLF projects as
presently conceived will be that in ten years time, locomotive manufacture in
These
multinational manufacturers will then dominate the locomotive manufacture
industry in
It is
also the obligation of the Indian state to promote Indian industry. Does the Government of India want
|
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19 July 2012
|
Writ Petition and CM 2770/ 2012
for stay of the impugned tenders listed before Justice Rajiv Shakdher who
adjourned the matter unheard to 12 October 2012.
|
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12 October 2012
|
Writ Petition and CM 2770/ 2012
for stay of the impugned tenders listed before Justice Rajiv Shakdher who
adjourned the matter unheard to 12 April 2013.
Notice of the writ petition
issued to respondents 13 to 17 (Siemens, Alstom Projects India Limited,
Bombardier Transportation
|
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8 November 2012
|
Petitioner moved CM 18324/ 2012
seeking clarification that notice of the writ petition had been issued to
respondents 13 to 17. This was clarified.
(Respondents 13 to 17 (Siemens,
Alstom Projects India Limited, Bombardier Transportation India Limited, EMD
Locomotive Technologies and BHEL), have all been served in this matter and
all (except BHEL) have entered appearance through counsel.
|
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19 November 2013
|
Petitioner moved CM 18642/ 2012
seeking interalia issue of notice of the writ petition to the corporate
officers of General Electric (respondents 8. 9. 10 and 11), which direction
was issued in court but was unclear in the order signed by Justice Rajiv
Shakdher.
|
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26 November 2012
|
Petitioner moved CM No.18862/2012 seeking
clarification that order dated 19 November 2012 issued notice of the writ
petition to respondents 8.9, 10, and 11.
Justice Rajiv Shakdher again
ambiguously stated in his order: “According to me, no clarification is necessary.”
|
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26 November 2012
|
Justice Rajiv Shakdher passed an
unsustainable and uncalled for order directing the court registry not to list
further applications filed by the Petitioner.
The writ petition had been
earlier fixed for hearing by Justice Rajiv Shakdher for 12 April, 2013.
This meant that the writ petition
would not have come up for hearing before the court until 12 April, 2013 and
the petitioner would have been unable to move any application seeking interim
relief in the meantime.
|
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27 November 2012
|
First attempt by Prime Minister Manomohan Singh, PMO and Mr Montek
Singh Ahluwalia to over-reach this court
Taking a clear advantage of the
unsustainable order dated 26 November 2012 of Justice Rajiv Shakdher, the
Prime Minister, Dr Manmohan Singh and Mr Montek Singh Ahluwalia attempted to
over-reach the court and push through the impugned tenders by convening a
meeting to review progress on the tenders for the ELF and DLF Projects and by
directing that: “The bids for the Madhepura Project
will be called by 31 December 2012 and the project will be awarded before the
Railway Budget. The IMG set up under the CCEA approval will consider and
approve any necessary changes to documents. Timelines for the Marhowra
Project will be announced by December 15.”
This meeting at the PMO was
attended by Prime Minister Manmohan singh, Mr Montek Singh Ahluwalia, Mr C
Rangarajan, Mr Pavan Bansal, Mr Surya Prakash Reddy (MoS for railways), Mr
Ranjan Chaudhary (MoS for Railways), Mr Vinay Mittal (Chairman Railway
Board), Mr Pulok Chatterji (PMO, Mr B V R Subrahmanyam (PMO), Mr Krishan
Kumar (PMO).
Were the participants at this
meeting made aware of these writ proceedings and the complaints and evidence
produced on record in these proceedings?
|
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5 December 2012
|
A
Division Bench of this
“5 December 2012
CM 19197/ 2012
1.
In view of the
prayers made in the writ petition, we are of the opinion that the writ
petition has to be treated as one pertaining to “Tenders” and as per the
rules of this Court required to be listed before a Division Bench.
2.
The application
stands disposed off directing the Registry that the writ petition should
henceforth be listed before the roster bench, on January 23, 2013”.
|
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6 December 2012
|
Second attempt by Prime Minister Manomohan Singh, PMO and Mr Montek
Singh Ahluwalia to over-reach this court
In another attempt to over-reach
the court, the PMO issued a Press Release stating:
“Madhepura/Marhowra PPP Loco
Factories:The bids for the
Madhepura Project will be called by 31 December 2012 and the project will be
awarded before the Railway Budget. The IMG set up under the CCEA approval
will consider and approve any necessary changes to documents. Timelines for
the Marhowra Project will be announced by December 15.”
|
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6 December 2012
|
Petitioner filed CM 19370/ 2012
pointing out that Mr Nanju Ganpathy/ AZB & partners had been appearing
for Respondents 1, 6 and 7 (the three General Electric respondents) since 9
May 2012 without vakalatnamas.
|
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7 December 2012
|
Vakalatnamas were filed by Mr
Nanju Ganpathy/ AZB & Partners for the three General Electric respondents
but these were defective as they did not disclose the source of authority of
the signatory.
|
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10 December 2012
|
CM 19370/ 2012 was listed before
court when Mr Nanju Ganpathy lied to the court that vakalatnamas had been
filed earlier but were not on record. It was also stated that fresh
vakalatnamas had been filed on 7 December 2012. (These vakalatnamas are defective).
|
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12 December 2012
|
CM 19501/ 2012 moved by
petitioner for stay of the impugned tenders.
The order passed directed:
“As desired by learned counsel for respondent
No.4, the application is directed to be listed on December 19, 2012, by which
date learned counsel for respondent No.4 would obtain instructions and inform
the likely date by which financial bids are intended to be invited and opened
by the Indian Railways pertaining to the two tenders qua which the writ
petition relates i.e. the tenders pertaining to Marhowra and Madhepura; being
tenders Global RFQ No.2010/ME (PROJ)/4/MARHOWRA/RFA and RFQ No.2010/ELECT.
(DEV0 440/1(1)).”
|
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14 Dec 2012
|
CM 19683/ 2012 filed by
Petitioner for declaration that the vakalatnamas filed on behalf of General
Electric respondents on 7 December 2012 were defective and invalid.
This application has not been
heard.
|
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17 Dec 2012
|
CM 19820/ 2012 filed placing on
record additional facts in support of CM 19501/ 2012 seeking stay of the 2010
tenders.
|
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17 December 2012
|
Issue of PMO pressure on Railway Board
Railway Board chairman wrote to
Principal Secretary of Prime Minister conveying endeavour to meet the
deadlines imposed by the Prime Minister on 27 November 2012.
|
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19 December 2012
|
C.M.No.19501/2012 for stay of the impugned tenders
was listed before court and the following order was passed:
“1. Learned ASG informs that the matter pertaining to finalization of the two tenders referred to in the order dated December 12, 2012 needs various procedural steps to be taken and that the first step would be the approval by Empowerment Committee of Secretaries comprising Chairman Railway Board, Financial Commissioner Railways, Member Electrical Railway Board, Member Mechanical Railway Board, Secretary Planning Commission, Secretary Department of Economic Affairs and Secretary Department of Legal Affairs to the bid documents and accord approval thereto, which step is likely to be completed by December 31, 2012. It is only thereafter that the financial bids would be invited on or around March 31, 2013. Meaning thereby, that by January 16, 2013 i.e. the date fixed in the matter to consider issues which were noted in the order dated December 10, 2012, the financial bids may not be invited; far from the tender being finalized. 2. List the application on December 20, 2012.” |
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20 December 2012
|
CM 19501/ 2012 for stay of the impugned tenders
listed before court but not heard.
|
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21 December 2012
|
CM No.19501/2012 for stay of the impugned tenders
and CM No.19820/2012 (providing additional facts in support of CM 19501/
2012) listed before court, but not heard.
Order passed directed as follows:
“1. Learned Additional Solicitor General of
2. Rejoinder, if any, desired to be filed by the petitioner may be handed over to the Court but after advance copy is served to counsel for respondent No.4 latest by January 15, 2013. 3. The two applications would be listed on the date fixed i.e. January 16, 2013.” |
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14 Jan
2013
|
Reply filed on behalf of Railway Ministry to CM
19501/ 2012.
|
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14 Jan 2013
|
CM 522/ 2013 filed seeking declaration that
vakalatnamas filed on behalf of General Electric respondents on 17 December
2012 are also defective and invalid.
This application has not been taken up for
consideration.
|
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15 Jan 2013
|
Petitioner filed partial rejoinder to Railway
reply to CM 19501/ 2012.
|
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16 January 2013
|
CM No.19501/2012 for stay of the impugned tenders
and CM No.19820/2012 (providing additional facts in support of CM 19501/
2012) listed before court but not heard because Bench stated that it could
not devote adequate time to hear the matter. Matter sent to Chief Justice
with recommendation to constitute a Special Bench.
Chief Justice rejected the possibility of a
Special Bench as infeasible.
|
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23 January 2013
|
CM No.19501/2012 for stay of the impugned tenders
and CM No.19820/2012 (providing additional facts in support of CM 19501/
2012) listed before court but not heard because Bench released the matter.
|
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24 January 2013
|
CM No.19501/2012 for stay of the impugned tenders
and CM No.19820/2012 (providing additional facts in support of CM 19501/
2012) listed before court but not heard because Bench released the matter.
|
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30 January 2013
|
CM No.19501/2012 for stay of the impugned tenders
and CM No.19820/2012 (providing additional facts in support of CM 19501/
2012) listed before court but not heard because Bench released the matter.
|
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1 February 2013
|
CM No.19501/2012 for stay of the impugned tenders
and CM No.19820/2012 (providing additional facts in support of CM 19501/ 2012)
listed before court but not heard because Bench released the matter.
|
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4 February 2013
|
Writ Petition, CM No.19501/2012 for stay of the
impugned tenders, CM No.19820/2012 (providing additional facts in support of
CM 19501/ 2012) and all other pending applications listed before Justice Gita
Mittal and Justice Midha. Matter adjourned to 16 May 2013 without hearing
because Bench stated it did not have time to hear the matter.
|
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26-27 February, 2013
|
Petitioner-whistleblower a woman lawyer starts to
sleep in her car at night parking it on public streets because she has no
place to stay after her applications for protection, housing, medical
treatment, and financial assistance remain unheard.
|
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28 Feb 2013
|
False, unauthorised and evasive affidavit filed
purportedly on behalf of CVC by Mr R V Sinha, who has not produced a
vakalatnama on record.
|
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8 March 2013
|
Issue of Planning Commission interference in Bid Process for ELF and
DLF
As per Railway affidavit dated 15
May 2013, on directions of Prime Minister Manmohan Singh, the PMO constituted
Informal Group of Ministers (IGOM) to resolve and forge consensus on issues
relating to ELF Project terms because of divergence of views between the
Railway Ministry and the Planning Commission.
|
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18 March 2013
|
CM 3380/ 2013 moved by Petitioner
for impleadment of Siemens AG and for issue of notice to Siemens AG.
Directions given in court for
notice of CM 3380/ 2013 to Siemens AG, but signed order excluded this
portion.
|
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1 April, 2013
|
CM 3855/ 2013 moved by Petitioner
for impleadment of Siemens AG and for issue of notice to Siemens AG.
Application adjourned without hearing and without reasons to 18 April 2013. This
application was then adjourned to 16 May 2013 and later to 18 July 2013.
|
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3 April 2013
|
Petitioner filed four additional
affidavits in the writ petition.
One of these affidavits placed on
record true copies of email correspondence
exchanged between the Petitioner and General Electric in 2010, 2011 and 2012
after General Electric terminated the Petitioner’s employment in violation of
its whistleblower protection policies and whistleblower protection laws.
These documents establish that General Electric’s alleged internal
investigation was fraudulent and intended to cover up the petitioner’s
whistleblower complaints. These documents provide additional evidence in
support of the petitioner’s complaints of corruption, forgery, bribery,
fraud, obstruction of justice and other illegal activities that General
Electric’s employees engaged in, in connection with the impugned Madhepura
and Marhowra tenders and in connection with the 2008-2009 tender for the
Marhowra Project and in connection with ongoing shareholder lawsuits filed
against General Electric Company in the New York District Court, SDNY.
The second affidavit placed on
record copies of emails sent by the Petitioner to
the Supreme Court, the Delhi High Court, the Police Commissioner and to
various other authorities between 1 April 2013 and 26 February, 2013
recording interalia how the petitioner has been compelled to spend the night
in her car since the end of February 2013.
The third affidavit placed on
record copies of some emails sent/ received by the
Petitioner during her employment with General Electric in 2010. These
documents are relevant for the present matter as they establish the truth to
counter the false attempt by General Electric (acting through an unauthorised
signatory and unauthorised counsel) to tarnish the petitioner’s reputation
and work tenure at General electric. The petitioner had more relevant emails
in her possession but some of these were removed from the petitioner’s home
in Jangpura Extension on 30 May 2012 (before the petitioner had scanned them)
during the unlawful eviction carried out in the Petitioner’s absence and when
all her belongings including these emails were removed with police assistance
and have till date not been returned to the petitioner.
The fourth affidavit interalia
placed on record important information pertaining to the issue of Mr Vinod
Sharma, which is repeated below in this application.
|
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3 April 2013
|
Unauthorised, false and
perjurious Sur-rejoinder filed on behalf of General Electric by AZB &
Partners purporting to represent the General Electric respondents without
proper vakalatnamas.
|
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3 April 2013
|
As per Railway affidavit dated 15
May 2013, Railway Ministry wrote to PMO seeking to raise both ELF and DLF
issues before the IGOM constituted by the Prime Minister.
|
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11 April 2013
|
Writ Petition listed before
Registrar.
Counsel for respondent 14 (Bombardier
Transportation India Limited) and Counsel for respondent 16 (EMD Locomotive
Technologies) sought time to file counter affidavits.
|
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22 April 2013
|
Issue of third and most outrageous attempt by the Government of
As per Railway affidavit dated 15
May 2013, Informal group of Ministers (IGOM) meeting held – decision taken to
cancel the 2010 Bidding Process for both ELF and DLF and to issue new RFQs
for both ELF and DLF
This IGOM was comprised of Mr P
Chidambaram, Mr Montek Singh Ahluwalia and Mr Pavan Bansal.
|
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26 April 2013
|
Issue of third and most outrageous attempt by the Government of
As per Railway affidavit dated 15
May 2013, Railway Ministry submitted note to Cabinet seeking approval for
cancellation of 2010 tenders for ELF and DLF, and seeking approval for
initiation of new tenders for both ELF and DLF by issuing news RFQs.
|
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1 May 2013
|
Issue of third and most outrageous attempt by the Government of
As per Railway affidavit dated 15
May 2013, Cabinet meeting held where proposal for cancellation of the
impugned tenders approved with direction that new RFQs for ELF and DLF be
issued by 6 May 2013 and new RFPs for ELF and DLF be issued by 6 July 2013.
|
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6 May 2013
|
Issue of third and most outrageous attempt by the Government of
New RFQs for ELF and DLF issued
by Ministry of Railways
|
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15 May 2013
|
Issue of third and most outrageous attempt by the Government of
Affidavit of Mr Nihar Ranjan Dash
disclosing these new developments filed without serving a copy on the
petitioner. This affidavit was deliberately filed in court late on 15 May
2013 so that it would not be available on the court record on 16 May 2013.
|
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16 May 2013
|
Issue of third and most outrageous attempt by the Government of
Affidavit filed by Mr Nihar
Ranjan Dash not on the court record. No appearance for the Railway Ministry
either by the ASG (Mr Rajiv Mehra) or by the Railway Counsel (Mr R N Singh).
Court not informed of these new
developments.
Writ petition adjourned unheard
to 18 July 2013.
CM 6096/ 2013 moved by Petitioner
seeking recusal by Justice Gita Mittal and Justice Deepa Sharma adjourned to
18 July 2013.
Several unwarranted statements
made in the order dated 16 May 2013 by Justice Gita Mittal and several
unwarranted directions issued.
|
||||||||||||||||||||||||
22 May 2013
|
Writ petition again listed before
court on 22 May 2013 along with CM 6417/ 2013. Once again there was no
appearance by Counsel for the UOI (PMO), the CVC or the Railway Ministry
despite the fact that this new application expressly seeks relief against the
CVC and the Railway Ministry and advance copies of this application were
served on all parties.
|
||||||||||||||||||||||||
29 May 2013
|
Petitioner-whistleblower continuing
to sleep in her car without protection since 27 February 2013.
Delhi Police has failed to comply
with the court’s order dated 18 April, 2013 asking the Police Commissioner to
take immediate steps to adequately protect the petitioner’s life and
property.
|
Issue of Mr Vinod Sharma
17. The
reply filed by Respondent No 4 to CM 19501/ 2012 is nothing but a document
cleverly crafted by government lawyers aimed at concealing the true facts from
this court and intended to cover up the corruption, fraud, forgery, bribery and
other illegal and undesirable activities complained of by the petitioner which
are the subject matter of the present petition.
18. The
most glaring example of this attempt to deceive this Hon’ble Court is the
response of respondent 4 on the issue of Mr Vinod Sharma, who having earlier
advised the Railway Ministry on the proposed diesel locomotive factory at
Marhowra, was in clear violation of the 2010 Marhowra RFQ terms advising
General Electric on its 2010 bid for the Marhowra Project. In order to expose
this attempted deception by respondent 4 in its reply dated January 14, 2012 to
CM 19501/ 2012, the petitioner describes below the elaborate and planned
deception that has obviously been masterminded by government counsel. That the
Assistant Solicitor General himself, Mr Rajiv Mehra is appearing for the
respondent 4 and has overseen the drafting of this perjurious and false
affidavit filed by respondent 4 through Mr Gopal Krishan Gupta [executive
director, mechanical engineering, railway board] and Mr Nihar Ranjan Dash
[executive director, electrical engineering (development) railway board] is a
matter of great regret.
19. The
affidavit dated January 14, 2013 filed by respondent 4 states at page 12 on the
issue of Mr Vinod Sharma that: “A bare perusal of the communication dated
07.01.2013 as conveyed by M/s. RITES evidently discloses that Mr. Vinod Sharma
was not part of the team nominated by PWC for working on the advisory assignment
for the setting up of the DLF, Marhowra”. It is submitted that this statement
is unsubstantiated and false and that the authors of the Railway affidavit know
that this statement is untrue and unsubstantiated and therefore to protect
themselves, the affidavit uses the words “evidently discloses”. The phrase
“evidently discloses” is commonly used to distance oneself from a statement of
fact and to deny any personal responsibility for the statement of fact being
asserted. Both Mr G K Gupta and Mr N R Dash therefore in their affidavit dated
January 14, 2013 have denied personal responsibility and ownership of the
statement of fact – did or did not Mr Vinod Sharma at any point act as an
advisor or in fact advise the Railway Ministry on the Marhowra Project.
20. Turning
now to the source of this ‘evident disclosure’, the petitioner submits that as
elaborated hereinbelow this ‘evident disclosure’ is based upon reference to
irrelevant and incomplete documents.
21. The
Railway affidavit states that it wrote to RITES on 27 December 2012 seeking
clarifications on this issue which is described in the affidavit as an issue
with respect to PWC. This letter sent by Mr G K Gupta and addressed to the
Chairman-cum-Managing Director, RITES Ltd is at page 129 of the railway affidavit.
This letter does not even mention or describe the issue pertaining to Mr Vinod
Sharma and does not mention that the writ petition complains that Mr Vinod
Sharma and General Electric’s dealings in 2010 constituted a corrupt practice
on account of Mr Vinod Sharma having previously advised the Railway Ministry on
the Marhowra Project. Instead this letter states: “the petitioner has raised
certain issues related to M/s PricewaterhouseCoopers, who had been engaged by
M/s RITES as consultant for setting up of Diesel Locomotive Factory, Marhowra”.
The next sentence of this letter is very revealing. Instead of providing a copy
of this writ petition to RITES with this letter dated December 27, 2012, Mr G K
Gupta misleads RITES by lying that “The contents of Writ Petition are posted on
website of Delhi High Court”. The letter goes on to state that “You may kindly
get the same examined and submit your comments …”. The letter also states:
“Concerned officers may discuss and seek any clarification on the matter with undersigned
on 28.12.12.” There is a Railway Ministry stamp on this letter dated December
31, 2012. There is no stamp acknowledging receipt of this letter at RITES.
22. The
letter dated December 27, 2012 deliberately omitted to mention/ describe the
nature of the complaint concerning Mr Vinod Sharma. A blatant lie was resorted
to avoid attaching a copy of the writ petition with this letter. Instead of
sending a proper and complete query in writing to RITES, the letter did not set
out the query and was left deliberately opaque. It appears that the real
discussions between officials of respondents 4 and RITES to cover up the Vinod
Sharma issue and to create misleading documentation with intent to mislead this
court took place in private meetings and over the phone. Note that the letter
bears a stamp (for dispatch?) dated December 31, 2012 but the letter mentions
personal meetings to discuss the issue on December 28, 2012.
23. Turning
to the letter dated January 7, 2013 allegedly received from RITES and attached
at page 130 of the affidavit of respondent 4 dated January 14, 2012, it is
pointed out that this letter has not been issued by the Chairman-cum-Managing
Director of RITES. This letter appears to have been issued under the name of
one Mr Anil Vij with the words GGM/ RW&IE printed underneath. The letter
does not bear a full signature and instead has merely been initialled and even
these initials are illegible.
24. Before
examining in detail the contents of the RITES letter dated January 7, 2013,
some incomplete facts and dates that emerge from the affidavit of the Railways
and the RITES letter are set out below:
(i)
11-10-2006 – Railway Board approved appointment of
RITES and approved engagement of a consultancy firm by RITES. [The RITES letter
describes this as a Railway Board letter communicating to RITES “that Railway
Board has approved appointment of RITES for providing consultancy services to
the Ministry of Railways to engage consultancy firm for advisory on setting up
new manufacturing units through International Competitive Bidding under Single
Stage Process based on the RFP framed by PPP cell.”.
(ii)
2-3-2007 – RITES engaged PWC as consultant on behalf of
the Railway Ministry by issuing letter of award of contract to PWC.
(iii)
6-3-2007 – RITES
signed an agreement with PWC on behalf of the Railway Ministry.
25. The
petitioner now turns to the RITES letter dated January 7, 2013 filed with the
Railway affidavit dated January 14, 2013 and draws attention to the following:
(i)
The RITES letter states that the railway board letter dated
11-10-2006; the letter of award dated 2-3-2007 issued to PWC; and the agreement
signed with PWC on 6-3-2007 are annexed to the RITES letter as Annexure 1,
Annexure 2 and Annexure 3 respectively. However, the copy of the RITES
letter placed on record does not contain any of these three documents as
annexures.
(ii)
In the opening paragraph, the RITES letter refers to
“issues relating to M/s PricewaterhouseCoopers raised by the petitioner” and
without elaborating on these and without describing these issues, the RITES
letter states that these have been examined.
(iii)
The RITES letter in paragraph (III) state that: “As
regards the issue of Mr Vinod Sharma raised by the petitioner, it is brought
out that the relevant records have been checked and as per the Technical
Proposal – Part II of M/s PwC of December, 2006, the Team Composition of PwC
for the consultancy assignment mentioned in Para I above, was as under:-“. The
letter then includes a table with 9 names for Technical/ Managerial Staff and a
further 7 names as Support Staff. Mr Vinod Sharma’s name is not included in
this table.
(iv)
The next statement in the RITES letter is: “Further, at
no stage during the currency of the assignment, M/s PwC informed RITES.
Ministry of Railways about any change in the team composition.
(v)
The last relevant statement in the RITES letter reads:
“Thus from the information furnished by PwC, it is seen that Mr. Vinod Sharma
was not a part of the PwC team that worked on the consultancy assignment.”
26. A
copy of a Railway Ministry document downloaded by the petitioner from the website
of the Railway Ministry has been annexed to CM 19501/ 2012 as Annexure P-1. This document titled
“Annexture_1_4.pdf” and
downloaded from http://indianrailways.gov.in/railwayboard/uploads/directorate/O&M/Annexture_1_4.pdf.
contains the following statement on the role of PwC as the consultant to the
Indian Railways for the Marhowra diesel locomotive factory tender:
“Ministry of Railways have appointed a Consultant M/s Price
Waterhouse Coopers for advisory on setting up of new unit.
Final report for the first part, which is on strategy, has
since been received and the consultant has been given a go-ahead for the second
part of the report i.e. bid process management.
A final decision on Joint Venture will be taken based on
the response in the bidding process.
Status on selection of developer for setting up new
Manufacturing Units in Joint Venture:
Draft Agreements (Procurement contract, maintenance
contract and shareholders’ agreement) approved by the Board(MM).
Legally vetted copy of final Land Lease agreement
incorporating views of AM/Adviser’s Committee has been submitted by the
Consultant (PWC) and put up to Board(ME) for approval.
Legally vetted copy of Procurement Contract has been
received from the Consultant. Other draft agreements (Shareholders’ agreement
and Maintenance Contract) are under legal vetting with the Consultlant.
Procurement Specialist for validating procurement contract
hired by the Consultlant, has started work. Work likely to be completed in a
week’s time.
After validation of Procurement Contract and legal vetting
of draft agreements, final bid document (RFP) will be put up for approval by
Board(MM, FC & CRB) and MR. Likely date of submission is 30-04-2008.
A fresh RFQ based on approval by Planning Commission will
be issued shortly.
Further bid process will depnd on the reply to the
reference made to the Ministry of Finance.
Bid process is likely to be completed by
August, 2008.
The project is expected to be completed in about 2 to 2½
years after CCEA’s approval is obtained for going ahead with bidding process
for Joint – Venture.”
27. The
petitioner submits that RITES letter dated January 7, 2013 does not confirm or state
that Mr Vinod Sharma has never acted as an advisor to the Railway Ministry/
RITES for the Marhowra Project. Further, the affidavit filed by respondent 4 on
January 14, 2013 also does not state that Mr Vinod Sharma has never acted as an
advisor to the Railway Ministry/ RITES for the Marhowra Project.
28. The
RITES letter dated January 7, 2013 fails to disclose full and complete facts
about RITES dealings with PwC and fails to provide direct and unambiguous
evidence establishing that Mr Vinod Sharma was never an advisor to the Indian
railways for the Marhowra Project. Instead, the RITES letter refers to
selective, irrelevant and incomplete documentation with intent to mislead and
confuse and from flawed and incomplete disclosure of information and records,
it seeks to mislead this court that Mr Vinod Sharma’s dealings with General
Electric were not a corrupt practice under the 2010 Marhowra RFQ. It is pointed
out that the RITES letter only states that: “Mr Vinod Sharma was not a part of
the PwC team that worked on the consultancy assignment”. This statement is
unsubstantiated. The documents that this statement claims to be based upon are
not produced, and appear to be irrelevant while documents/ records that would
be relevant are suppressed and not referred to.
29. The
RITES letter merely states that the Technical Proposal Part II of PwC of
December 2006 for the consulting assignment mentioned in para 1 of the letter
contained a list of names which does not include the name of Mr Vinod Sharma.
This document has not been produced. It appears to have no connection to the
engagement of PwC for formulation and review of Bid Documents for the 2008-2009
tender for the DLF Project. The intent to misinform and mislead the court is
clear.
30. It
is submitted that a perusal of the RITES letter in the light of the document
annexed hereto as Annexure P -1, shows that PwC performed more than one
consultancy assignment for RITES/ Railway Ministry in connection with different
Projects and PwC has been engaged at different stages.
31. The
assignment refered to in para 1 of RITES letter concerns advisory on new
manufacturing units under single stage bidding. The engagement of PwC to
formulate bid strategy and Bid documents and to review the bids received is
clearly a different and subsequent assignment.
32. The
railway document quoted from hereinabove was created sometime in 2008. This
document deals only with the Marhowra Project and this document contains the
following statement: “Ministry of
Railways have appointed a Consultant M/s Price Waterhouse Coopers for advisory
on setting up of new unit.” Therefore it appears that the Railway Ministry appointed
PwC for advice on setting up the Marhowra Project. This appears to be an
engagement subsequent to the engagement of PwC mentioned in the RITES letter
dated January 7, 2013.
33. It
is submitted that the statement in the Railway affidavit dated January 14, 2013
on the complaint regarding Mr Vinod Sharma is false, unsubstantiated and
unacceptable. The RITES letter stated : “Thus from the information furnished by
PwC, it is seen that Mr. Vinod Sharma was not a part of the PwC team that
worked on the consultancy assignment.” This statement is false,
unsubstantiated, unsupported and not borne out by the information disclosed. The
consultancy assignment referred to is deliberately not produced. It appears
that there was more than one consultancy assignment. It appears there was more
than one PwC team working with RITES/ the Railway Ministry from working on
initial feasibility studies for several manufacturing units and proceeding to
consultancy assignments/ phases for specific units/ projects/ project and bid stages.
This statement by RITES (who was never provided with a copy of the writ
petition nor told about the actual complaint regarding Vinod Sharma) is padded
and misrepresented in the railway affidavit as: “A bare perusal of the
communication dated 07.01.2013 as conveyed by M/s. RITES evidently discloses
that Mr. Vinod Sharma was not part of the team nominated by PWC for working on
the advisory assignment for the setting up of the DLF, Marhowra”. It is
submitted that the RITES letter does not even mention the word “Marhowra” or
the words “diesel locomotive factory’ or the abbreviation DLF.
34. RITES
was not provided with a copy of this writ petition. RITES was not told that the
writ petition complained that Mr Vinod Sharma had engaged in a corrupt practice
by advising General Electric on its 2010 bids for the Marhowra and Madhepura
locomotive factories after he had earlier acted as advisor to the Railway
Ministry for the Marhowra locomotive factory project during his association/
employment with PWC after retirement. RITES was not shown the clause in the
2010 Marhowra RFQ that defined such conduct as a corrupt practice. Therefore
RITES could not have known what would be relevant records that needed to be
checked and whether RITES needed to ascertain facts directly from PWC.
35. It
is submitted that while the letter written to RITES is addressed to the
Chairman-cum-Managing Director, the response is from someone who appears to be
a General Manager. It is submitted the person in whose name the RITES letter
has been issued would not be the appropriate person to respond to a query of
this nature. Normally, a legal officer would handle queries that pertain to
legal or court matters.
36. The
Railway Ministry document quoted from hereinabove shows that the list of names
from PwC’s technical proposal part II dated December 2006 set out in the RITES
letter dated January 7, 2013 is irrelevant. This Railway Ministrt document from
2008 states that: “Final report for
the first part, which is on strategy, has since been received and the
consultant has been given a go-ahead for the second part of the report i.e. bid
process management.” It also states that: “Procurement Specialist for
validating procurement contract hired by the Consultlant, has started work.
Work likely to be completed in a week’s time.” Therefore the procurement
specialist for the Marhowra Project was hired by PWC only in 2008.
37. That an irrelevant and wrong list of names has
been reproduced in the RITES letter dated January 7, 2013 with intent to
mislead the court and that this list does not establish that Mr Vinod Sharma
did not advise the Railway Ministry/ RITES for the Marhowra project is borne
out by the following:
(i)
The
source of this list has not been produced. This court cannot know what this
list signifies unless the document it was attached to is placed before court.
(ii)
This
list is from a proposal made by PWC and not from the actual contract signed
with PWC. The contract with PWC needs to be placed on record so that this court
can see what the contract covered, whether this was the relevant contract, and
what was the team identified in the contract. Prima facie it appears that the
PWC contract referred to in RITES letter dated January 7, 2012 is not the
relevant contract with PWC.
(iii)
The
list is for a proposal to carry out initial feasibility studies into multiple
manufacturing units at the conception stage. Therefore the list included
separate technology experts for passenger coaches, wheels, diesel locomotives
and electric locomotives. These persons would not be required for a advisory
consultancy that drafted and reviewed bid documents for the Marhowra Project,
limited to diesel locomotives. Instead the composition of the team that advised
Railways/ RITES on drafting and reviewing bid documents for the Marhowra
project and which helped Railways/ RITES evaluate the technical and financial
bids for the Marhowra Project in 2008-2009 would necessarily be different from
the proposed team set out in paragraph III of the RITES letter.
37. The Railway affidavit states that:
“Further, RITES have intimated in the said
letter that Clause 4.8.2 of the Request for Proposal issued by the RITES to PWC
for their engagement on the project, reads as under:-
“If it is necessary to replace any person of
Consultant, the latter shall immediately arrange for replacement by a person of
equivalent competence. This shall however be done with the approval of MINISTRY
OF RAILWAYS (MoR)”
Therefore, in case of any change /
replacement in the team composition working on the advisory on setting up new
manufacturing units through International Competitive Bidding under Single
State Bidding Process, PWC was required to take the approval of the Ministry of
Railways.
It may be noted that neither RITES, nor the
Ministry of Railways received any communication/request for approval of any
replacement of any person in the team composition working on the advisory on
setting up new manufacturing units through International Competitive Bidding
under Single State Bidding Process.”
38. It is submitted that the above statement in
the Railway affidavit is false because the RITES letter dated January 7, 2013 attached
to the affidavit does not contain any statement about “Clause 4.8.2 of the
Request for Proposal issued by the RITES to PWC” and in fact does not even
refer to any such clause.
39. The attempt to deceive this Hon’ble Court by
the Railway Ministry through its affidavit dated January 14, 2013 is clear. The
statements made in RITES letter dated January 7, 2013 and the Railway Ministry
affidavit (on page 12) are in respect of the appointment of RITES “for
providing consultancy services to the Ministry of Railways to engage
consultancy firm for advisory on setting up new manufacturing units through
International Competitive Bidding under Single Stage Process based on the RFP
framed by PPP cell.”. Mr Vinod Sharma advised the Railway Ministry for the
Marhowra Project and for the 2008-2009 tender for the Marhowra Project. The
2008-2009 tender for the Marhowra Project was not a single stage tender
process. The Railway Ministry did not pursue single stage bid processes at any
time for the Marhowra diesel locomotive factory or for the Madhepura electric
locomotive factory. It is therefore submitted that in an attempt to deceive and
mislead this Court, the Railway Ministry has used RITES officials to write the
January 7, 2013 letter referring to irrelevant documents instead of relevant
documents and is now attempting to rely upon this misleading letter to mislead
this court through the affidavit dated January 14, 2013.
40. It is submitted that for the reasons set out
hereinabove, the statement in the Railway Ministry affidavit (dated January 14,
2013) on page 12 that “A true copy of the letter issued by RITES bearing
No.2012/RITES/RW&IE/DLF/Marhowra dated 07.01.2013 detailing the list of
persons working in the PriceWaterhouse Coopers team, as communicated to the
answering Respondent is annexed” is also false, misleading and intended to
deceive the court.
41. It is clear that the engagement of PWC by
the Railway Ministry for the Marhowra Project referred to in the Railway
document quoted from hereinabove is not the same engagement of PWC that is
referred to in the RITES letter dated January 7, 2013. The RITES letter relates to the appointment
of RITES “for providing consultancy services to the Ministry of Railways
to engage consultancy firm for advisory on setting up new manufacturing units
through International Competitive Bidding under Single Stage Process based on
the RFP framed by PPP cell.” The engagement of PWC referred to in the Railway
Ministry document reproduced hereinabove is in connection with a two stage bid
process with an RFQ and an RFP stage.
42. For
the reasons set out hereinabove, the statements made by respondent 4 in its
affidavit dated January 14, 2013 in paragraphs 17, 18, 20, and 32 on the issue
of Mr Vinod Sharma are false and incorrect. These statements and the misleading
record produced and sought to be created (in the case of the RITES letter dated
January 7, 2013) by the Railway Ministry are clearly the result of a planned
conspiracy under advice of lawyers, by Railway Ministry officials to deceive
and mislead this court with intent to cover up the corrupt nature of the
dealings between Vinod Sharma and General Electric in 2010. These corrupt
dealings render General Electric liable for disqualification and blacklisting
under both the 2010 Madhepura and Marhowra RFQs. The Railway Ministry acting in
collusion with/ under pressure from the PMO and the Planning Commission has
filed false and perjurious affidavits to cover up General Electric corruption
and to hand over the contract for the Marhowra Project to General Electric in
violation of law, its own contract terms and government of India
guidelines.
43. The
failure of the Railway Ministry to unambiguously affirm on affidavit that Mr
Vinod Sharma has never acted as advisor to the railway ministry for the
Marhowra Project shows that the petitioner’s complaint is correct and General
Electric’s dealings with Vinod Sharma in 2010 constituted a corrupt practice under
the 2010 Marhowra RFQ.
44. The “Sur-Rejoinder Affidavit on behalf of Respondent Nos.
1, 6 and 7” dated 23 March 2013, states on internal page 62:
“ … the Answering Respondents state that GE India did in
fact enter into a written agreement to govern its relationship with Mr Sharma’s
company, Essvee Consultants, effective August 11, 2009. This document, which
did undergo legal review and does contain stringent compliance representations
and warranties in stark contrast to the Petitioner’s baseless allegations to
the contrary, is not annexed hereto because of the confidential and proprietary
nature of the agreement. The Answering Respondents will submit the agreement
under sealed cover if and when directed by this Hon’ble court”.
45. The Mr Sharma in question is Mr Vinod Sharma, a retired
Railway Ministry official, who after retirement worked with
PricewaterhouseCoopers as a consultant and advised the Railway Ministry on the
Project for the proposed diesel locomotive factory at Marhowra and on the
2008-2009 Bidding Process (tender) for this Project.
46. GE Global Sourcing India Private Limited had participated
in the 2008-2009 Bidding Process for this Project but its Bid was not accepted
on account of it being found to be non-responsive. [In its affidavit-in-reply
filed to CM 19501/ 2012, the Railway Ministry has stated in connection with the
2008-2009 Bidding Process for this Project that: “The sole bidder who submitted
the bid was M/s GE Global Sourcing India Pvt. Ltd i.e. the Respondent No. 7. …
After due scrutiny of the bid documents, the bid was discharged as the bid was
found to be non-responsive to the bid conditions”.]
47. Mr Vinod Sharma’s dealings with General Electric in 2010 in
connection with the 2010 Bidding Process for the Project for the proposed diesel
locomotive factory at Marhowra constituted a corrupt practice as defined in
Clause 4.1.3 (a) (ii) of the 2010 RFQ.
48.
The alleged affidavit
sworn on 23 March 2013 by Mr K R Radhakrishnan states that GE India entered
into a written contact with Mr Vinod Sharma’s company called “Essvee
Consultants” and that this contract came into effect from 11 August 2009. The
petitioner has searched the company records maintained by the Ministry for Corporate
Affairs and there exist no records for a company with the words “Essvee
Consultants” in its name. There is no incorporated company in existence in India
which begins its name with “Essvee Consultants”. It also appears as if the
“Essvee” stands for Mr Vinod Sharma’s initials in reverse order. An internet
search shows that there is a website with the domain name http://www.essveeconsultants.com/. The “company
profile” on this website reads:
“Established in 2009, *Essvee Consultants* is a trusted
placement agency providing total recuritment solutions for diverse industries
having its offices in Ajmer (Rajasthan) and Faridabad (Haryana). We
are engaged in providing manpower solutions in India as well as abroad. The
company has been established with the sole objective of dedicatedly serving the
Human Resource Sector with quality service. The company is providing
consultation and value added HR services to Corporate and other small Business
Houses. Our prime focus is on offering HR Services that exactly match the
requirements of our esteemed clients”.
The “management team” and “contact” pages on this website
list the following three names: Sandeep Dutt Sharma, Rajesh Sharma and Rahul
Sharma. All three names share the surname “Sharma” with Mr Vinod Sharma. It is
pointed out that this Essvee Consultants claims to have been established in
2009.
49.
In his alleged
affidavit-in-reply verified on 23 March 2013, Mr K R
Radhakrishnan makes the following statement:
Radhakrishnan makes the following statement:
“The Answering Respondents are unaware of the percentage of
text from the 2010 diesel tender documents that is similar to the earlier
project documents. Further, the Answering Respondents are unaware of what role,
if any, Mr. Sharma or PwC served in reviewing documents associated with the
2008 diesel locomotive tender”.
50.
A clause identical to
Clause 4.1.3 (a) (ii) of the 2010 Diesel RFQ was present in the 2008 Diesel
RFQ. Since a clause of this nature is usually included in all RFQs issued by
the Government of India, why and how did General Electric not know or not
enquire into the role of Mr Vinod Sharma in the 2008-2009 Bidding Process for
the Marhowra Project? This statement is even more unbelievable given that Mr K
R Radhakrishnan also states that the contract signed with Mr Vinod Sharma’s
company in August 2009 was subject to a full legal review. Did General Electric
not engage in due-diligence with respect to Mr Vinod Sharma’s prior dealings
with the Marhowra Project? This again establishes that General Electric is
still attempting to cover up its corrupt dealings with Mr Vinod Sharma.
51. The petitioner was told by Mr Raian Karanjawala in July/
August 2011 that Mr Vinod Sharma might be related to Mr Sunand Sharma who is at
present the country president for Alstom India and who has in his career
worked for General Electric earlier. Mr Raian Karanjawala had asked the
petitioner if Vinod Sharma was Sunand Sharma’s brother. Mr Raian Karanjawala
knows Mr Sunand Sharma personally and as a client.
52. Both GE and Alstom’s applications for the 2010 Marhowra and
Madhepura tenders (respectively) were similar in that these involve consortia
with BHEL. The Petitioner was told by Mr Pratyush Kumar (from General Electric)
that a consortium bid along-with BHEL by GE, would assure it of winning the
contract. This connection between Mr Vinod Sharma and Mr Sunand Sharma raises
the possibility of cartelization between GE, BHEL and Alstom in connection with
the Madhepura and Marhowra tenders.
Issue of General Electric email sent to
Railway Ministry official’s Gmail account on 20 May 2011
53.
This email sent by Mr Ramesh Mathur to Mr Ved Mani Tiwari on May 20, 2011
has been produced by the Petitioner with her affidavit dated July 9, 2012. It
is also part of Annexure P-7 at page 215 to the present Writ Petition. It
reads:
“Dear Sir,
As desired by you, a summary of the
Railway Locomotives supplied two years prior to the application due date is
enclosed.”
The attachment to this email was an
excel file titled “IR AnnexII_I.xls. This email was forwarded to the petitioner
on May 20, 2010 at 10:47 am (it was also sent to Mr. Pratyush Kumar, Mr. Ashfaq
Nainar, Mr. Gaurav Negi, and Ms. Praveena Yagnambhat) by Mr. Ramesh Mathur with
no explanation.
54.
Mr. Ramesh Mathur’s email to Mr. Ved Mani Tiwari was sent without the
petitioner’s knowledge and without any consultation with her. The petitioner is
also not personally aware of why this email was sent or of any prior or
subsequent communication between General Electric executives and Mr. Ved Mani
Tiwari or the Railway Ministry on this issue.
55.
Clause 2.2.2 of the 2010 Madhepura RFQ sets out the conditions for
eligibility for pre-qualification and short-listing. 2.2.2 (A) lays down the
conditions to be met to establish Technical Capacity. The first proviso to
clause 2.2.2 (A) reads: “Provided that at least one third of the Threshold
Technical Capacity shall be from Eligible Projects which were supplied at least
2 (two) years prior to the Application Due Date.”
56.
Therefore, at least 1/3rd of the eligibility threshold technical
capacity is required to be met by locomotive supplies made two years prior to
the application due date. On May 20, 2010, Mr. Ramesh Mathur sent Mr. Ved Mani
Tiwari a summary of locomotive supplies made by General Electric two years
prior to the application due date in an excel chart titled “IR Annex II_I.xls.
The above email sent by Mr. Ramesh Mathur establishes that in the technical bid
submitted on May 17, 2010 for the Madhepura Electric Locomotive factory tender,
General Electric did not provide adequate information or information in the
required format to satisfy the tendering Authority that the condition specified
in the first proviso to clause 2.2.2 (A) had been met by GE. This information was belatedly sent by Mr.
Ramesh Mathur to Mr. Ved Mani Tiwari on the latter’s personal Gmail account
(and not on his official email address - deed@rb.railnet.gov.in)
on May 20, 2010,
three days after the technical bids had been opened on May 17, 2010. That
General Electric found it necessary to supplement its technical bid for the
Madhepura RFQ on May 20, 2010 suggests that without the additional information/
document/ statement provided by Mr. Ramesh Mathur to Mr. Ved Mani Tiwari on May
20, 2010, General Electric’s technical bid as submitted on May 17, 2010 was
non-responsive and incomplete.
57.
Clause 2.19 of the 2010 Madhepura RFQ prescribes the tests for
responsiveness. According to Clause 2.19.1, to be considered “responsive”, an
application must be in the format prescribed by Appendix I; must contain all
required information and documents, complete in all respects; and must contain
this information in the specified formats. Clause 2.19.1 provides that the
Authority will first determine whether an application is “responsive” before
evaluating it for pre-qualification. Clause 2.19.2 provides that the Authority
reserves the right to reject a non-responsive application.
58.
Clause 2.16.1 of the 2010 Madhepura RFQ provides that: “No Application
shall be modified, substituted or withdrawn by the Applicant or on after the
Application Due Date”. Clause 2.16.2 provides that “The modification,
substitution or withdrawal notice shall be prepared, sealed, marked, and
delivered in accordance with Clause 2.13, with the envelopes being additionally
marked “MODIFICATION”, “SUBSTITUTION” or “WITHDRAWAL”, as appropriate. Clause
2.16.3 provides that: “Any alteration/ modification in the Application or
additional information supplied subsequent to the Application Due Date, unless
the same has been expressly sought for by the Authority, shall be disregarded.”
59.
Clause 2.20.1 of the 2010 Madhepura RFQ provides that: “To facilitate
evaluation of Applications, the Authority may, at its sole discretion, seek
clarifications from any Applicant regarding its Application. Such
clarification(s) shall be provided within the time specified by the Authority
for this purpose. Any request for clarification(s) and all clarification(s) in
response thereto shall be in writing”.
60.
Clause 2.24 of the 2010 Madhepura RFQ provides that: “Save and except as
provided in this RFQ, the Authority shall not entertain any correspondence with
any Applicant in relation to the acceptance or rejection of any Application.”
61.
According to Clause
2.16.1 of the 2010 Madhepura RFQ, General Electric was only permitted to modify
its application until the due date. After the due date, General Electric could
not have modified its application or provided additional information unless
this was expressly sought for by the Authority in writing under Clause 2.16.3
or Clause 2.20.1. Under Clause 2.20.1, any request by the authority for
clarification or additional information/ documents had to be in writing. The
Railways Ministry (the tendering Authority) did not make any written request to
General Electric asking it to provide additional/ missing information or
documentation. The information sent by Mr. Ramesh Mathur on behalf of General Electric on May
20, 2010 was therefore not sent in accordance with the rules prescribed in the
RFQ. This email was not in response to a formal written request from the
Railways Ministry asking General Electric to provide this additional
information. It was not sent in the format prescribed by Clause 2.16.2. It was
not addressed to the appropriate officer designated in the RFQ as authorized to
receive the bids and all queries, clarifications etc. Mr. Ved Mani Tiwari was
not the designated officer authorized to receive bids, information or queries
under the RFQ. Clause 2.13.3 of the RFQ named Mr. Sudheer Kumar, Executive
Director, Electrical Engineering (Development), Ministry of Railways (Railway
Board) as the officer designated to receive the bid documents and all queries/
information. Contact details for Mr. Sudheer Kumar including his email contact
(edeed@rb.railnet.gov.in) were provided in Clause
2.13.3.
62.
Mr. Ramesh Mathur’s email dated May 20, 2011 sent to Mr Ved Mani Tiwari
violates Clause 2.20.1 and Clause 2.24 of the 2010 Madhepura RFQ. Mr Ramesh
Mathur’s email dated May 20, 2011 establishes that there was informal, corrupt
and off-the-record communication between Railway Ministry officials (including
Mr. Ved Mani Tiwari) and General Electric executives (Mr. Pratyush Kumar and
Mr. Ramesh Mathur). Such informal and off-the-record
communication also took place after May 17, 2010 pursuant to which Mr. Ramesh
Mathur (from General Electric) sent this email on May 20, 2010 to Mr Ved Mani
Tiwari. The information supplied by Mr. Ramesh Mathur in this email was taken
into account by the Railways Ministry in its decision to prequalify General
Electric for this tender. This email constitutes evidence of the corrupt and
cozy relationship between Mr. Ved Mani Tiwari (a Railway Ministry official
acting alone or under instructions from his superior officers) and Mr. Pratyush
Kumar and Mr. Ramesh Mathur from General Electric. Mr. Ved Mani Tiwari went out
of his way to help General Electric prequalify for the 2010 electric locomotive
tender. Mr Ved Mani Tiwari in collusion with the General Electric executives
involved (Mr Pratyush Kumar, Mr Ramesh Mathur and Mr Ashfaq Nainar) acted
corruptly and violated the conditions laid down in the RFQ. There will be
additional evidence on this corrupt interaction between Mr. Ved Mani Tiwari,
Mr. Pratyush Kumar and Mr. Ramesh Mathur. There will be evidence about how Mr.
Ved Mani Tiwari used and what he did with the excel document supplied on May
20, 2010 by Mr. Ramesh Mathur of General Electric.
63.
Clause 2.16.3 of the 2010 Madhepura RFQ states that any information
supplied subsequent to the application date shall be disregarded unless it was
expressly sought for by the Authority. The Indian Railways could not therefore
have relied upon the information and documentation provided by Mr. Ramesh
Mathur (General Electric) in his email dated May 20, 2010 to support its
decisions treat General Electric’s bid as responsive, and shortlist it for this
tender.
64.
As the decision of the Railway Ministry to treat General Electric’s bid for
the 2010 Madhepura as responsive and to shortlist it was based upon “wrongful”
consideration of the additional information supplied by General Electric after
the application due date, and because this information was supplied in
violation of the RFQ terms and as part of corrupt contact and collusion between
Railway Ministry officials and General Electric executives, this decision was bad
in law and was liable to be set aside/ quashed.
65.
Mr Ramesh Mathur’s email sent to Mr Ved Mani Tiwari’s gmail address also
amounts to an “undesirable practice” under Clause 4.3 (d) of the 2010 Madhepura
RFQ which reads:
““undesirable practice” means (i) establishing
contact with any person connected with or employed or engaged by the Authority
with the objective of canvassing, lobbying or in any manner influencing or
attempting to influence the Bidding Process; or (ii) having a Conflict of
Interest”.
66.
The legal consequences that would follow on account of Mr Ramesh Mathur’s
email dated May 20, 2010 to Mr Ved Mani Tiwari are:
i.
The additional information provided by General Electric to the Railway
Ministry on May 20, 2010 through Mr. Ramesh Mathur was liable to be
disregarded;
ii.
The decision to prequalify General Electric for the 2010 electric
locomotive tender was liable to be reversed/ set aside;
iii.
Mr. Ved Mani Tiwari (Railway Ministry), and Mr. Pratyush Kumar and Mr.
Ramesh Mathur (General Electric) are liable to be investigated for corruption
and punished in accordance with law;
iv.
General Electric Company and its two Indian subsidiaries (GE India Industrial
Private Limited and GE Global Sourcing India Private Limited) are liable to be blacklisted
for corrupt and undesirable practices in accordance with law and the 2010
Madhepura RFQ.
Issue of General Electric lobbying Railway
Ministry officials using McKinsey consultants
67.
The petitioner has
complained about illegal and prohibited lobbying of Railway Ministry officials
by General Electric with the help of McKinsey consultants. Paragraph 23 of Civil Writ Petition 1280 of
2012 reads:
“The Petitioner states that towards
the end of May 2010 and the first two weeks of June 2010, GE engaged a team of
McKinsey consultants who were working out of GE’s office in New Delhi Erie , United States
68.
The petitioner
reproduces below some emails that were exchanged between her and GE lawyers and
executives including Ms. Tara Plimpton (then General Counsel, GE
Transportation) in early June, 2010. (The email trail shows that Ms. Tara
Plimpton mistakenly sent her response to my Gmail address instead of the GE
email address I was using (seema.sapra@ge.com). Copies of these emails
dated June 1, June 2, June 3 and June 4, 2010 have also been filed with the
petitioner’s affidavit dated July 9, 2012.
“----------
Forwarded message ----------
From: Thomas, Peter G (GE Infra, Transportation) <peter.g.thomas@ge.com>
Date: Fri, Jun 4, 2010 at 6:35 PM
Subject: Re: NDA with McKinsey
To: "Plimpton, Tara (GE Transportation, US)" <tara.plimpton@ge.com>, "BeGole, Brett (GE Transportation)" <brett.begole@ge.com>
Cc: seema.sapra@googlemail.com
Tara...I haven't been involved in the india engagement. I thought that they were working directly with Flannery/Prat.
Brett...do you know?
--------------------------
Sent from my BlackBerry Wireless Handheld
----- Original Message -----
From: Plimpton, Tara (GE Transportation, US)
To: Thomas, Peter G (GE Transportation)
Cc: Seema Sapra <seema.sapra@googlemail.com>
Sent: Fri Jun 04 08:18:27 2010
Subject: FW: NDA with McKinsey
Peter, who owns the McKinsey relationship and do we have an NDA that covers this scope of work inIndia ?
Tara
-----Original Message-----
From: Sapra, Seema (GE Transportation, Non-GE)
Sent: Friday, June 04, 2010 5:00 AM
To: Winget, James, Legal (GE Transportation, US)
Cc: Plimpton, Tara (GE Transportation, US); Malhotra, Ashish (GE Transportation); Kumar, Prat (GE Transportation); Gerson, James (GE Transportation); Adlakha, Deepak (GE, Corporate)
Subject: FW: NDA with McKinsey
Jamie -
I discussed the NDA issue with Prat and Ashish.
Since McKinsey has been engaged by GE Transportation, the NDA should be between General Electric Company,U.S.
and McKinsey Global. We need your help in facilitating this.
The scope of work is covered in the attached workplan document and discussion document.
Thanks,
Seema
-----Original Message-----
From: Gerson, James (GE Transportation)
Sent: Thursday, June 03, 2010 1:16 AM
To: Sapra, Seema (GE Transportation, Non-GE); Kumar, Prat (GE Transportation)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation); Winget, James, Legal (GE Transportation, US); Parisi, Robert D (GE Transportation)
Subject: RE: NDA with McKinsey
Seema
Thank you for the response.
Jim
-----Original Message-----
From: Sapra, Seema (GE Transportation, Non-GE)
Sent: Wednesday, June 02, 2010 8:59 AM
To: Gerson, James (GE Transportation); Kumar, Prat (GE Transportation)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation); Winget, James, Legal (GE Transportation, US); Parisi, Robert D (GE Transportation)
Subject: RE: NDA with McKinsey
Jim,
I'll discuss this with Prat and get this closed.
Thanks,
Seema
-----Original Message-----
From: Gerson, James (GE Transportation)
Sent: Wednesday, June 02, 2010 3:42 PM
To: Kumar, Prat (GE Transportation); Sapra, Seema (GE Transportation, Non-GE)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation); Winget, James, Legal (GE Transportation, US); Parisi, Robert D (GE Transportation)
Subject: NDA with McKinsey
I think we should proceed with an NDA with McK based on the sensitivity of information that is being disclosed or may need to be disclosed.
Can Seema help on this? Is there a reason why we have not initiated this?
Thanks,
Jim
-----Original Message-----
From: Kumar, Prat (GE Transportation)
Sent: Tuesday, June 01, 2010 8:11 PM
To: Gerson, James (GE Transportation)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation)
Subject:
Jim, please do NOT share full D-loco model with McKinsey - we can share pieces of data for comparing costs with E-loco. While we do have NDA with them, I am very nervous sharing the full bid-model. Prat”
From: Thomas, Peter G (GE Infra, Transportation) <peter.g.thomas@ge.com>
Date: Fri, Jun 4, 2010 at 6:35 PM
Subject: Re: NDA with McKinsey
To: "Plimpton, Tara (GE Transportation, US)" <tara.plimpton@ge.com>, "BeGole, Brett (GE Transportation)" <brett.begole@ge.com>
Cc: seema.sapra@googlemail.com
Tara...I haven't been involved in the india engagement. I thought that they were working directly with Flannery/Prat.
Brett...do you know?
--------------------------
Sent from my BlackBerry Wireless Handheld
----- Original Message -----
From: Plimpton, Tara (GE Transportation, US)
To: Thomas, Peter G (GE Transportation)
Cc: Seema Sapra <seema.sapra@googlemail.com>
Sent: Fri Jun 04 08:18:27 2010
Subject: FW: NDA with McKinsey
Peter, who owns the McKinsey relationship and do we have an NDA that covers this scope of work in
Tara
-----Original Message-----
From: Sapra, Seema (GE Transportation, Non-GE)
Sent: Friday, June 04, 2010 5:00 AM
To: Winget, James, Legal (GE Transportation, US)
Cc: Plimpton, Tara (GE Transportation, US); Malhotra, Ashish (GE Transportation); Kumar, Prat (GE Transportation); Gerson, James (GE Transportation); Adlakha, Deepak (GE, Corporate)
Subject: FW: NDA with McKinsey
Jamie -
I discussed the NDA issue with Prat and Ashish.
Since McKinsey has been engaged by GE Transportation, the NDA should be between General Electric Company,
The scope of work is covered in the attached workplan document and discussion document.
Thanks,
Seema
-----Original Message-----
From: Gerson, James (GE Transportation)
Sent: Thursday, June 03, 2010 1:16 AM
To: Sapra, Seema (GE Transportation, Non-GE); Kumar, Prat (GE Transportation)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation); Winget, James, Legal (GE Transportation, US); Parisi, Robert D (GE Transportation)
Subject: RE: NDA with McKinsey
Seema
Thank you for the response.
Jim
-----Original Message-----
From: Sapra, Seema (GE Transportation, Non-GE)
Sent: Wednesday, June 02, 2010 8:59 AM
To: Gerson, James (GE Transportation); Kumar, Prat (GE Transportation)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation); Winget, James, Legal (GE Transportation, US); Parisi, Robert D (GE Transportation)
Subject: RE: NDA with McKinsey
Jim,
I'll discuss this with Prat and get this closed.
Thanks,
Seema
-----Original Message-----
From: Gerson, James (GE Transportation)
Sent: Wednesday, June 02, 2010 3:42 PM
To: Kumar, Prat (GE Transportation); Sapra, Seema (GE Transportation, Non-GE)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation); Winget, James, Legal (GE Transportation, US); Parisi, Robert D (GE Transportation)
Subject: NDA with McKinsey
I think we should proceed with an NDA with McK based on the sensitivity of information that is being disclosed or may need to be disclosed.
Can Seema help on this? Is there a reason why we have not initiated this?
Thanks,
Jim
-----Original Message-----
From: Kumar, Prat (GE Transportation)
Sent: Tuesday, June 01, 2010 8:11 PM
To: Gerson, James (GE Transportation)
Cc: Negi, Gaurav (Corporate); BeGole, Brett (GE Transportation)
Subject:
Jim, please do NOT share full D-loco model with McKinsey - we can share pieces of data for comparing costs with E-loco. While we do have NDA with them, I am very nervous sharing the full bid-model. Prat”
69.
The background is that
soon after May 17, 2010, General Electric executives including Mr. John
Flannery, Mr. Pratyush Kumar, Mr. Deepak Adlakha and Mr. Brett BeGole visited Bangalore for a live video
conference with Mr. Jefrrey Immelt. A decision was taken by General Electric
executives during the meetings at Bangalore
to engage McKinsey consultants. A few days later at the end of May 2010, a
McKinsey team arrived at the General Electric AIFACS office and were allotted a
conference room to work in. The
engagement manager for this assignment was a McKinsey consultant called Mr.
Anupam Agarwal. The petitioner was told (by Mr. Gaurav Negi from General
Electric) that this team was studying the electric locomotive factory
opportunity. The McKinsey team worked in
General Electric’s office for about 10-15 days. During this period, this team interacted
closely with Mr. Pratyush Kumar, Mr, Ramesh Mathur and Mr. Gaurav Negi. The
petitioner was not formally involved in or informed about what McKinsey was
doing. The petitioner clearly recalls
some members of the McKinsey team accompanying Mr. Pratyush Kumar and Mr.
Ramesh Mathur to the office of the Indian Railways for meetings.
70.
Towards the end of the
McKinsey assignment, Mr. Pratyush Kumar asked the petitioner on June 8, 2010 to
prepare a timeline for events/ tasks to be completed in the Electric locomotive
factory RFP. He told her to use the 2008 RFP. The timeline showed certain
inconsistencies/ unachievable deadlines. For example the factory would not have
been ready in time to meet the first delivery deadlines. Mr. Pratyush Kumar
wanted this timeline urgently for meetings with Indian Railways officials. Soon
after these meetings between General Electric, Railway Ministry officials and
McKinsey consultants, the railway ministry issued the RFPs for the Dankuni
Project and the Madhepura project.
71.
Around early June
2010, the petitioner was asked to prepare a non-disclosure agreement between
General Electric and McKinsey for the electric locomotive opportunity
assignment. The scope for the McKinsey assignment was eventually provided to
the petitioner by Mr. Gaurav Negi who told the petitioner to include meetings
between McKinsey and Railway Ministry officials in the scope of McKinsey’s work
protected from disclosure. The draft NDA that the petitioner prepared had an
attachment which set out the scope of information that was protected under the
NDA. This attachment also mentioned meetings and discussions between the
McKinsey team and Railway Ministry officials. This draft NDA was sent out by
the petitioner to the McKinsey lawyer for Asia based either in Hong Kong or Singapore .
It was also sent by her to various General Electric executives and to Ms Tara
Plimpton, Mr Deepak Adlakha, Mr James Winget and to Mr Mrigank Sharma (all
General Electric in-house counsel).
Issue of General
Electric having been shortlisted for ELF despite not manufacturing electric
locomotives and despite admittedly not possessing required experience or technology.
72.
The petitioner has
produced in CWP 1280 of 2012, two McKinsey documents titled “18052010 Assessing
Loco Opportunity v4.ppt” dated May 18, 2010 and “20100522_Working
session_V04.ppt” dated May 22, 2010.
These documents are of interest because they also establish that General
Electric does not manufacture electric locomotives and does not possess the
technology to manufacture electric locomotives. Slide 3 of the document dated
May 22, 2010 titled “20100522_Working session_V04.ppt” lists ‘Key engineering
issues identified during initial round of discussions’ between GE and McKinsey.
These were listed as:
“Can we hire 100 engineers, including 20-30 domain experts, in 3 months
time (plus 4 months before LoA for preparations, e.g., CV short-listing)?
Is BHEL’s
limited expertise in Liquid cooled IGBT sufficient?
What risk will be posed
by the lack of expertise in reliability, vehicle dynamics, system engineering
and high voltage circuitry
What risk
will be posed by the lack of expertise in E-loco bogey
Can the
factory be commissioned in 18-21 months?
What will be
the loading cost of higher failure rate (2.04 per fly Vs 1.5)?”
73.
The above questions raised by General Electric and recorded in McKinsey
documents show that General Electric was and is not qualified to set up an
electric locomotive factory because it does not manufacture electric
locomotives and does not possess the technology, expertise and experience to do
so.
Issue of forged/ tampered Kazakhstan
74. General Electric Company, GE
India Industrial Private Limited, GE Global Sourcing India Private Limited and
any other associate General Electric Company are all liable to be blacklisted
for all Railway tenders for a period of two or more years also for submitting a
tampered customer certificate with the technical bid submitted by Respondent 7
for the DLF Project on 12 July 2010. Respondent
7 was subsequently shortlisted by respondent 4 for this tender on the basis of
this unauthentic document. The submission of a
forged/ tampered customer certificate would amount to fraudulent conduct under
the Diesel Locomotive Tender RFQ and would render Respondent 7 liable to
disqualification and black-listing. It would also amount to the criminal
offence of forgery under both Indian and US law. The tampered customer
certificate was submitted as part of the requirements for technical
prequalification. Besides constituting a criminal offence under the Indian
Penal Code, submission of a forged certificate amounts to a material
misrepresentation under clause 2.7.3 of the 2010 Marhowra RFQ rendering General
Electric liable to be disqualified and blacklisted. This also amounts to a
fraudulent practice under clause 4.1.3 (b) of the 2010 Marhowra RFQ that
defines a fraudulent practice as a “misrepresentation or omission of facts or
suppression of facts or disclosure of incomplete facts, in order to influence
the bidding process”. Clause 4.1.1 of the 2010 Marhowra RFQ mandates that the
Authority (Respondent 4) “shall reject” an Application if it determines that an
Applicant has engaged in a fraudulent practice. Further under Clause 4.1.2 of
the 2010 Marhowra RFQ, an Applicant found to have engaged in a fraudulent
practice shall not be eligible to participate in any tender or RFQ or a further
period of two years.”
75. On this issue of the forged
customer certificate, the petitioner refers to and relies upon the rejoinder
affidavits filed by her in this matter on July 9, 2012 and on July 23, 2012 and
upon other documents filed in this matter, and in particular on the
correspondence between the petitioner and General Electric exchanged during and
after General Electric purported internal investigation.
76. The petitioner has also filed a
detailed 55 page affidavit exclusively addressing the evidence in connection
with her complaint of forgery on October 11, 2012 and she will refer to that
affidavit at the time of arguments on this application. This affidavit
describes in detail the events of July 8, 9, and 10, 2010, the weekend before
July 12, 2010 when the technical bid was submitted by General Electric for the
Marhowra tender.
77. The petitioner worked for
General Electric as Legal Counsel during May, June, July, August and September
2010, and was involved in the preparation of General Electric’s RFQ application
dated July 12, 2010 which included the tampered document. Therefore the petitioner’s
evidence is based upon her personal knowledge of the facts. General Electric
had a customer certificate that Kazakhstan Railway had issued to General
Electric around December 2009/ January 2010. General Electric needed to submit
this document in original to the Railway Ministry along with General Electric’s
technical bid for the 2010 Marhowra tender in order to satisfy the RFQ
technical capacity eligibility criteria (in particular the requirement that the
prior locomotive sales should have had at least two variants which the RFQ
defined as gauge variations or service application variations). This customer
certificate from Kazakhstan Railway was undated and therefore non-compliant
with the format for customer certificates prescribed in the RFQ. This fact that
the certificate was non-compliant was pointed out by the petitioner to
colleagues at General Electric at the end of June 2010 (the RFQ application was
due on July 12, 2010).
78. Unknown to the petitioner,
sometime between the end of June 2010 and July 9, 2010, General Electric
executives/ employees (including Pratyush Kumar, Ashfaq Nainar, Gaurav Negi.
Ramesh Mathur,Ashish Malhotra and Praveena Yagnambhat) entered into a criminal
conspiracy to add a false date to the undated customer certificate and to
submit this altered and therefore forged document along with General Electric’s
RFQ application to the Railway Ministry on July 12, 2010. The petitioner states
that this conspiracy was carried out and the document that was submitted by
General Electric to the Railway Ministry on July 12, 2010 as part of General
Electric’s RFQ for the 2010 Marhowra tender as the customer certificate issued
by Kazakhstan Railway was a tampered and forged document. The document
submitted was the original copy of the Kazakhstan Railway certificate that
General Electric obtained in December 2009/ January 2010. This document was
altered and a false date (July 7, 2010) was added to this undated document by
the hand of one of the General Electric executives involved in the criminal
conspiracy. This altered and forged document was then submitted to the Indian
Railway on July 12, 2010 with General Electric’s RFQ application.
79. As part of this conspiracy, an
elaborate and detailed fraud was perpetrated by these General Electric executives
(with other unknown co-conspirators) whereby a record was created on internal
General Electric emails that these executives had obtained a fresh customer
certificate from Kazakhstan Railway which was compliant (dated), and that a
scanned copy of this new certificate would be submitted by General Electric,
and that the Railway Ministry had approved the submission of a scanned copy
instead of the original document.
80.
In reality, the afore-mentioned General Electric executives altered the old
Kazakhstan Railway certificate (which did not have a date) and added a false
date (July 7, 2010) to that document. This tampered/ forged document was then
slipped into General Electric’s RFQ application just before it was sent for
binding. No one else in General Electric, except those involved in this
conspiracy, would ever have known which document was eventually submitted by
General Electric. Also, the Railway Ministry would have accepted the altered /
forged document as an original certificate and would never have raised any
questions. It is also possible that the
General Electric executives involved in the conspiracy intended to claim that
the new original document from Kazakhstan Railways (which had been purportedly
couriered) had been delivered sometime during the weekend of 10 and 11 July
2010 and that this document had been substituted in place of the scanned copy.
As a result, even the internal General Electric record would have shown that
General Electric had submitted a original copy of a compliant certificate.
81.
This conspiracy was foiled as a result of the petitioner recording on email
on the morning of July 10, 2010 that the General Electric team consider
including both documents in its RFQ application, i.e., the alleged scanned copy
of the fresh certificate and the undated original document. As the undated
original document had already been tampered, it was no longer possible for the
General Electric executives (involved in the forgery) to include it. The plan
was also foiled because the petitioner looked through the bound RFQ application
on July 10, 2010 and saw that this compilation included an “original
certificate” from Kazakhstan Railway that bore the date July 7, 2010. As a
result of the petitioner having seen evidence of the forgery, she was drugged
during the weekend of July 10 and 11, 2010 by/ at the behest of these General
Electric executives. She was also bullied, harassed and an attempt made to get
her to participate in an unlawful act (as described in the affidavit dated
October 11, 2012 filed on the forgery issue) which could then be used to
blackmail the petitioner. After July 12, 2010, the petitioner was again
drugged/ poisoned while these General Electric executives participated in a
further conspiracy to eliminate the petitioner and to remove her by having her
contract with General Electric terminated. The petitioner was finally able to
report this forgery only on October 1, 2010 to the General Counsel for General
Electric Co. (Respondent No. 1) after her contract with General Electric had
been terminated in violation of whistleblower non-retaliation laws and
policies. Since then, the petitioner has been subjected to further poisoning
and drugging and her complaint of this forgery has been covered up by General
Electric. The petitioner’s life remains in grave danger.
82.
The petitioner states that she was drugged
at the behest of General Electric executives involved in the forgery and was
drugged/ poisoned on General Electric premises with the help of the pantry
assistant. The petitioner points out that after July 12, 2010 the manner in
which cut fruit was served to the petitioner in the General Electric office
changed. The manner in which drinking water was supplied in the General
Electric office also changed. After July 12, 2010 the petitioner was being
supplied with unsealed bottles of mineral water by the pantry assistant and she
was told that these bottles were being refilled. The petitioner recalls that Mr
Pratyush Kumar and Mr Ashfaq Nainar stopped drinking water and were only
consuming canned coke in the General Electric office. The opportunity to have
the petitioner drugged at her residence was also available as the petitioner
lived alone and had a cook come in to prepare meals. The petitioner was also
invited out by Ms Himali Arora (the then CFO at GE Transportation India) for
meals/ drinks on at least two occasions. On another occasion, the petitioner
went out for drinks and a meal with other colleagues at the initiative of Mr
Manish Batra from General Electric. In August 2010, the petitioner was suddenly
invited for dinner by three former “friends” on three separate occasions. Two
of these dinners were in public restaurants (the Set’z at the Emporio Mall and
at 360 degrees at the Oberoi hotel). All three of these former ‘friends’ have subsequently
been revealed as having targeted the petitioner on account of her corruption
complaints in this petition. All three of these “former” friends have also been
suitably rewarded by sudden material gains obtained at the behest of General
Electric. These dinners were further opportunities to drug the petitioner.
During the period from July 12, 2010 until she left General Electric in
September 2010, the petitioner was not her usual self. She was under severe
stress, was not sleeping well, was eating badly, was coming in to work late and
became physically bloated and was obviously retaining salt and water. The
petitioner was not functioning normally and was finding it difficult to manage
even basic chores at home. In addition the work environment in the General
Electric office turned abusive and hostile. At the same time, a lot of work was
thrown at the petitioner with unrealistic deadlines and with unreasonable and
hostile demands.
83.
After July 12, 2010, a
conspiracy was put into effect to create a hostile work environment for the
petitioner. She was set up for failure on tasks she was allocated. She was not
involved in meetings that she was supposed to be involved in. The petitioner
was ready to resign and leave this employment even in the week of July 12, 2010
but was prevented from doing this by Deepak Adlakha. Pratyush Kumar, Ashfaq
Nainar, Deepak Adlakha and other General Electric executives involved in the
forgery hatched and put into effect a plan to have the petitioner’s employment
contract terminated for some adverse reason while simultaneously having the
petitioner drugged and poisoned. The petitioner states that even though she was
ready to leave the job, she was prevented from doing that while steps were
taken to prepare for a termination of her contract under circumstances that
could then be used to blackmail her into keeping silent on the forgery. At this
time the petitioner was also drugged and perhaps poisoned as well, and the plan
could have also involved her murder passed off as a natural death from
ill-health or some other manufactured cause.
84.
General Electric employees tampered with the Kazakhstan India
85.
General Electric through Mr Alexander Dimitrief’s letter dated February
3, 2011, claims that documentary evidence disproves the petitioner’s complaint
about the forgery. This is incorrect. The documentary evidence discussed in
Alexander Dimitrief’s letter is irrelevant. He states: “We have compared the
printout of the certificate from the July 7 e-mail with GETI’s copy of the
Request for Qualification (“RFQ”) submitted to Indian Railways and they are
identical”.
86.
The petitioner submits that this does not establish that the certificate
was not forged. Why would General Electric executives retain evidence of the
forgery and of the tampered document on General Electric files? A close reading
of Alexander Dimitrief’s letter will establish that it does not provide any
evidence to establish that the petitioner’s complaint of forgery is without
basis. The letter misrepresents and ignores the petitioner’s written evidence
and attempts to falsely suggest that the petitioner withdrew her complaint,
whereas the petitioner did not.
87.
A relevant question is did Kazakhstan Railway actually issue a fresh
customer certificate on July 7, 2010? Was the July 7, 2010 email genuine or
fake? Even if this new certificate was indeed issued by Kazakhstan Railways, the
document that General Electric eventually submitted to the Railway Ministry on
July 12, 2010 was not a scanned copy of the fresh customer certificate dated
July 7, 2010. General Electric executives submitted the original undated
Kazakhstan Railway customer certificate after adding a false date to it. This
is the document the petitioner saw in the bound RFQ application on July 10 and
11, 2010. The evidence that the
petitioner has shared in writing clearly shows the following:
i.
The document the petitioner saw in the RFQ compilation on the evening of
9 July 2010 contained a black and white copy of the Kazakhstan
ii.
The bound set that the petitioner saw on 10 July 2010 contained an
entirely different document (Kazakhstan
iii.
Ashish Malhotra (from General Electric) lied to the petitioner and told
her that the coloured document had been
present in the set the petitioner looked through on 9 July 2010. This is
incorrect. The document the petitioner saw on 9 July 2010 was a black and white
document that on the face of it looked like a copy.
88.
The only relevant evidence of the forgery is the document on the files
of the Railway Ministry, i.e., the document General Electric actually
submitted. The petitioner submits that a perusal of this document by this court
will establish that the document General Electric submitted was the original
undated Kazakhstan Railway customer certificate with a false date. Any reasonable person wanting to investigate this forgery
would look to the relevant documentary evidence available with the Government.
Why does General Electric not want that evidence examined? The petitioner has described the events of 10 and 11
July 2010 in great detail in writing. There is hard evidence of the events of
10 and 11 July 1010 that have been
described by the petitioner. In addition, the petitioner has also detailed the
conspiracy to cover up this forgery that was put into effect afterwards.
89.
The petitioner submits
that this Hon’ble Court
should ask General Electric to produce all its internal records on the forgery
issue including the several emails mentioned in the petitioner’s affidavit
dated October 11, 2012.
90.
It is also submitted
that the counter affidavit filed by the Railway Ministry/ Railway Board on CWP
1280 of 2012 and the railway affidavit dated 14 January 2-013 establish that the
complaint of forgery was not investigated either by the Railway Ministry or by
the Central Vigilance Commission. Instead the attempt has been to cover up this
matter and avoid an investigation into and a clear answer to the complaint of
forgery. The Railway Ministry has made a false statement that the Kazakhstan
Railway customer certificate submitted by General Electric was not necessary to
prequalify/ shortlist General Electric. This position is legally incorrect.
General Electric does not satisfy the technical capacity prequalification
conditions prescribed in the 2010 Marhowra tender RFQ in the absence of the
Kazakhstan Railway customer certificate.
91.
Respondent 4 has not
investigated whether or not the customer certificate from Kazakhstan Railways
submitted by Respondent 7 (GE Global Sourcing India Private Limited) with its
RFQ on July 12, 2010 was forged/ tampered.
92.
Respondent No. 4 has
not investigated the petitioner’s complaint that General Electric submitted a
forged document by submitting a customer certificate issued by Kazakhstan
Railways that had been tampered with by General Electric executives. The
certificate issued by Kazakhstan Railways did not have a date. General Electric
executives added a false date to this document and submitted the tampered
document. This constitutes forgery of a government document. The Ministry of
Railways cannot ignore the petitioner’s complaint that this was a forged
document. And further the Ministry of Railways cannot ignore this forged
document and the criminal offence of forgery by ‘falsely’ stating that General
Electric did not need to rely upon this document to prequalify or that General
Electric has not derived any advantage by submitting this document.
93.
Submission of a
forged/ tampered/ unauthentic document with a bid for a government tender, not
only constitutes the criminal offence of forgery but also renders the Bidder
liable to be disqualified and blacklisted. Submission of a forged document with
the bid would amount to a fraudulent practice under Clause 4.1.3 b) of the 2010
Marhowra RFQ and this would render General Electric liable to be blacklisted
under Clauses 4.1.1 and 4.1.2 of the RFQ.
94.
By submitting a forged
document, General Electric has also violated paragraph 1 of the Letter
comprising the Application for Qualification submitted by General Electric on
July 12, 2012. This paragraph reads:
“All
information provided in the Application and in the Annexures is true and
correct and all documents accompanying such Application are true copies of their
respective originals.”
95.
Further by submitting a forged document, General Electric has also
violated Clause 2.7.2 of the Marhowra 2010 RFQ in that General Electric has
made a material misrepresentation and improper response in its application
submitted on July 12, 2010. Clause 2.7.3 of the 2010 Marhowra RFQ provides:
“In case it is found during the
evaluation or at any time before signing of the Agreement(s) or after its
execution and during the period of subsistence thereof, including the thereby
granted by the Authority, that one or more of the prequalification conditions
have not been met by the Applicant or the Applicant has made material
misrepresentation or has given any materially incorrect or false information,
the Applicant shall be disqualified forthwith if not yet appointed as the
Successful Bidder either by issue of the LOA or entering into of the Agreement,
and if the Applicant has already been issued the LOA or has entered into the
Agreement, as the case may be, the same shall, notwithstanding anything to the
contrary contained therein or in this RFQ, be liable to be terminated, by a
communication in writing by the Authority to the Applicant, without the
Authority being liable in any manner whatsoever to the Applicant.”
96.
The statements made by
Respondent 4 in paragraph 3 of the affidavit under reply are significant in two
ways. First, Respondent 4 does not confirm or deny whether General Electric
submitted a forged document. Respondent 4 does not state that any
investigation/ enquiry was held on the complaint as to whether General Electric
submitted a forged document. Respondent 4 also does not confirm that the
document in question was not a forged document. Respondent 4 has failed to
investigate the complaint of the petitioner which was referred to it by the
CVC.
97.
The Respondent 4 in paragraph 3 of its counter affidavit states that its
“investigation” found that General Electric did not need the Kazakhstan customer certificate to
fulfil the technical capacity criteria under clause 3.2 of the 2010 Marhowra
RFQ. This seems to be the full extent of the investigation undertaken by
respondent 4. According to the affidavit filed by Respondent 4, all that it did
was to reach the “conclusion” that General Electric did not need the Kazakhstan
customer certificate to prequalify. Respondent 4 did not make any further
inquiry. It did not inquire into the authenticity of the Kazakhstan Railways
customer certificate submitted by General Electric on July 12, 2010. According
to the affidavit filed by Respondent 4, the Railways Ministry, it recommended
to the CVC that the complaint (no. 107/11/1)
be closed on the sole basis that General Electric did not need this certificate
to prequalify and that General Electric did not derive any advantage from
submitting this certificate. This finding and reasoning is the sole basis for
the Railways Ministry recommendation to the CVC that the complaint be closed
and this false and specious reasoning and finding was blindly accepted by the
CVC and it appears that the complaint was closed without investigation into the
complaint of forgery.
98.
Respondent no. 4 and
the CVC have both failed to investigate the complaint of the petitioner that GE
Global Sourcing India Private Limited submitted a tampered document (customer
certificate issued by Kazakhstan Railways) with its RFQ application on July 12,
2010 for the diesel locomotive factory tender. This constitutes a forgery under
the Indian Penal Code.
99.
Respondent 4’s
statement and finding that General Electric did not need the Kazakhstan
Railways customer certificate to fulfil the technical capacity criteria under
clause 3.2 of the 2010 Marhowra RFQ is patently false and a deliberate
misrepresentation of facts and the RFQ requirements and is intended to mislead
this court and to cover-up the forgery committed by General Electric
executives. Not only has respondent 4 failed to investigate the complaint of
forgery, but respondent 4 also attempts to mislead this court by stating that
General Electric did not need the Kazakhstan customer certificate because (according to respondent 4 in
the counter affidavit filed) General Electric had provided details of 2326
mainline diesel electric locomotives (supplied over the last ten years) whereas
the requirement in the RFQ technical criteria was only for 1000 locomotives.
Respondent 4 goes on to state that for this reason General Electric did not
derive “any advantage by submitting the scanned copy”.
100.
The Railways Ministry
is misleading this court by suggesting that General Electric did not need to
rely upon the Kazakhstan Railways to meet the technical prequalification
criteria.
101.
Clause 3.2.1 of the
2010 Marhowra RFQ reads:
“Subject to the provisions of Clause 2.2, the Applicant shall:
a) over the period of last ten
(10) years, have manufactured and supplied at least 1000 Mainline Diesel
Electric Locomotives and:
i. such Locomotives should
comprise at least 2 Variants; a Variant for the purpose of this RFQ Document
shall mean a Locomotive with different gauge or with different service application;
ii. the supply of such
Locomotives should have been to three (3) or more countries;
iii. 200 or more of such Diesel
Electric Locomotives should be of 4000 HP (or higher) with AC-AC 3-phase and
IGBT technology; iv. 25 or more of such Diesel Electric Locomotives should be
of 6000 HP (or higher)”
102.
In the affidavit under
reply, Respondent 4 falsely suggests that the only technical criteria required
for prequalification was evidence that a bidder had manufactured and supplied
1000 mainline Diesel Electric locomotives. As is clear from Clause 3.2.1
(reproduced above), a bidder also needed to provide customer certificates to
show that it met the other conditions/ criteria prescribed in Clause 3.2.1. The
1000 locomotives relied upon by a bidder needed to have at least two variants.
These locomotives should have been supplied to at least three countries. 200 of
these locomotives should have been of at least 4000 HP with AC-AC 3-phase and
IGBT technology. And at least 25 of these locomotives should have been of at
least 6000 HP.
103.
While General Electric
did not need the Kazakhstan Railways customer certificate to certify the
requirement for prior manufacture and supply of 1000 locomotives, it did need
this certificate to meet the requirement that these locomotives should comprise
of two variants (i.e., locomotives with either gauge variations or service
application variations). General Electric does not meet the requirement for two
variants prescribed by Clause 3.2.1 without the Kazakhstan Railways customer certificate.
This was also the internal understanding in General Electric and is recorded on
internal General Electric emails.
104.
The petitioner relies
upon her email dated July 10, 2010 that was sent while the petitioner was
working for GE to Mr Pratyush Kumar, Mr Ashish Malhotra, Ramesh Mathur, Steve
Seip, James Winget, Ashfaq Nainar, Mr Deepak Adlakha and Ms Tara Plimpton (all
GE executives/ lawyers). A copy of this email is attached as annexure P-1 to
the petitioner’s affidavit dated October 11, 2012 filed on the issue of the
forgery and is also annexed to the writ petition. An extract from this email is
reproduced below.
“Prat,
Just wanted to capture the latest position as of yesterday
evening with respect to customer certs.
For gauge variations, the following have been included in
the set sent for binding:
Original from Indonesia has been received and has
been included. – has a gauge variation plus mixed use (passenger/ freight) –
locomotives of 2000 HP capacity
A scanned email copy of the new Kazakhstan cert (with date)
included as hard copy still not received – original in transit – gauge
variation
The undated Kazakhstan
cert (hard copy available) not included.
A scanned email copy of the Vale cert included as hard copy
not received. – We will need the hard copy in case railways asks for it later.
– gauge variation plus helpful for 6000 HP numbers.
As already indicated to the
team,
1. The RFQ language (2.12.2) requires original
certs
2. Variant requirement of at least 2 variants – If we are
using gauge variations, I interpret the RFQ as requiring at least 3 different
gauges. No gauge variation is a zero variant, one different gauge is one
variant and 2 different gauges are 2 variants. In D loco last time with the
same language we had 3 gauge variations.
…”
105.
As the above email
records, General Electric needed the Kazakhstan Railways customer certificate
to meet the variant requirement. The Petitioner submits that even with the
Kazakhstan Railways certificate being considered, General Electric still doid
not satisfy the ‘variant’ requirement specified in Clause 3.2.1 of the 2010
Marhowra RFQ.
106.
The Indonesian
customer certificate submitted by General Electric was obtained at the last
minute as recorded in the email above. The petitioner was informed by Mr Ashfaq
Nainar (a General Electric executive) that this was not useful as it was for
locomotives of 2000 HP capacity and therefore not for the kind of locomotives
(mainline Electric Diesel locomotives) that the Railways was interested in purchasing.
Mr Ashfaq Nainar told the petitioner that this certificate would not be
acceptable to the Indian Railways to meet the variant requirements.
107.
From the above, it is
clear that General Electric did not meet the variant requirement without
reliance upon the forged Kazakhstan Railways certificate.
108.
The customer
certificate from Vale (a Brazilian firm) that General Electric submitted with
its RFQ application for the Marhowra Project on July 12, 2010 was also not the
original document but was a scanned copy received by General Electric several
months before July 12, 2010. Since receipt of this scanned copy by General
Electric, Vale had refused to provide the original or a fresh certificate to
General Electric because of a subsequent dispute connected to the supplies. This
customer certificate therefore was also no longer valid having been disowned by
the issuer.
109.
It is submitted that
the Railways Ministry admitted in its counter affidavit that scanned copies of
customer certificates could not be considered by the Authority under the 2010
Marhowra RFQ which required that customer certificates to meet the technical
capacity criteria be submitted in original.
110.
Clause 2.2.3 i. of the 2010 Marhowra RFQ clearly provided that the
original customer certificates were required to be submitted with the RFQ
application. This clause reads:
“The
Applicants shall enclose with its application, to be submitted as per the
format at Appendix-I, complete with its Annexes, the following:
i.
certificate(s) from its statutory auditors or the concerned customer(s) stating
the number of Mainline Diesel Electric Locomotives designed, manufactured and
supplied, during the past 5 years as specified in paragraph 2.2.2(A) above. In
case a particular job/contract has been jointly executed by the Applicant (as
part of a consortium), he should further support his claim for the share in
work done for that particular job/ contract by producing a certificate from its
statutory auditor or the concerned customer(s);”
111.
The Railways Ministry could
not have prequalified General Electric without reliance upon the Kazakhstan
customer certificate. General Electric did derive an advantage by submitting
the Kazakhstan
certificate as it did not meet the variant requirement without this
certificate.
112.
It is submitted that
because General Electric did not submit an un-tampered, true and original copy
of the Kazakhstan Railways customer certificate, it could not have been
prequalified for the 2010 diesel locomotive tender. General Electric did not
submit original document for the customer certificate issued by Vale, a
Brazilian corporation.. Without these two certificates, General Electric did
not meet the RFQ requirement that the 1000 locomotives include at least two
variants and also include at least 25 6000HP locomotives. General Electric’s
RFQ application for the Marhowra locomotive factory Project submitted on July
12, 2010 was therefore non-responsive and non-compliant and General Electric was
liable to be disqualified by the Railway Ministry.
113.
The officers in the
Railways Ministry and in the Central Vigilance Commission who have attempted a
cover-up of the forged Kazakhstan Railways customer certificate submitted by
General Electric with its technical bid on July 12, 2010 and have attempted to
mislead this court should be investigated and punished in accordance with law.
The Central Vigilance Commission has clearly colluded in the aforesaid attempt
to cover-up the forgery committed by General Electric executives and the
submission of a forged document (Kazakhstan Railways customer certificate) by
Respondent 7 (GE Global Sourcing India Private Limited). Both the Central
Vigilance Commission and the Railways Ministry are attempting to mislead this
court. These actions by officers of the Railways Ministry and the CVC cannot be
said to be acts done in good faith.
114.
The only document
produced by Respondent 4 in connection with its alleged investigation of the
Petitioner’s email complaint dated January 11, 2011 is a copy of a note by Mr R
C Arora, a Director in the Central Vigilance Commission advising closure of the
case (on page 14 of the affidavit under reply). No reasons for this
recommendation are given in the note. This note does not even mention the
nature of the complaint, the nature and terms of reference of the
investigation, the findings of the investigation, or the reasons for closing
the complaint. The petitioner submits that the fact that respondent 4 has
produced this “note” which communicates absolutely no detail about the alleged
purported investigation is itself a red flag that respondent 4 and the CVC are
attempting to hoodwink the court.
115.
This note reads:
Central Vigilance Commission
The Commission has perused the investigation report and the
comments of the administrative authorities thereon. In agreement with the
RB(Vigilance), the Commission would advise closure of the complaint case.
2. Railway Board’s ID No.2011/VC/RB/10-CVC dated 12.08.2011
refers and its file is sent herewith.
(R.C.
Arora)
Director
116.
Respondent 4 has not
produced a copy of the investigation report (with the comments of
administrative authorities thereon) referred to in the above note. As stated
above, in its counter affidavit the Railways Ministry has attempted to mislead
this court by misrepresenting the petitioner’s complaint about the Kazakhstan
Railways certificate tampering/ forgery. Respondent 4 is attempting to cover up and misrepresent the petitioner’s
complaint that the Kazakhstan Railways customer certificate submitted by General
Electric with its technical bid on July 12, 2010 was a forged/ tampered
document. The omission by the Railways Ministry to produce the original
investigation report before this court provides confirmation that the Railways
Ministry and the CVC are covering up the forgery committed by General Electric
executives.
117.
The petitioner submits
that this court should direct the Railways Ministry and the CVC to produce (i)
the terms of reference for the investigation it undertook; (ii) the
investigation report; (iii) the names of the officers who carried out this
alleged investigation; and (iv) the comments of the administrative authorities
referred to in the note by Mr R C Arora, a Director in the Central Vigilance
Commission.
118.
The new
document(described as brief of the investigation conducted) produced at page
397 of the affidavit filed by the Railway Ministry on 14 January 2013 (page
4888 of the court file in volume 13) confirms that neither the CVC nor the
respondent have investigated the complaint that the customer certificate for
Kazakhstan Railway submitted by respondent 7 with its technical bid on 12 July
2010 is a tampered and forged document.
119.
In its counter
affidavit dated July 3, 2012 filed in CWP 1280 of 2012 (this affidavit has been
filed without a vakalatnama on record and has been signed and verified by one
Mr K R Radhakrishnan who does not have the authority to represent respondents
1, 6 and 7), General Electric’s response on the complaint of forgery is limited
to a single statement- “ … the Answering Respondents deny that any tampered /
forged / unauthenticated / undated documents were submitted by GE Sourcing,
including the certificate issued by Kazakhstan Railways.”
120.
It is respectfully
submitted that in the face of the detailed evidence presented by the
petitioner, and the clear suppression by the Railway Ministry, General
Electric’s response on the forgery in its false counter affidavit is
unsatisfactory, evasive and points to General Electric’s unwillingness to
confront the hard evidence of forgery that the petitioner has presented. The
statements made in the alleged sur-rejoinder filed on behalf of General
Electric and the documents attached thereto also do not establish that the
document in question was not a tampered document.
121.
As further evidence
that General Electric Co. covered up the petitioner’s evidence-backed complaint
of forgery, reproduced below is an extract from the letter that the petitioner
received from Mr Alexander Dimitrief on February 3, 2011. This letter states:
“When GETI submitted its RFQ, GETI explicitly stated to
Indian Railways that “all documents accompanying [our] Application are true
copies of their respective originals”.
This statement is a clear attempt to cover up the fact that
not only did General Electric submit a forged document, but that even in the
alternative (without prejudice conceding only for the sake of argument that
General Electric submitted a scanned copy of the Kazakhstan Railway customer
certificate), General Electric’s technical bid for the 2010 Marhowra tender is
clearly non-responsive. As is amply clear from the 2010 Marhowra RFQ clauses
reproduced earlier, all bidders were required to submit original customer
certificates along with Annex IV of their RFQ applications. Clause 2.12.2 of the
2010 Marhowra RFQ reads:
“The
Applicant shall prepare and submit one
original document comprising the Application (together with
original documents required to be submitted along therewith pursuant to this
RFQ) and clearly mark the original document as "ORIGINAL".”
122. General Electric submitted
original customer certificates with its RFQ application for the 2008-2009
tender for the Marhowra Project. General Electric submitted original
certificates for technical capacity eligibility with its RFQ applications for
the 2010 RFQs for the Dankuni and Madhepura Projects. General Electric
collected original customer certificates for submission with the RFQ for the
2010 Marhowra tender. All the customer certificates that General Electric
submitted to the Railway Ministry on July 12, 2010 with the RFQ for the
Marhowra Project were original documents except two – the Kazakhstan Railway
customer certificate and the Vale customer certificate. General Electric had
failed to obtain the original document of the Vale certificate from Vale, a
Brazilian company. And as described
hereinabove, General Electric discovered a last-minute defect in the Kazakhstan
customer certificate. General Electric executives tampered with this Kazakhstan
Railway certificate and submitted the tampered document to the Railway Ministry
thereby perpetrating the fraud, forgery and criminal conspiracy that has been
described hereinabove.
123. It is submitted that in either
case, General Electric’s technical bid for the 2010 Marhowra tender was
non-responsive. It was certainly non-responsive if the Kazakshstan Railways
customer certificate is a tampered document as complained by the petitioner. It
was also still non-responsive even accepting General Electric’s lie that an
unaltered scanned copy of this certificate was submitted. General Electric’s
lawyers know this. Therefore in a clear cover-up attempt, Alexander Dimitrief
stated in his letter dated February 3, 2011, that General Electric informed the
Railway Ministry in its RFQ application itself that it was submitting a scanned
copy of the Kazakhstan Railway certificate. This statement is false. Alexander
Dimitrief quotes a pre-included statement in the prescribed format in the RFQ
application (which General Electric did not introduce or modify) and which stated:
“All information provided in the Application and in the Annexures is true and
correct and all documents accompanying such Application are true copies of
their respective originals.” It is respectfully submitted that this statement
cannot be relied upon by General Electric to falsely claim that it disclosed to
the Railway Ministry that it was submitting a scanned copy of the Kazakhstan
Railway customer certificate. It is submitted that the statement in the Railway
affidavit that Bidders were permitted to submit photocopies of customer
certificates and that no original documents were required with the technical
bids is incorrect and is merely intended to assist the cover-up of the forgery
issue.
124. It is submitted that evidence and affidavits and documents
produced on the record by the petitioner as well as General Electric’s multiple
lies in its purported counter affidavit, lead to the inescapable conclusion
that the Petitioner has disclosed the complete truth and her complaint of
forgery needs to be fully investigated. The first step would be for this Hon’ble Court to
call for and look for itself at the document (the Kazakhstan Railway customer
certificate) that General Electric submitted to the Railway Ministry on July
12, 2010. The petitioner is certain that the forgery and the conspiracy to
commit and cover up the forgery will stand exposed.
Issue of payment of bribes by General
Electric using a third party contractor called Aartech Consultants India
Private Limited
125.
It is submitted that
there are facts and evidence which prima facie establish the need for an
investigation by the CBI under the Prevention of Corruption Act and by United
States federal authorities (under the Foreign Corrupt Practices Act) as to
whether General Electric has paid bribes or illegal payments at any time in the
last twelve years to any public official in India in connection with its
efforts to get a government contract to supply locomotives to the Indian
Railways. Besides the facts and evidence described above, there is evidence
that touches directly upon the likelihood that bribes have been paid by General
Electric to public officials and that in particular, a third party (a shell
company named Aartech Consultants India Private Limited) has been used as the
conduit to transfer these bribes and to launder the bribe-money on behalf of
the recipients.
126.
The petitioner sent
the following complaint on June 10, 2011 describing payment of bribes and FCPA
violations by General Electric in India involving a third party
contract with an entity called Aartech Consultants Private Limited.
“----------
Forwarded message ----------
From: Seema Sapra <seema.sapra@googlemail.com>
Date: Fri, Jun 10, 2011 at 1:11 PM
Subject: FW: Concerns about GE and possible FCPA violations
To:pmosb@pmo.nic.in
Cc: tka.nair@pmo.nic.in,jmg.vc@nic.in ,
r.sri_kumar@nic.in , mr@rb.railnet.gov.in , dch@nic.in ,
g.haldea@nic.in , crb@rb.railnet.gov.in , mm@rb.railnet.gov.in, jeffrey.immelt@ge.com , john.flannery@ge.com ,
"Denniston, Brackett (GE, Corporate)" <brackett.denniston@ge.com >
From: Seema Sapra <seema.sapra@googlemail.com>
Date: Fri, Jun 10, 2011 at 1:11 PM
Subject: FW: Concerns about GE and possible FCPA violations
To:
Cc: tka.nair@pmo.nic.in,
Dear Sir,
I would to like to share some further concerns about
GE Transportation India and corruption. Please see my email below. Thank you.
Yours Sincerely,
Seema Sapra
From: Seema Sapra [mailto:seema.sapra@googlemail.com]
Sent: 10 June 2011 13:08
To: ffetf@usdoj.gov; chairmanoffice@sec.gov;help@sec.gov; fcpa.fraud@usdoj.gov; askdoj@usdoj.gov
Cc: jeffrey.immelt@ge.com;john.flannery@ge.com; 'Denniston, Brackett (GE, Corporate)'
Subject: Concerns about GE and possible FCPA violations
Sent: 10 June 2011 13:08
To: ffetf@usdoj.gov; chairmanoffice@sec.gov;help@sec.gov; fcpa.fraud@usdoj.gov; askdoj@usdoj.gov
Cc: jeffrey.immelt@ge.com;john.flannery@ge.com; 'Denniston, Brackett (GE, Corporate)'
Subject: Concerns about GE and possible FCPA violations
Dear Madam/ Sir,
Some further evidence about GE corruption in India
Thank you,
Seema Sapra
From: Seema Sapra [mailto:seema.sapra@googlemail.com]
Sent: 10 June 2011 12:41
To: 'Denniston, Brackett (GE, Corporate)'; 'Dimitrief, Alexander (GE, Corporate)'
Cc: 'Eglash, Jeffrey C (GE, Corporate)'; jeffrey.immelt@ge.com; john.flannery@ge.com
Subject: Concerns about Aartech Consultants and FCPA
Sent: 10 June 2011 12:41
To: 'Denniston, Brackett (GE, Corporate)'; 'Dimitrief, Alexander (GE, Corporate)'
Cc: 'Eglash, Jeffrey C (GE, Corporate)'; jeffrey.immelt@ge.com; john.flannery@ge.com
Subject: Concerns about Aartech Consultants and FCPA
Mr. Denniston/ Mr. Dimitrief,
I want to place on record my concerns about a third
party contractor that GE Transportation India was using, an entity called
Aartech Consultants. I shared this concern with Mr. Eglash when I spoke with
him on 29 November 2010. I asked Mr. Eglash - what did this consultant do for
GE? Unsurprisingly, Mr. Dimitrief’s letter of 3 February 2011 does not mention
Aartech Consultants.
I first learnt about Aartech Consultants when in June
2010, I received an email asking me to review the documentation for Aartech’s
ITP (Independent Third Party) contract that was up for renewal. I reviewed it
and found there were reputational red flags that had been identified. Plus
Aartech’s application was old and the answers to certain questions were unclear
or potentially wrong. I spoke to Himali Arora, the CFO about this. She then
pointed out that Aartech had a networth of approx. Rs. 30,000 which was also
odd. I discussed the matter with Himali Arora and Ashwani Bhargava, who was
handling compliance and was based in Bangalore
The Aartech Consultants representative was one Sikh
gentleman who visited the AIFACS office. I was never introduced to him and
never spoke with him. On different occasions, I saw him sitting with Prat
Kumar, Ash Nainar and Himali Arora. Plus he seemed to know most other GE
Transportation employees at AIFACS well.
There is a very distinct possibility that Aartech
Consultants was being used to make illegal payments to Indian Railway
officials.
I was told by Anand Chidambaram in August that Aartech
Consultants had good contacts within the Indian Railways and helped GE move
files within the Indian Railways. I was also told that Aartech got a commission
of 5% on every deal.
I fail to understand why GE would need an external
contractor to help move files in the Indian Railways. GE Transportation India
had sufficient human resources to undertake all legitimate interactions with
the Indian Railways in GE’s business dealings and tender applications. What
services did Aartech Consultants provide?
Even though Aartech Consultants’ contract renewal with
GE did not go through in June 2010, the gentleman in question still visited
AIFACS. I was told by Ashish Malhotra in August 2010 that despite the
non-renewal of Aartech’s contract, GE documentation still showed that Aartech
was being paid 5% commission for the turbocharger tender that GE had won. GE
was having internal compliance problems with the terms and conditions of this
deal and I remember hearing Prat ask Alpna Khera, Himali Arora, Ashish Malhotra
and Anand Chidambaram to enlist Aartech Consultants’ support in getting the
Indian Railways to relax certain terms, for example, getting the Indian
Railways to agree to a liquidated damages provision.
Did you investigate whether any illegal payments were
routed through Aartech Consultants by GE? Was there a violation of the Foreign
Corrupt Practices Act? What services did Aartech provide? What payments did GE
make to Aartech Consultants? Were these justifiable?
Sincerely,
Seema Sapra”
127. The petitioner sent
another email complaint dated June 15, 2011 about FCPA violations by General
Electric and the use of a third party contractor (Aartech Consultants India
Private Limited) to pay bribes and kickbacks to Indian government officials in
exchange for bid manipulation with intent to award the lucrative contract for
the proposed diesel locomotive factory to General Electric.
“From: Seema Sapra [mailto:seema.sapra@googlemail.com]
Sent: 15 June 2011 09:10
To: pmosb@pmo.nic.in
Cc: tka.nair@pmo.nic.in; jmg.vc@nic.in; r.sri_kumar@nic.in; mr@rb.railnet.gov.in; dch@nic.in; g.haldea@nic.in;crb@rb.railnet.gov.in; mm@rb.railnet.gov.in; jeffrey.immelt@ge.com; john.flannery@ge.com; 'Denniston, Brackett (GE, Corporate)'
Subject: FW: Additional information on Concerns about GE and possible FCPA violations
Sent: 15 June 2011 09:10
To: pmosb@pmo.nic.in
Cc: tka.nair@pmo.nic.in; jmg.vc@nic.in; r.sri_kumar@nic.in; mr@rb.railnet.gov.in; dch@nic.in; g.haldea@nic.in;crb@rb.railnet.gov.in; mm@rb.railnet.gov.in; jeffrey.immelt@ge.com; john.flannery@ge.com; 'Denniston, Brackett (GE, Corporate)'
Subject: FW: Additional information on Concerns about GE and possible FCPA violations
Dear Sir,
I would like to provide additional information about
corrupt activities by GE Transportation in India
Sincerely,
Seema Sapra
From: Seema Sapra [mailto:seema.sapra@googlemail.com]
Sent: 14 June 2011 18:16
To: ffetf@usdoj.gov;chairmanoffice@sec.gov; help@sec.gov; fcpa.fraud@usdoj.gov; askdoj@usdoj.gov
Cc: jeffrey.immelt@ge.com; john.flannery@ge.com; 'Denniston, Brackett (GE, Corporate)'; 'Dimitrief, Alexander (GE, Corporate)'; 'Eglash, Jeffrey C (GE, Corporate)'; fwarin@gibsondunn.com
Subject: Additional information on Concerns about GE and possible FCPA violations
Sent: 14 June 2011 18:16
To: ffetf@usdoj.gov;chairmanoffice@sec.gov; help@sec.gov; fcpa.fraud@usdoj.gov; askdoj@usdoj.gov
Cc: jeffrey.immelt@ge.com; john.flannery@ge.com; 'Denniston, Brackett (GE, Corporate)'; 'Dimitrief, Alexander (GE, Corporate)'; 'Eglash, Jeffrey C (GE, Corporate)'; fwarin@gibsondunn.com
Subject: Additional information on Concerns about GE and possible FCPA violations
Dear Madam/ Sir,
Please find attached internet search results for
Aartech Consultants, the independent third party contractor that GE
Transportation India was using to liaise with the Indian Railways. Aartech
Consultants shows up in search results as a recruitment agency.
I emailed about Aartech Consultants on 10 June 2011.
(Before I sent my email, I googled “Aartech Consultants”and all the search
results described it as a recruitment firm.) When I googled Aartech Consultants
again on 13 June, the “recruitment” links did not show up. However, they still
show up if you do not enter the full name. Instead there were 3-4 results that
now describe Aartech as a business consultancy. Screen shots of these internet
search results are attached.
The representative from Aartech Consultants who
visited the GE office was Mr. Inderjeet Singh. He does not seem to hold any
special qualifications that might have qualified him to provide any consulting
services to GE. Plus he seems to be the sole representative and employee.
Thank you,
Seema Sapra”
128. Paragraph 14 of Civil
Writ Petition 1280 of 2012 reads:
“The Petitioner
has complained that Respondent No. 6 had entered into a third party contract
with an entity called Aartech Consultants India Private Limited (hereafter
referred to as Aartech) and that this contract was used to facilitate illegal
payments and to pay bribes to Indian government officials. This would amount to
offences of corruption under the Prevention of Corruption Act and also
constitute a violation of the Unites States’ Foreign Corrupt Practices Act. The
Petitioner raised several red flags that call for an investigation. In June/ July 2010, the
Petitioner (while still at GE) was asked to review and authorize a renewal of
the contract between Respondent 6 and Aartech. The Petitioner found some red
flags and deferred authorization until these red flags were addressed. First,
Aartech had a total share capital of less than Rs. 50, 000. Second, GE’s
routine internet and reputational searches conducted under GE’s internal Third
Party Contract Authorisation Policy had found certain reputational red flags.
Third, Aartech’s application was outdated and seemed non-compliant. The
Petitioner was later told by Mr. Anand Chidambaram, an employee of Respondent 6
that Aartech helped GE move files in the offices of the Indian Railways and
received a 5% commission on every contract. The Managing Director of Aartech is
one Mr. Inderjit Singh who was the main contact for GE and appeared to be the
sole employee/ representative of Aartech. Mr. Inderjit Singh is a graduate and
does not have any educational/ professional/ technical qualifications or
expertise that would make him qualified to provide business consultancy
services to GE in respect of GE’s rail transportation business. Further since
leaving GE, the Petitioner found internet search results for Aartech and Mr.
Inderjit Singh that featured Aartech as a provider of recruitment consulting
services. This raises a red flag suggesting money laundering. Given that other
evidence and documents point to several instances of corrupt contact between GE
employees and Indian Railways officials, these red flags about a third party
contractor (Aartech) call for an investigation into the nature of services
being provided by Aartech to GE, into whether payments made to Aartech were
inflated and into whether Aartech was acting as a conduit to bribe Indian
government officials.”
129. In its purported counter
affidavit dated July 3, 2012 filed in Civil Writ Petition 1280 of 2012, General
Electric has admitted that “GE India” has an International Sales Representative
Agreement with Aartech Consultants India Private Limited. General Electric further states in the said
counter affidavit that its agreement with Aartech is a “bonafide commercial
contract completely unrelated to the Indian Railway tenders in question”.
General Electric describes its dealings with Aartech as an “innocent act of
GE’s Indian affiliate contracting with a local Indian business on matters
completely unrelated” to the Madhepura, Marhowra and Dankuni Projects/ tenders.
I state that General Electric is again misrepresenting facts and except for the
admission that it has had dealings with Aartech, these statements in General
Electric’s counter-affidavit are lies and intended to cover up the petitioner’s
complaints without any kind of investigation. Mr K R Radhakrishnan, who has
filed the false counter affidavit purportedly on behalf of GE without authority
documents has committed perjury by stating these blatant falsehoods on oath.
130. In August 2010, while
the petitioner was still employed by General Electric, she had looked at the
third party contracts that GE Transportation had entered into globally. All
these contracts (which were mandatorily required by internal General Electric
policies to go through a rigorous compliance review process under and in
accordance with a written and detailed Independent Third Party Contract General
Electric Policy document) were listed on the webpage of the internal General
Electric website that was used by the GE Transportation legal team. The
contract between General Electric and Aartech Consultants was listed under
these contracts on GE Transportation’s Legal Team website. This website is
maintained by the office of the General Counsel for GE Transportation based in Erie , Pennsylvania in the
United States and is hosted
on General Electric’s US
131. In its counter affidavit
dated July 3, 2012 filed in CWP 1280 of 2012, General Electric states that GE
India has entered into an International Sales Representative Agreement with
Aartech Consultants India Private Limited. The counter affidavit further
describes this contract as “GE’s Indian affiliate contracting with a local
Indian business”. These statements are false. The contract between General
Electric and Aartech was a contract between GE Transportation (a business unit
of General Electric Company, a US
corporation) and Aartech, otherwise this contract would not be available on the
US
132. Some background as to
how General Electric’s business in India India
was not consolidated into an India India India India New
Delhi
133. The petitioner was asked
to review and approve the renewal of General Electric’s contract with Aartech
in June 2010 as Legal Counsel for GE Transportation in India New
Delhi United States US India United States
134. In an attempt to cover
up the petitioner’s complaint, Mr K R Radhakrishnan has lied under oath in
General Electric’s purported counter affidavit when he states that the contract
with Aartech was an innocent business contract between GE India and a local
Indian business (Aartech). Mr K R Radhakrishnan does not name which GE company
signed the contract with Aartech. Instead he uses the vague term “GE India”. If
the contract with Aartech that was up for renewal in June 2010 was a contract
with “GE India”, then this contract would not have been sent to the petitioner
for renewal approval by GE Transportation in the US and neither would Mr David
Tucker or Mr Ashfaq Nainar have been
involved in giving business and commercial approvals for such renewal. Instead
of coming clean and owning up to an evidence-backed corruption and FCPA complaint
that requires investigation, General Electric has attempted to cover-up and
bury the issue.
135. What is absolutely clear
is that GE Transportation had entered into a third party contract with Aartech
before 2010 and this contract was subsequently being considered for renewal in
June 2010.
136. To further expose the
lies in General Electric’s counter affidavit in its attempt to cover-up the
complaint regarding its contract with Aartech, it is pointed out that the said
counter affidavit states that the contract with Aartech is unrelated to the
Indian Railway tenders. The counter affidavit states that General Electric has
an international sales representative agreement with Aartech, but it evasively
does not disclose what business or product this agreement covers.
137. The petitioner was told
in August 2010 by Mr Anand Chidambaram (Chidambaram Balakrishnan) a General
Electric executive with the GE Transportation India team that Mr Inderjeet
Singh, the managing director of Aartech Consultants India Private Limited used
to be or was a small supplier to Indian Railways and therefore had good
contacts within Indian Railways and helped General Electric ‘move government
files’. The LinkedIn profile for Mr Inderjeet Singh, the managing director at
Aartech Consultants India Private Limited, shows his industry as
“Transportation/Trucking/Railroad”.
138. Why would GE
Transportation appoint Aartech Consultants India Private Limited or Mr
Inderjeet Singh as its International Sales Representative? Mr Inderjeet Singh
has a graduate degree from St Stephen’s College. Neither he nor Aartech have
any international business experience in the rail sector. Mr Inderjeet Singh
has no professional or technical qualifications that would qualify him to act
as GE Transportation’s international sales representative. GE Transportation
has a large sales team spread all over the world wherever GE Transportation’s
customers are. Why would GE Transportation need to appoint a small supplier to
Indian Railways as its international sales representative?
139. In an attempt to
cover-up its murky and corrupt dealings with Aartech Consultants India Private
Limited, General Electric in its false counter-affidavit dated July 3, 2012 in
CWP 1280/2012 has avoided replying to or even acknowledging any of the facts or
evidence presented by the petitioner, and instead has made vague, evasive and
false statements. General Electric has not disclosed which General Electric
company signed the contract with Aartech or which industry sector or product
was serviced by the international sales representative contract with Aartech.
140. All that the said
counter affidavit states is that General electric’s agreement with Aartech is
“completely unrelated to the Indian Railway tenders in question”. This
statement is false and constitutes another instance of perjury by Mr K R
Radhakrishnan who has filed the counter affidavit on behalf of General
Electric. While the written contract between GE Transportation and Aartech
might not mention the multi-billion dollar Indian Railway tenders for the
Madhepura, Marhowra and Dankuni Projects, General Electric’s admission that it
appointed Aartech as its international sales representative confirms that the
third party contract between General Electric and Aartech was used to bribe
Indian Railways officials and to pay kickbacks to Indian government officials
in exchange for and as quid pro quo for the manipulation of bid processes and
bid documents as part of a criminal conspiracy to award the contract for the
Marhowra locomotive factory Project to General Electric.
141. Mr Inderjeet Singh was a
regular visitor to the New Delhi India (Ms Himali Arora) and knew all the
employees in GE Transportation’s Delhi India India US bosses was that without new business from the
Marhowra Project, GE Transportation’s India India
team of GE Transportation did not have much business in India US India
142. The above facts
establish that General Electric is hiding that Aartech Consultants India
Private Limited had a contract with GE Transportation in 2010 and that Mr
Inderjeet Singh from Aartech was in regular touch with Mr Pratyush Kumar in
connection with General Electric’s bids for the 2010 tenders for the Marhowra,
Madhepura and Dankuni Projects. General Electric’s contract with Aartech was not
a bonafide commercial contract but was a contract that General Electric was
using as a conduit to pay bribes and kickbacks to Indian government officials.
143. General Electric has not
addressed any of the evidence adduced by the Petitioner in connection with her
complaint concerning Aartech. General Electric has also failed to answer any of
the questions raised. Instead General Electric has resorted to a cover-up in
its counter affidavit through fake outrage at the petitioner’s complaint and
attempts to discredit the petitioner by smearing her and questioning her
motives.
144. The petitioner has
produced internet search results (which are available on the court record in
this petition) that show Aartech Consultants India Private Limited as a
recruitment consulting firm. Screen shots of these internet search results and
of web-pages showing Aartech as a recruitment firm have been emailed to General
Electric and copies have also been filed in the Delhi High Court in CWP 1280/
2012. Why is General Electric Company’s international sales representative
showing up in internet searches in cheap advertisements for manpower
recruitment? This is a red flag that points in the direction that Aartech
Consultants India Private Limited is a shell company being used to transfer bribes
to Indian public officials by General Electric Company.
145. According to General
Electric’s own internal compliance policies and compliance training guidance,
such evidence in case of third party contractors raises a red flag that the
third party contract in question might not be bonafide but instead a vehicle to
transfer bribes and payments that are illegal under the US Foreign Corrupt
Practices Act and to launder such bribes. Yet instead of acknowledging this
evidence, General Electric in its counter affidavit dared July 3, 2012 makes
the following statement: “the Answering Respondents deny that the purported
Internet searches allegedly conducted by the Petitioner long after her brief
consultancy of a few months with GE India are in any way indicative of money
laundering”. It is submitted that these internet searches and search results
and webpages are neither purported nor alleged. Screen shots of these internet
searches have been emailed to Mr Brackett Denniston, the General Counsel of
General Electric Co on his official GE email address. Printed copies and soft
copies of these internet search results have been produced as part of
additional documents filed before the Delhi High Court in CWP 1280 of 2012 and
these have been duly served on the law-firm AZB that is purportedly claiming to
represent General Electric in CWP 1280/ 2012.
146. It is submitted that
General Electric’s own internet reputational searches for Aartech carried out
under its own Independent Third Party Policy in 2010 raised red-flags which
among other reasons prompted the petitioner to withhold approval for the
renewal of this contract in June 2010 acting in her capacity as Legal Counsel
for GE Transportation India. This evidence was available on General Electric’s US
147. Can General Electric
explain why the International Sales Representative for GE Transportation
(Aartech Consultants India Private limited) is in the business of providing
recruitment services in India
148. The petitioner has
adduced sufficient evidence to support her complaint that General Electric was
using its third party contract with Aartech to pay bribes and kickbacks to
Indian government officials in order to win the multibillion dollar tender for
the proposed diesel locomotive factory in Marhowra. Yet General Electric has
ignored this evidence and states through a false counter affidavit that no case
is made out for any investigation into Aartech’s dealings with General Electric
or with the Indian Railways. It is submitted that besides the evidence
described above which establishes that General Electric was using Aartech as a
conduit for bribes and as a facilitator of corrupt dealings with Indian
government officials, General Electric’s false statements and evasions in its
false and unauthorised counter affidavit provide further confirmation that the
Petitioner’s complaint has substance and that General Electric is still
covering up this matter.
149. The petitioner points to
a very curious statement in General Electric’s counter-affidavit: “The
Answering Respondents further state that no investigation by the Answering
Respondents has revealed any evidence of the allegations made by the Petitioner
in respect of Aartech”. In the very next sentence, the counter affidavit states
(to paraphrase) that the petitioner has not placed on record any proof to substantiate
these complaints and has not made out any case for investigation into Aartech.
These statements are a piece of verbal sophistry intended to mislead the court
and cover-up this matter. The petitioner’s first complaint about Aartech was
made in June 2011, four months after General Electric completed its alleged
internal investigation. So General Electric has admittedly not investigated the
complaint about Aartech. Yet it wants to mislead the court that it has done so.
Therefore the counter affidavit states “no investigation by the Answering
Respondents has revealed any evidence of the allegations made by the Petitioner
in respect of Aartech” It is pointed out that this sentence does not state that
the complaint against Aartech was investigated, instead it attempts to mislead
the court by referring to unconnected investigations which did not look into
the Aartech complaint. The fact is that despite substantial evidence (as
described in the petitioner’s complaints sent to General Electric in June 2010,
in the writ petition, in the rejoinder affidavit dated July 9, 2012 filed by
the petitioner in CWP 1280/2012, and hereinabove) that calls for a full
investigation into General Electric’s dealings with Aartech, General Electric
has not investigated these complaints. Instead of an investigation, General
Electric has caused false statements to be made on oath before this court and
has obfuscated facts about its dealings with Aartech. This attempt to obfuscate
the facts and mislead the court about the nature of General Electric’s dealings
and its contract with Aartech, confirms that General Electric has much to hide
and is covering up its corrupt association with Aartech Consultants India
Private Limited. These lies in the false counter affidavit purportedly filed on
behalf of General Electric are further evidence of the need for a full
investigation into the use by General Electric of its third party contract with
Aartech for the payment of bribes and kickbacks. Instead of dealing with the
facts and evidence of corruption and bribes with integrity and honesty, the
fake exhibition of excess outrage by General Electric in its false and
unauthorised counter-affidavit (while not a single fact is adequately rebutted
or even acknowledged and several lies are stated) is a giveaway of the cover-up
General Electric is engaged in.
150. The Petitioner highlights the following
i.
General Electric has
admitted that it appointed Aartech as its international sales representative.
ii.
Aartech is a shell
company, with a miniscule bank balance, with no track record of similar
assignments or experience, with a suspicious internet profile, with no staff,
with a residential address as its office, with a principal (Inderjeet Singh)
who has no qualifications to render him eligible for this role, and who appears
to be an associate of Mr Montek Singh Ahluwalia (both appear to have been
contemporaries at St Stephen’s College and would know each other) and Mr Montek
Singh Ahluwalia is not only in a position to but has been accused by Government
of India officials of pushing for award of this contract to General Electric on
favourable terms.
iii.
General Electric has
been making payments to Aartech.
iv.
The petitioner was
asked to approve the renewal of General Electric’s contract with Aartech, such
approvals are the job of in-house counsel according to General Electric’s
compliance policies, and now General Electric in affidavits filed in this writ
petition claims that the petitioner was not an in-house counsel but was merely
an external consultant on a short-term contract. (The petitioner was also asked
to approve a third party contract for General Electric in Pakistan ). Why then was the
petitioner asked to approve the renewal of General Electric’s contract with
Aartech when this is a job that is supposed to be performed by in-house counsel
at General Electric under General Electric’s supposedly sacrosanct “compliance
policies”?
v.
Several well-founded
and evidence backed complaints have been made from several sources (not just
the petitioner) that the impugned tenders are plagued by corruption,
tailor-made tenders, manipulated bid processes and bid documents, huge
unjustifiable concessions by the government, lack of transparency and
accountability, mid-way rule changing, altered and misquoted minutes of government
meetings, allegations of ‘bananna republics’ and ‘con-games’, agendas to
compromise the interest of the Railways, allegations of conflict of interest,
allegations of by-passing designated government officials etc., all pointing
towards corruption that has benefited or was intended to benefit General
Electric.
vi.
Most bribes are paid
through third parties using fake contracts or shell companies to transfer
payments.
vii.
GE Transportation does
not manufacture anything in India
or export from India so it
obviously does not need an international sales representative based in India
like Aartech especially when it has dedicated senior sales staff here.
viii.
All of GE
Transportations’s sales/ contracts in India are to/with the Railway
Ministry and follow a public tender process so a third party sales
representative like Aartech is not needed.
ix.
GE Transportation
India CEO (Pratyush Kumar) is present in India only to win new business like
the Marhowra tender. There is no other business in India for GE Transportation that would
call for a third party sales representative like Aartech.
x.
General Electric is
reluctant to investigate its dealings with Aartech even in the face of all this
evidence.
xi.
General Electric has
attempted to subvert these proceedings by using a lawyer (without a
vakalatnama) to file a false counter affidavit (signed and verified by an
unauthorised person) to make false statements under oath in an attempt to cover
up the complaints concerning Aartech and the complaints of other illegalities.
xii.
Employees/ lawyers of
General Electric have had the petitioner drugged and poisoned and have
attempted to have her murdered while simultaneously smearing her and by trying
to false label her mentally ill.
151.
The facts related
establish that the petitioner’s complaint that General Electric has paid bribes
to Indian government officials and to Indian public officials using its
contract with Aartech Consultants India Private Limited as a conduit to
transfer and launder these bribes is substantial enough to justify a full investigation.
Issue of
tailoring bid documents to assist General Electric to avoid making necessary
disclosures under mandatory GOI guidelines
152. The General Electric bidding
entity for both the impugned tenders, GE Global Sourcing India Private Limited (respondent
7) is a shell company and only meets the financial and technical eligibility
conditions in the Marhowra and Madhepura RFQs by using the parent company,
General Electric Company as is “Associate”.
153. Illegal
modifications were made by respondent 4 (with the collusion of corrupt
officials from the Planning Commission and the Railway Ministry) to the 2010
RFQ for the proposed diesel locomotive factory with intent to dilute the
disclosure requirements mandated by the Government of India Guidelines for
qualification of Bidders seeking to acquire stakes in Public Sector Enterprises
through the process of disinvestment bearing Office Memorandum No. 6/4/2001DDII
and dated July 13, 2001. These modifications were made at the behest of General
Electric and are intended to assist GE to qualify without having to comply with
the said GOI guidelines. General Electric has failed to comply with these
guidelines in both the 2010 Marhowra and the 2010 Madhepura tenders.
154. The Government of India,
Department of Disinvestment has issued ‘Guidelines for qualification of Bidders
seeking to acquire stakes in Public Sector Enterprises through the process of
disinvestment’ vide Office Memorandum No. 6/4/2001DDII dated July 13, 2001.
Compliance with these Government of India guidelines is mandatory for tenders
like the tenders for the proposed Madhepura electric locomotive factory and the
proposed Marhowra diesel locomotive factory. These guidelines are applicable to
both the Marhowra and Madhepura RFQs for 2010.
155. Clause 1.3.2 of the 2010
Marhowra RFQ provides:
“Government
of India
has issued guidelines (see Appendix-IV) for qualification of bidders seeking to
acquire stakes in any public sector enterprise through the process of
disinvestment. These guidelines shall apply mutatis mutandis to this Bidding
Process. The Authority shall be entitled to disqualify an Applicant in
accordance with the aforesaid guidelines at any stage of the Bidding Process.
Applicants must satisfy themselves that they are qualified to bid, and should
give an undertaking to this effect in the form at Appendix-I.”
Similarly
the second paragraph of Clause 1.2.1 of the 2010 Madhepura RFQ provides:
“Government
of India
has issued guidelines (see Appendix-V) for qualification of bidders seeking to
acquire stakes in any public sector enterprise through the process of
disinvestment. These guidelines shall apply mutatis mutandis to this Bidding
Process. The Authority shall be entitled to disqualify an Applicant in
accordance with the aforesaid guidelines at any stage of the Bidding Process.
Applicants must satisfy themselves that they are qualified to bid, and should
give an undertaking to this effect in the form at Appendix-I.”
156. These Government of India
guidelines provide as follows:
“Government
has examined the issue of framing comprehensive and transparent guidelines
defining the criteria for bidders interested in PSE disinvestment so that the
parties selected through competitive bidding could inspire public confidence.
Earlier, criteria like net worth, experience etc. used to be prescribed. Based
on experience and in consultation with concerned departments, Government has
decided to prescribe the following additional criteria for the
qualification/disqualification of the parties seeking to acquire stakes in
public sector enterprises through disinvestment:
(a)
In regard to matters other than the security and integrity of the country, any
conviction by a Court of Law or indictment/ adverse order by a regulatory
authority that casts a doubt on the ability of the bidder to manage the public
sector unit when it is disinvested, or which relates to a grave offence would
constitute disqualification. Grave offence is defined to be of such a nature
that it outrages the moral sense of the community. The decision in regard to
the nature of the offence would be taken on case to case basis after
considering the facts of the case and relevant legal principles, by the
Government of India.
(b)
In regard to matters relating to the security and integrity of the country, any
charge-sheet by an agency of the Government/ conviction by a Court of Law for
an offence committed by the bidding party or by any sister concern of the
bidding party would result in disqualification. The decision in regard to the
relationship between the sister concerns would be taken, based on the relevant
facts and after examining whether the two concerns are substantially controlled
by the same person/ persons.
(c)
In both (a) and (b), disqualification shall continue for a period that
Government deems appropriate.
(d)
Any entity, which is disqualified from participating in the disinvestment
process, would not be allowed to remain associated with it or get associated
merely because it has preferred an appeal against the order based on which it
has been disqualified. The mere pendency of appeal will have no effect on the
disqualification.
(e)
The disqualification criteria would come into effect immediately and would
apply to all bidders for various disinvestment transactions, which have not
been completed as yet.
(f)
Before disqualifying a concern, a Show Cause Notice why it should not be
disqualified would be issued to it and it would be given an opportunity to
explain its position.
(g)
Henceforth, these criteria will be prescribed in the advertisements seeking
Expression of Interest (EOI) from the interested parties. The interested
parties would be required to provide the information on the above criteria,
along with their Expressions of Interest (EOI). The bidders shall be required
to provide with their EOI an undertaking to the effect that no investigation by
a regulatory authority is pending against them. In case any investigation is
pending against the concern or its sister concern or against its CEO or any of
its Directors/ Managers/ employees, full details of such investigation
including the name of the investigating agency, the charge/ offence for which
the investigation has been launched, name and designation of persons against
whom the investigation has been launched and other relevant information should
be disclosed, to the satisfaction of the Government. For other criteria also, a
similar undertaking shall be obtained along with EOI.”
157. In order to enforce compliance
with these Guidelines, Appendix I (Letter comprising the Application for
Qualification) of the 2010 RFQ for the proposed diesel locomotive factory at
Marhowra requires certain certifications from Bidders.
158. The relevant paragraphs in
Appendix I (Letter comprising the Application for Qualification) of the 2010
RFQ for the proposed diesel locomotive factory at Marhowra are the following:
(i)
“ I/We certify that in the last
three years, we/ any of the Consortium Members have neither failed to perform
on any contract, as evidenced by imposition of a penalty or a judicial
pronouncement or arbitration award, nor been expelled from any project or
contract nor have had any contract terminated for breach on our part.” –
required as per paragraph 5 of the Letter comprising the Application for
Qualification.
(ii)
“I/ We certify that in regard to
matters other than security and integrity of the country, we have not been
convicted by a Court of Law or indicted or adverse orders passed by a
regulatory authority which could cast a doubt on our ability to undertake the
Project or which relates to a grave offence that outrages the moral sense of
the community.” – required as per paragraph 10 of the Letter comprising the
Application for Qualification.
(iii)
“I/ We further certify that in regard to matters relating to security and
integrity of the country, we have not been charge-sheeted by any agency of the
Government or convicted by a Court of Law for any offence committed by us or by
any of our Associates.” – required as per paragraph 11 of the Letter comprising
the Application for Qualification.
(iv)
“I/ We further certify that no investigation by a regulatory authority is
pending either against us or against our Associates or against our CEO or any
of our Directors/ Managers/ employees that affects our ability to undertake /
execute the Project.” – required as per paragraph 12 of the Letter comprising
the Application for Qualification.
(v)
“I/ We further certify that we are
not disqualified in terms of the additional criteria specified by the
Department of Disinvestment in their OM No. 6/4/2001DDII dated July 13, 2001, a
copy of which forms part of the RFQ.” – required as per paragraph 13 of the
Letter comprising the Application for Qualification.
(vi) “A statement by the Applicant and each of
the members of its Consortium (where applicable) disclosing material
nonperformance or contractual noncompliance in past projects, contractual
disputes and litigation / arbitration in the recent past that exceed 5% of the
contract value is given below (Attach extra sheets, if necessary)”- required as
per paragraph 7 of Annex I to the Letter
comprising the Application for Qualification.
159. The corresponding paragraphs in
Appendix I (Letter comprising the Application for Qualification) of the 2010
RFQ for the proposed electric locomotive factory at Madhepura are as follows:
(i)
I/ We certify that in
the last three years, we/ any of the Consortium Members or our/ their
Associates have neither failed to perform on any contract, as evidenced by
imposition of a penalty by an arbitral or judicial authority or a judicial
pronouncement or arbitration award, nor been expelled from any project or
contract by any public authority nor have had any contract terminated by any
public authority for breach on our part. - required as per paragraph 6 of the
Letter comprising the Application for Qualification.
(ii)
I/ We certify that in
regard to matters other than security and integrity of the country, we/ any
Member of the Consortium or any of our/ their Associates have not been
convicted by a Court of Law or indicted or adverse orders passed by a
regulatory authority which could cast a doubt on our ability to undertake the
Project or which relates to a grave offence that outrages the moral sense of
the community. - required as per paragraph 11 of the Letter comprising the
Application for Qualification.
(iii)
I/ We further certify that in regard
to matters relating to security and integrity of the country, we/ any Member of
the Consortium or any of our/ their Associates have not been charge-sheeted by
any agency of the Government or convicted by a Court of Law. - required as per
paragraph 12 of the Letter comprising the Application for Qualification.
(iv) I/ We further certify that no
investigation by a regulatory authority is pending either against us/ any
Member of the Consortium or against our/ their Associates or against our CEO or
any of our directors/ managers/ employees. - required as per paragraph 13 of
the Letter comprising the Application for Qualification.
(v)
I/ We further certify
that we are qualified to submit a Bid in accordance with the guidelines for
qualification of bidders seeking to acquire stakes in Public Sector Enterprises
through the process of disinvestment issued by the GOI vide Department of
Disinvestment OM No. 6/4/2001-DD-II dated 13th July, 2001 which guidelines
apply mutatis mutandis to the Bidding Process. A copy of the aforesaid
guidelines form part of the RFQ at Appendix-V thereof. - required as per
paragraph 14 of the Letter comprising the Application for Qualification.
(vi) A statement by the Applicant
and each of the Members of its Consortium (where applicable) or any of their
Associates disclosing material non-performance or contractual non-compliance in
past projects, contractual disputes and litigation/ arbitration in the recent past
is given below (Attach extra sheets, if necessary) - required as per paragraph
6 of Annex I to the Letter comprising the Application for Qualification.
160. Both the 2010 RFQs (and the 2008
RFQs as well) for the proposed diesel locomotive factory at Marhowra and the
proposed electric locomotive factory at Madhepura, required the Bidders to
comply with and give undertakings and certifications in accordance with the
Government of India Guidelines. Neither General Electric Co., nor its principal
Indian subsidiary carrying on business in India (GE India Industrial Private
Limited), were in a position to provide the certifications and disclosures
required by the Government of India guidelines. General Electric Company
therefore fronted a shell company as the Bidder for both the 2010 tenders. This
shell company, GE Global Sourcing India Private Limited had not executed any
contracts and therefore did not need to make any disclosures pertaining to
convictions/ indictments/ adverse orders/ charge-sheets or pending investigations
by a regulatory authority. General Electric Company used GE Global Sourcing
India Private Limited, a shell company, to front as the applicant for these
locomotive tenders because neither General Electric Co. nor GE India Industrial
Private Limited were able or willing to provide the certifications and
disclosures required by the RFQs and the Government of India Guidelines.
161. Despite using GE Global Sourcing
India Private Limited as the applicant for the impugned tenders, GE still found
it difficult to provide these certifications because the Government of India
Guidelines require certifications on behalf of the Bidder and its sister
concerns. These guidelines also require disclosure of investigations by
regulatory authorities against the Bidder or its sister concerns or against its
CEO or any of its Directors/ Managers/ employees. The disclosure required
covers full details of such investigation including the name of the
investigating agency, the charge/ offence for which the investigation has been
launched, name and designation of persons against whom the investigation has
been launched and other relevant information to the satisfaction of the
Government.
162. To overcome this hurdle, General
Electric managed to get the language of the 2010 RFQ for the proposed diesel
locomotive factory at Marhowra changed and diluted. A comparison of the
corresponding clauses in the 2010 Marhowra RFQ and the 2010 Madhepura RFQ shows
how the language of the 2010 Marhowra RFQ was tailored to enable General
Electric to avoid disclosing any convictions/ indictments/ adverse orders/
charge-sheets or pending investigations by a regulatory authority on behalf of
the Associates/ sister concerns of the Bidder and their CEO or Directors/
Managers/ employees.
163. GE Global Sourcing India Private
Limited, a wholly-owned subsidiary of General Electric Co. has listed General
Electric Co. as its Associate in the technical/ RFQ bids for the 2010 tenders
for the Madhepura electric locomotive factory and the Marhowra diesel locomotive
factory and also in its RFQ application for the Dankuni project (another Indian
railways tender that General Electric was short-listed for).
164. Clause 2.2.8 of the 2010 RFQ for
the proposed diesel locomotive factory at Marhowra defines an Associate as
follows and provides:
“In
computing the Technical Capacity and Net Worth of the Applicant/ Consortium
members under Clauses 2.2.2, 3.2 and 3.4, the Technical Capacity and Net Worth
of their respective Associates would also be eligible hereunder.
For
purposes hereof, Associate means in relation to the Applicant/ Consortium
member, a person who controls, is controlled by, or is under the common control
with such Applicant/ Consortium member (the “Associate”). As used in this
definition, the expression “control” means, with respect to a person which is a
company or corporation, the ownership, directly or indirectly, of more than 50%
(fifty per cent) of the voting shares of such person, and with respect to a
person which is not a company or corporation, the power to direct the
management and policies of such person, whether by operation of law or by
contract or otherwise.”
Clause
2.2.9 (ii) of the 2010 RFQ for the proposed diesel locomotive factory at
Marhowra is also relevant. It provides:
“information
supplied by an Applicant (or other constituent member if the Applicant is a
Consortium) must apply to the Applicant or constituent member named in the
Application and not, unless specifically requested, to other associated
companies or firms. Invitation to submit Bids will be issued only to Applicants
whose identity and/ or constitution is identical to that at prequalification”.
165. The corresponding clauses in the
2010 RFQ for the proposed electric locomotive factory at Madhepura are Clause
2.2.9 and 2.2.10 (b). Clause 2.2.9 of the 2010 Madhepura RFQ provides:
“In
computing the Technical Capacity and Net Worth of the Applicant/ Consortium
Members under Clauses 2.2.2, 2.2.4 and 3.2, the Technical Capacity and the Net
Worth of their respective Associates would also be eligible hereunder.
For
purposes of this RFQ, Associate means, in relation to the Applicant/ Consortium
Member, a person who controls, is controlled by, or is under the common control
with such Applicant/ Consortium Member (the “Associate”). As used in this
definition, the expression “control” means, with respect to a person which is a
company or corporation, the ownership, directly or indirectly, of more than 50%
(fifty per cent) of the voting shares of such person, and with respect to a
person which is not a company or corporation, the power to direct the
management and policies of such person by operation of law.”
Clause
2.2.10 (b) of the 2010 Madhepura RFQ provides:
“information
supplied by an Applicant (or other constituent Member if the Applicant is a
Consortium) must apply to the Applicant, Member or Associate named in the
Application and not, unless specifically requested, to other associated
companies or firms. Invitation to submit Bids will be issued only to Applicants
whose identity and/ or constitution is identical to that at pre-qualification”.
166. The Madhepura 2010 RFQ was issued on March 2, 2010. The
Marhowra 2010 RFQ was issued on March 23, 2010.
167. The corresponding requirements
in Appendix I (Letter comprising the Application for Qualification) of the 2008
RFQ for the proposed electric locomotive factory at Madhepura were as follows:
(i)
We certify that in the
last three years, we/ any of the Consortium Members have neither failed to
perform on any contract, as evidenced by imposition of a penalty or a judicial
pronouncement or arbitration award, nor been expelled from any project or
contract nor have had any contract terminated for breach on our part. -
required as per paragraph 6 of the Letter comprising the Application for Qualification.
(ii)
I/ We certify that in
regard to matters other than security and integrity of the country, we have not
been convicted by a Court of Law or indicted or adverse orders passed by a
regulatory authority which could cast a doubt on our ability to undertake the
Project or which relates to a grave offence that outrages the moral sense of
the community. - required as per paragraph 11 of the Letter comprising the
Application for Qualification.
(iii)
I/ We further certify that in regard
to matters relating to security and integrity of the country, we have not been
charge-sheeted by any agency of the Government or convicted by a Court of Law
for any offence committed by us or by any of our Associates. - required as per
paragraph 12 of the Letter comprising the Application for Qualification.
(iv) I/ We further certify that no
investigation by a regulatory authority is pending either against us or against
our Associates or against our CEO or any of our Directors/ Managers/ employees.
- required as per paragraph 13 of the Letter comprising the Application for
Qualification.
(v) I/ We further certify that
we are qualified to submit a Bid in accordance with the guidelines for
qualification of bidders seeking to acquire stakes in Public Sector Enterprises
through the process of disinvestment issued by the GOI vide Department of
Disinvestment OM No. 6/4/2001-DD-II dated 13th July, 2001 which guidelines
apply mutatis mutandis to the Bidding Process. A copy of the aforesaid
guidelines form part of the RFQ at Appendix-IV thereof. - required as per
paragraph 14 of the Letter comprising the Application for Qualification.
(vi) A statement by the Applicant
and each of the Members of its Consortium (where applicable) disclosing
material non-performance or contractual noncompliance in past projects,
contractual disputes and litigation/ arbitration in the recent past is given
below (Attach extra sheets, if necessary) - required as per paragraph 6 of
Annex I to the Letter comprising the Application for Qualification.
Clause
2.2.9 of the 2008 Madhepura RFQ defines an ‘Associate” and provides as follows:
“In
computing the Technical Capacity and Net Worth of the Applicant/ Consortium
Members under Clauses 2.2.2, 2.2.4 and 3.2, the Technical Capacity and Net
Worth of their respective Associates would also be eligible hereunder. For
purposes hereof, Associate means, in relation to the Applicant/ Consortium
Member, a person who controls, is controlled by, or is under the common control
with such Applicant/ Consortium Member (the “Associate”). As used in this
definition, the expression “control” means, with respect to a person which is a
company or corporation, the ownership, directly or indirectly, of more than 50%
(fifty per cent) of the voting shares of such person, and with respect to a
person which is not a company or corporation, the power to direct the
management and policies of such person, whether by operation of law or by
contract or otherwise.”
Clause 2.2.10 (ii) of the 2008 Madhepura RFQ
provides:
“information
supplied by an Applicant (or other constituent Member if the Applicant is a
Consortium) must apply to the Applicant, Member or Associate named in the
Application and not, unless specifically requested, to other associated
companies or firms. Invitation to submit Bids will be issued only to Applicants
whose identity and/ or constitution is identical to that at pre-qualification”.
168.
A comparison of the
relevant paragraphs from the three RFQs - the 2008 Madhepura RFQ, the 2010
Madhepura RFQ, and the 2010 Marhowra RFQ exhibits a curious pattern of
tightening and dilution of language pertaining to the requirements imposed by
the above-discussed Government of India guidelines. The comparison exposes a
pattern of arbitrary modification of language from one RFQ to another. It is
submitted not only are these arbitrary modifications that cannot be justified,
but it cannot be a mere coincidence that the modifications introduced suited
General Electric’s requirements and strategy perfectly and enabled General
Electric to avoid making disclosures that it was unable or unwilling to even
though these disclosures were mandated by the applicable GOI guidelines. The
relevant disclosure requirements in the 2010 Marhowra RFQ were diluted at the
instance of General Electric and because of prohibited lobbying of Indian
Railways and Planning Commission officials by General Electric executives,
employees and agents and pursuant to corrupt dealings between Indian Railways
and Planning Commission officials and General Electric. These unjustifiable and
unlawful changes to the 2010 Marhowra RFQ language violate (i) the GOI
Guidelines for qualification
of Bidders seeking to acquire stakes in Public Sector Enterprises through the
process of disinvestment issued vide Office Memorandum No. 6/4/2001DDII dated
July 13, 2001; (ii) the GOI Guidelines issued by the Ministry of Finance (F.No.
24(1)/PF.II/07) titled ‘Guidelines for Pre-Qualification of Bidders for PPP
Projects’; and (iii) the Government of India endorsed and recommended model
RFQ.
169.
Copies of the Guidelines issued by the Ministry of Finance (F.No.
24(1)/PF.II/07) titled ‘Guidelines for Pre-Qualification of Bidders for PPP
Projects’ and the Government of India endorsed and recommended model RFQ have
been filed by the petitioner before this court.
Comparison of relevant paragraphs
setting out disclosure requirements in the 2008 Madhepura RFQ, the 2010
Madhepura RFQ, and the 2010 Marhowra RFQ
2008
Madhepura RFQ
|
2010
Madhepura RFQ
|
2010
Marhowra RFQ
|
Does
not have language “or
any of our/ their Associates”
Has language “nor have had any contract
terminated for breach on our part.”
|
Has language “or any of our/ their Associates”
Has
language “nor have had any contract terminated by any public authority
for breach on our part”
|
Does
not have language “or
any of our/ their Associates”
Has language “nor have had any contract
terminated for breach on our part”
|
Does not have language “or any of our/ their
Associates”
|
Has language “or any of our/ their Associates”
|
Does not have language “or any of our/ their
Associates”
|
Has language “we have not been charge-sheeted by
any agency of the Government or convicted by a Court of Law for any offence
committed by us or by any of our Associates”
|
Has
language “we/ any Member of the Consortium or any of our/ their Associates
have
not been charge-sheeted by any agency of the Government or convicted by a
Court of Law”
|
Has language “we have not been charge-sheeted by
any agency of the Government or convicted by a Court of Law for any offence
committed by us or by any of our Associates”
|
Has language “against us or against our
Associates or against our CEO or any of our Directors/ Managers/ employees”.
Does not have language “that affects our ability
to undertake / execute the Project.”
|
Has language “against us/ any Member of the
Consortium or against our/ their Associates or against our CEO or any of our
directors/ managers/ employees.”
Does not have language “that affects our ability
to undertake / execute the Project.”
|
Has language “against us or against our
Associates or against our CEO or any of our Directors/ Managers/ employees.”
Has language “that affects our ability to
undertake / execute the Project.”
|
Has
language “I/ We further certify that we are qualified to submit a Bid
in accordance with the guidelines for qualification of bidders seeking to
acquire stakes in Public Sector Enterprises through the process of
disinvestment issued by the GOI vide Department of Disinvestment OM No. 6/4/2001-DD-II
dated 13th July, 2001”
|
Has language “I/ We further certify that we are
qualified to submit a Bid in accordance with the guidelines for qualification
of bidders seeking to acquire stakes in Public Sector Enterprises through the
process of disinvestment issued by the GOI vide Department of Disinvestment
OM No. 6/4/2001-DD-II dated 13th July, 2001”
|
Has language “I/ We further certify that we are
not disqualified in terms of the additional criteria specified by the
Department of Disinvestment in their OM No. 6/4/2001DDII dated July 13, 2001”
|
Does not have language “or any of their
Associates”
Does not have language “that exceed 5% of the
contract value”
|
Has language “or any of their Associates”
Does not have language “that exceed 5% of the
contract value”
|
Does not have language “or any of their
Associates”
Has language “that exceed 5% of the contract
value”
|
Clause 2.2.10 (ii)
Has language “information supplied by an
Applicant (or other constituent Member if the Applicant is a Consortium) must
apply to the Applicant, Member or Associate named in the Application and not,
unless specifically requested, to other associated companies or firms”
|
Clause 2.2.10 (b)
Has language “information supplied by an
Applicant (or other constituent Member if the Applicant is a Consortium) must
apply to the Applicant, Member or Associate named in the Application and not,
unless specifically requested, to other associated companies or firms”
|
Clause 2.2.9 (ii)
Has language “information supplied by an
Applicant (or other constituent member if the Applicant is a Consortium) must
apply to the Applicant or constituent member named in the Application and
not, unless specifically requested, to other associated companies or firms.
|
170.
The comparison between
relevant corresponding paragraphs setting out the disclosure requirements in
the 2008 Madhepura RFQ, the 2010 Madhepura RFQ, and the 2010 Marhowra RFQ
therefore shows the following:
(a)
The disclosures under
paragraph 6 of Appendix 1 were not extended to Associates of the Bidder in the
2008 Madhepura RFQ. The 2010 Madhepura RFQ was tightened to extend these
disclosures to Associates of Bidders. Curiously, the 2010 Marhowra RFQ also did
not extend these disclosures to Associates of the Bidder.
The 2010 Marhowra RFQ therefore violated the GOI disclosure
guidelines.
(b)
Required disclosures
by Bidders about expulsion from projects/ contracts and about contract
terminations were diluted in the 2010 Madhepura RFQ by introduction of language
that is absent from the 2008 Madhepura RFQ and the 2010 Marhowra RFQ.
Additional language was introduced to the relevant provision in the 2010
Madhepura RFQ to limit these disclosures to adverse actions by public
authorities. Disclosures under the 2008 Madhepura RFQ and the 2010 Marhowra RFQ
were not limited in this manner.
The 2010 Madhepura RFQ therefore violated the GOI
disclosure guidelines.
(c)
Disclosures about
convictions, indictments and adverse orders passed by a regulatory authority
did not extend to Associates of the Bidder in the 2008 Madhepura RFQ. The 2010
Madhepura RFQ was tightened to extend these disclosures to Associates of Bidders.
Curiously, the 2010 Marhowra RFQ also did not extend these disclosures to
Associates of the Bidder.
The 2010 Marhowra RFQ therefore violated the GOI disclosure
guidelines.
(d)
Disclosures relating
to charge-sheeting in matters affecting the security and integrity of India
were limited to charge-sheeting of the Bidder in the 2008 Madhepura RFQ. The
2010 Madhepura RFQ was tightened to extend these disclosures to charge-sheeting
of the Bidders, consortium members, and Associates of the Bidder and of the consortium
members. Curiously, these disclosures under the 2010 Marhowra RFQ were limited
to charge-sheeting of the Bidder and did not extend to charge-sheeting of the
Associates of the Bidder and of the consortium members.
The 2010 Marhowra RFQ therefore violated the GOI disclosure
guidelines.
(e)
Disclosures about
pending investigations by a regulatory authority were limited to Bidders, their
Associates and to the CEO, Directors, Managers and employees of the Bidder in
the 2008 Madhepura RFQ. The 2010 Madhepura RFQ extended these disclosures to
consortium members and Associates of consortium Members. The 2010 Marhowra RFQ
not only does not extend the disclosure to consortium members and Associates of
consortium members, but goes even further in diluting this requirement so as to
render it completely meaningless, inoperative and nugatory. The 2010 Marhowra
RFQ inserts language that limits these disclosures to pending investigations of
regulatory authorities which in the subjective opinion of a Bidder affect its ability to
undertake / execute the Project.
The 2010 Marhowra RFQ therefore
violated the GOI disclosure guidelines.
(f)
Both the 2008 and the
2010 Madhepura RFQs contain a positive undertaking by the Bidders that they are
qualified to submit a bid in accordance with the Government of India
guidelines. The 2010 Marhowra RFQ however, does not require a positive
declaration/ certification that the Bidder is qualified under these guidelines.
Instead the 2010 Marhowra RFQ only requires a negative certification that the
Bidder is not disqualified in terms of the additional criteria specified by the Government of India
guidelines.
The 2010 Marhowra RFQ therefore
violated the GOI disclosure guidelines.
(g)
The requirement to
disclose material non-performance and contractual non-compliance in past
projects and recent contractual disputes, litigation and arbitration did not
extend to Associates of the Bidder in the 2008 Madhepura RFQ. The 2010
Madhepura RFQ was tightened to extend these disclosures to Associates of
Bidders. The 2010 Marhowra RFQ also did not extend these disclosures to
Associates of the Bidder. And once again the 2010 Marhowra RFQ goes much
further in diluting this disclosure requirement through new language that seeks to limit
these disclosures to those “that exceed 5% of the contract value”. This extra
language in paragraph 7 of Annex 1 to Appendix I the 2010 Marhowra RFQ does not
even make logical sense when read with the rest of this paragraph. The
disclosures mandated by this provision are about material non-performance and contractual non-compliance in past projects
and about recent contractual disputes, litigation and arbitration. It is not
made clear how the limit of 5% of the contract value applies to events
mentioned in this provision. It appears that this extra language was hurriedly
inserted into this provision and that the dilution of the disclosure
requirement was sought to be protected from scrutiny by not going for an
overall redrafting of this provision. A condition for disclosure was added that
could be subjectively interpreted by the Bidder to mean anything. This would
then protect a Bidder from a charge of non-responsiveness if subsequently any
questions were raised.
The 2010 Marhowra RFQ violated the GOI disclosure
guidelines.
(h)
Clause 2.2.10 in the
2008 Madhepura RFQ included general instructions for submitting an application
and it provided that information
supplied by an Applicant (or other constituent Member if the Applicant is a
Consortium) must apply to the Applicant, Member or Associate named in the
Application and not, unless specifically requested, to other associated
companies or firms. Thus disclosures were mandatory for Associates of the
Bidder named in the application. This was also the requirement in the
corresponding provision in the 2010 Madhepura RFQ. In the 2010 Marhowra RFQ
however, the corresponding provision states that information need only be
supplied for the Bidder and consortium members. Associates of the Bidder named
in the Application are not covered by this provision. The effect of this
omission in the 2010 Marhowra diesel locomotive factory RFQ is that this
provision could be interpreted to mean that the Bidder was not required to
disclose information for its Associates.
The 2010 Marhowra RFQ therefore
violated the GOI disclosure guidelines.
171. It is pointed out that paragraph
12 of Appendix I to the 2010 Marhowra RFQ states that pending investigations by
regulatory authorities are also required for Associates of the Bidder. However,
the introduction of the words “that affects our ability to undertake / execute
the Project” in paragraph 12 of the 2010 Marhowra RFQ renders the certification
requirement useless as any and every bidder could say (without resort to any
external objective standard) that a particular ongoing regulatory investigation
did not affect the ability of the bidder to execute the project. The
introduction of this subjective element which cannot be objectively verified by
the Indian Railways has reduced this important requirement (that was to be
mandatorily met by all bidders) to a nullity or a mere formal unverifiable and
therefore meaningless statement. It will also be of interest to see what the
corresponding language was in the 2008 Marhowra RFQ.
172. Clause (g) of the aforesaid GOI
disclosure guidelines at Appendix –IV of the 2010 Marhowra RFQ provides:
“The
bidders shall be required to provide with their EOI an undertaking to the
effect that no investigation by a regulatory authority is pending against them.
In case any investigation is pending against the concern or its sister concern
or against its CEO or any of its Directors/ Managers/ employees, full details
of such investigation including the name of the investigating agency, the
charge/ offence for which the investigation has been launched, name and
designation of persons against whom the investigation has been launched and
other relevant information should be disclosed, to the satisfaction of the
Government. For other criteria also, a similar undertaking shall be obtained
along with EOI.”
173. The RFQ is equivalent to the EOI
(Expression of Interest) referred to in the above Clause (g). However, the
language in paragraph 12 of the Letter comprising the Application for
Qualification (Appendix-I) in the 2010 Marhowra RFQ does not meet the mandatory
requirement of the above-quoted Clause (g) of the Government of India’s
guidelines dated July 13, 2001. It is relevant to ask when and how was this
change introduced into the language of Clause 12 of the Marhowra 2010 RFQ. This
change obviously benefits General Electric because it enabled General Electric
to avoid disclosing pending investigations by a regulatory authority against
General Electric Company.
174. The above discrepancies and differences in three different
RFQs, all three issued by the Ministry of Railways and all expressly made
subject to compliance with the Government of India ‘Guidelines for qualification of
Bidders seeking to acquire stakes in Public Sector Enterprises through the
process of disinvestment’ (the GOI disclosure guidelines), cannot be justified.
These give rise to a reasonable and strong apprehension that some Bidders like
General Electric were being favoured and that the RFQ terms were crafted and
modified by corrupt Planning Commission and Indian Railways officials to help
General Electric in qualifying without making the required mandatory
disclosures.
175. Guidelines were issued by the
Ministry of Finance (F.No. 24(1)/PF.II/07) titled ‘Guidelines for
Pre-Qualification of Bidders for PPP Projects’. These guidelines along-with an
enclosed Government of India endorsed model RFQ were forwarded by the Ministry
of Finance to several Government of India departments including to the Chairman
of the Railway Board on December 5, 2007. The corresponding certification and
disclosure clauses recommended in the GOI model RFQ also establish that the
certification/ disclosure provisions of the 2010 Marhowra RFQ were diluted to
benefit General Electric so as to enable it to qualify without making the
disclosures required by the GOI disclosure guidelines that were expressly made
applicable to the tender.
176. General Electric has clearly benefited from and taken
advantage of the diluted disclosure requirements under the 2010 Marhowra RFQ.
177. In contrast, General Electric was unable to comply with the
more stringent disclosure requirements in the 2010 Madhepura RFQ. Therefore, in
its technical bid for the 2010 Madhepura RFQ submitted on May 17, 2012 prepared
while the petitioner was working for General Electric, General Electric limited
its disclosures only to those disclosures ordinarily made by General Electric
under US securities laws to the United States Securities and Exchange
Commission (the SEC). General Electric has therefore not complied with the
disclosure/ certification requirements in the 2010 Madhepura RFQ. General
Electric’s short-listing/ qualification for the 2010 Madhepura tender was in
violation of the RFQ and the Government of India disclosure guidelines dated
July 13, 2001 and was therefore liable to be set aside.
178. General Electric has also not complied with the Government
of India disclosure guidelines dated July 13, 2001 in its technical bid for the
2010 Marhowra RFQ. General Electric has made no disclosures about the real
bidder, General Electric Company, which provides the requisite net-worth,
technical experience, technology, and intellectual property rights for General
Electric’s bid that has been submitted using a shell company (GE Global
Sourcing India Private Limited), a wholly-owned subsidiary that had zero
experience of public contracts or manufacturing.
179. In addition, the
dilution of the disclosure/ certification requirements in the 2010 Marhowra RFQ
in violation of the Government of India guidelines dated July 13, 2001 rendered
Global RFQ No.
2010/ME(Proj)/4/ Marhoura / the invitation to bid issued by the Ministry of
Railways unlawful, arbitrary, bad in law and liable to be quashed.
180. Another important question that
arises before this court is why were the disclosure/ certification requirements
tightened/ strengthened in the 2010 Madhepura RFQ over the 2008 Madhepura RFQ?
Was an objection raised within the Government that the 2008 Madhepura RFQ did
not comply with the Government of India guidelines dated July 13, 2001? This
would certainly appear to be the case for the changes made in the 2010
Madhepura RFQ. The question remains why similar changes were not introduced in
the 2010 Marhowra RFQ, which also does not comply with the GOI disclosure
guidelines dated July 13, 2001.
181. As stated above, General Electric was unable/ unwilling to
comply with the more stringent disclosure requirements under the 2010 Madhepura
RFQ and was unable/ unwilling to provide the clear certifications as required
by paragraphs 6, 11 and 13 of Appendix I of that RFQ.
182. Soon after the petitioner started work at General Electric
on April 23, 2010, she was informed that General Electric was unable to provide
the clear certifications as required under the Madhepura RFQ application due on
May 17, 2010. The petitioner was informed that General Electric would provide
conditional/ limited certifications and would only disclose those adverse
events that it was liable to disclose to the SEC under United States law in routine
filings. Accordingly General Electric made modifications to the relevant
provisions in Appendix I stating that the disclosures were limited to those
ordinarily made to the SEC. The application for qualification/ technical bid
submitted by General Electric for the 2010 Madhepura RFQ on May 17, 2010
therefore contained a modified appendix I and was liable to be treated as
non-responsive because the required disclosures have not been made. General
Electric had therefore not made the full disclosures required by the 2010
Madhepura RFQ. Even internally within GE, these modifications to the language
of appendix I were viewed as risky. Despite this failure to comply with the
disclosure requirements under the RFQ and the GOI disclosure guidelines,
General Electric was qualified/ short-listed by the Railways Ministry for the
2010 Madhepura tender. The fact is that General Electric was unable/ unwilling
to provide the certifications required under the 2010 Madhepura RFQ and the GOI
guidelines dated July 13, 2001. General Electric’s RFQ application for the 2010
Madhepura tender was therefore non-responsive and also in violation of the
aforesaid GOI guidelines dated July 13, 2001. General Electric should not have
been prequalified for this tender by respondent 4. This is yet another reason
why General Electric’s bid for this tender (the 2010 Madhepura tender) was
liable to be rejected.
183. The reason General Electric was unable/ unwilling to
provide the certifications required by the 2010 Madhepura RFQ is because
paragraphs 6, 11, 12 and 13 of Appendix I to the RFQ requires disclosures for
the Bidder’s Associate. The bidder is as pointed out, a shell company, GE
Global Sourcing India Private Limited (respondent 7). Its Associate for the bid
is General Electric Company (respondent 1). General Electric was unable/
unwilling to provide the certifications and disclosures required by the 2010
Madhepura RFQ under paragraphs 6, 11, 12 and 13 of Appendix I for General
Electric Company. In its letter comprising the application for Qualification
submitted for the Madhepura electric locomotive factory tender on May 17, 2010,
General Electric has added the words “subject to” before paragraphs 11 and 13
and then provided an explanation that the disclosures were limited to matters
required to be disclosed by General Electric under SEC guidelines. Disclosures
under SEC guidelines and US
securities law are essentially limited to disputes having a substantial
financial impact upon the company. In the case of General Electric Company, the
actual numbers that would have a significant financial impact work out to be
quite high. Also, matters/ disputes considered normal and routine in the course
of business do not require disclosure to the SEC unless they create a
significant potential financial liability. The disclosures required by the GOI Guidelines for qualification of
Bidders seeking to acquire stakes in Public Sector Enterprises through the
process of disinvestment’ and by the GOI recommended model RFQ are more
stringent because they meet a different
standard and serve a different purpose. Therefore GE Global Sourcing India Private
Limited had not complied with the 2010 Madhepura RFQ requirement to provide
clear certifications or make the required disclosures. GE Global Sourcing India
Private Limited had also failed to comply with the requirements of the
Government of India ‘Guidelines
for qualification of Bidders seeking to acquire stakes in Public Sector
Enterprises through the process of disinvestment’. General Electric’s technical
bid for the 2010 tender for the proposed electric locomotive factory at
Madhepura was therefore non-responsive and non-compliant.
184. General Electric could have made appropriate disclosures as
part of its technical bid for the Madhepura tender in 2010, but did not. There
are three possible reasons why General Electric did not make the required disclosures.
First, the petitioner was told by Ms Tara Plimpton and Mr James Winget (both
in-house lawyers for GE Transportation at the relevant time) that it was not
possible for General Electric to compile the information required for these
disclosures from its businesses spread all over the world. Second, the
petitioner also learnt that General Electric had been disqualified/ blacklisted
for a tender in a South American country, probably Brazil . It is possible that General
Electric did not want to make disclosures that could be relied upon by the
Railway Ministry to disqualify its bid. The third reason was that General
Electric had made no disclosures in its 2008/2009 technical bid for the
Marhowra tender and therefore any disclosures made by General Electric for the
Madhepura 2010 tender would have raised red flags in the Ministry of Railways
as to why these were not disclosed in 2009. The petitioner came across this
reason in an email written by Mr. Pratyush Kumar to General Electric executives
in GE Transportation’s US
headquarters.
185. As submitted, the 2010 RFQ for
the proposed Marhowra diesel locomotive factory also did not comply with the
GOI ‘Guidelines for qualification of Bidders seeking to acquire stakes in
Public Sector Enterprises through the process of disinvestment’. The
disclosure/ certification requirements prescribed in this RFQ were a diluted
version of the disclosure/ certification requirements prescribed by the GOI
disclosure guidelines. This dilution was clearly intended to benefit General Electric.
The 2010 Marhowra RFQ was ultra vires and violative of the GOI disclosure
guidelines as it omitted disclosures/ certifications for “Associates” of the
Bidder. As a result, General Electric avoided making disclosures for General
Electric Company (respondent 1) and the de-facto bidder by using a shell
company, GE Global Sourcing India Private Limited as the applicant. GE Global
Sourcing India Private Limited being a shell company, and having never
manufactured or supplied locomotives or any other product for that matter, had a
clean slate and therefore made no disclosures in its technical bid for the 2010
Marhowra RFQ submitted on July 12, 2010.
This failure by General Electric to make disclosures about the de-facto
and real Bidder (General Electric Company/ respondent 1) violated the GOI
disclosure guidelines (Guidelines for qualification of Bidders seeking to
acquire stakes in Public Sector Enterprises through the process of
disinvestment).
186. The Global RFQ No.
2010/ME(Proj)/4/Marhoura/RFQ prepared by the Ministry of Railways, Government
of India in March 2010 also violated the GOI ‘Guidelines for qualification of
Bidders seeking to acquire stakes in Public Sector Enterprises through the
process of disinvestment’. The modifications made to this RFQ by Respondent 4
to dilute the disclosure requirements and to thereby benefit General Electric were
unjustifiable, illegal and ultra-vires.
Global RFQ No. 2010/ME(Proj)/4/Marhoura/RFQ was therefore liable to be
scrapped.
187. For the reasons set out above,
the 2010 Marhowra RFQ and the 2010 Madhepura RFQ were in violation of the
Government of India Guidelines dated July 13, 2001 and also in violation of the
Ministry of Finance Guidelines for Pre-qualification of Bidders for PPP
Projects dated December 5, 2007 and with office memorandum No. F.No.
24(1)/PF.II/07 and were therefore illegal, ultravires and liable to be quashed/
scrapped.
188. GE Global Sourcing India Private Limited (respondent 7),
the applicant in the 2010 Madhepura electric locomotive factory tender, the
2010 Marhowra diesel locomotive factory tender, and the 2010 Dankuni tender is
a shell company that has been fronted as the Applicant by General Electric
Company to avoid providing the certifications required by the Government of
India Disinvestment Guidelines (No. 6/4/2001DDII) dated July 13, 2001. GE
Global Sourcing India Private Limited changed its registered office address in
late July 2010 to AIFACS Building, 1 Rafi Marg, New Delhi 110001 India. Prior
to that, the registered office of GE Global Sourcing India Private Limited was
a Mumbai address and the address was “care of” the office address of another
company which was a non-GE entity. Thus the technical bids submitted by GE
Global Sourcing India Private Limited on May 17, 2010 and on July 2010 contained
the registered office address which began with “C/o” followed by another
company’s name which was not a GE company.
189. The petitioner pointed out to Mr. Pratyush Kumar, Mr,
Deepak Adlakha and other members of the GE Transportation team in India
in the week commencing May 10, 2010 that it was inappropriate for GE Global
Sourcing India Private Limited to use another company’s office as its
registered office, especially when this entity was bidding for multi-billion
dollar railway tenders. After the petitioner pointed this out, steps were taken
to change the registered office for GE Global Sourcing India Private Limited
and the change was finally approved in late July 2010. There are internal GE
emails dating July 2010 exchanged between the petitioner and General Electric
executives (including Mr. K R Radhakrishnan, the company secretary for GE India
Industrial Private Limited) on the necessity to notify the change in the
registered office of the Applicant to the Ministry of Railways as required by
the RFQs for the three 2010 tenders (i.e., the Madhepura, Marhowra and Dankuni
tenders).
190. That GE Global Sourcing India Private Limited was a shell
company, at least in 2010, is also evident from its memorandum of association,
its object clause and the description of its business activities. These came to
the attention of the petitioner when she was reviewing the technical bid
documents for GE’s bid for the Marhowra diesel locomotive factory tender in
late June and early July 2010. Annex I to the Letter comprising the application
for qualification submitted by GE contained “Details of Applicant”. Paragraph 2
of Annex I asks for a “Brief description of the Company including details of its main lines of
business and proposed role and responsibilities in this Project.” The
petitioner recalls that the business of GE Global Sourcing India Private
Limited was described in paragraph 2 of Annex I as surveying catalogues on the
internet or something similar. The petitioner pointed out to Mr. Ashfaq Nainar
that the business description for the Applicant (GE Global Sourcing India
Private Limited) showed that it was a shell company. Mr. Ashfaq Nainar agreed
that that the Applicant was a shell company but stated that nothing could be
done about this.
191. The petitioner also recalls a
conversation in late June 2010, with Ms. Himali Arora, the then CFO for GE
Transportation in India, and Mr. Ashish Malhotra, a General Electric executive
working on the locomotive tenders, during which Ms. Himali Arora admitted that
GE Global Sourcing India Private Limited’s funds being limited could not be
disclosed, and that buying the tender documents (the RFPs) for these locomotive
tenders had depleted the funds in its bank balance.
192. The reason why General Electric
has used a shell company to front as the applicant for these locomotive tenders
is because neither respondent 1 (General Electric Co.), nor respondent 6 (GE
India Industrial Private Limited) were willing/ able to provide the
certifications required by the RFQs to comply with the Government of India
Guidelines for qualification of Bidders seeking to acquire stakes in Public
Sector Enterprises through the process of disinvestment bearing Office
Memorandum No. 6/4/2001DDII and dated July 13, 2001. In failing to provide the mandated/ required disclosures
and certifications in its technical bids for the 2010 RFQ for the electric
locomotive factory and the 2010 RFQ for the diesel locomotive factory, and by
using a shell company as the Bidder for this purpose, GE engaged in “fraudulent practices” as defined
by Clause 4.3 (b) and Clause 4.1.3 b) of these RFQs respectively. Both these
clauses define a fraudulent practice thus: “fraudulent practice” means a
misrepresentation or omission of facts or suppression of facts or disclosure of
incomplete facts, in order to influence the Bidding Process”.
193. The affidavit filed by the Railway Ministry on 14 January
2013 confirms that General Electric failed to make the mandatory disclosures in
its technical bids for the 2010 ELF and DLF RFQs and that this was enabled by
tailoring the RFQ language (with the help of corrupt Railway Ministry and
Planning Commission officials) and by fraudulently using a shell company to
front as the bidding entity and by modifying the language of the disclosure
clauses in the technical bids.
Issue of tailored
eligibility criteria for ELF 2010 and 2013 tenders
194.
The eligibility criteria prescribed in the 2010
RFQ for the electric locomotive factory at Madhepura was tailored/ crafted to
specifically permit General Electric to participate in this tender even though
General Electric does not manufacture electric locomotives.
195.
The reply affidavit filed by the Railway
Ministry on 14 January 2013 seeks to mislead the court about the government’s
reasons for diluting the eligibility criteria for ELF in 2010. This affidavit
also misleads the court that companies which manufacture only diesel
locomotives are somehow also eligible to set up a factory to manufacture
electric locomotives.
196.
The new RFQs issued on 6 May 2013 continue to
perpetuate these illegalities and this corruption.
197.
Paragraph 27 of Civil
Writ Petition 1280 of 2012 states:
“The Electric Locomotive Tender is for setting up a factory
to manufacture electric locomotives in Madhepura in Bihar .
General Electric does not manufacture electric locomotives, yet the
prequalification criteria and technical specifications in the 2010 RFQ for this
tender have been deliberately tailored to allow GE to pre-qualify for this
tender. A comparison of clauses 2.2.2A, 3.2.1 and 3.2.4 in RFQ No. 2010/ Elect.
(Dev0 440/1(1) with those in the 2008 RFQ will provide evidence that the 2010
RFQ for the Electric Locomotive Tender was tailored to allow GE to bid. GE was
ineligible under the 2008 RFQ for Electric Locomotives.”
198.
A tender for the same project
(electric locomotive factory at Madhepura) was floated in 2008-2009. Under the
terms of the 2008 RFQ, GE was ineligible for this Project and consequently it
did not participate in the 2008/ 2009 tender. Technical bids were submitted by
five companies in 2008 for this Project. These were Alstom (France), Bombardier
(Germany ), Siemens (Germany ), a consortium comprising China-based
CSR Zhuzhou Electric Loco Works and Monnet International, and a Japanese
consortium comprising Mitsubishi, Kawasaki
and Toshiba. The Ministry of Railways short listed three bidders in 2008 –
Alstom, Bombardier and Siemens. The 2008/2009 tender was eventually cancelled
in February 2009.
199.
A new tender for the
same project (electric locomotive factory at Madhepura) was floated in 2010.
The eligibility criteria was modified/ diluted from that prescribed in the 2008
RFQ and the requirement for previous experience in manufacture/ supply/
maintenance of electric locomotives that was present in the 2008 RFQ was left
out in 2010. These changes/ dilutions benefited only one party, General
Electric and allowed General Electric to participate in this tender even though
it does not manufacture electric locomotives or even possess the technology to
manufacture electric locomotives. At the same time, new conditions were
inserted in the 2010 Madhepura RFQ aimed at disqualifying the Chinese and
Japanese competition.
200.
Therefore in 2010,
General Electric was rendered eligible to participate in the Madhepura tender
even though it does not manufacture electric locomotives. Four bidders
(Siemens, Alstom, Bombardier and General Electric) submitted technical bids for
the 2010 Madhepura tender on May 17, 2010. All four were shortlisted for stage
2 of the Bid – the financial bid.
201.
The following changes
were made to the eligibility conditions in the 2010 Madhepura RFQ with the
intent to render General Electric eligible:
(a)
deletion of the
requirement that the bidder should have manufacturing experience of electric
locomotives;
(b)
deletion of the
requirement that the bidder have capability to manufacture electric locomotives
with 1000HP per axle and experience of supply (sales) of such locomotives; and
(c)
deletion of the
requirement that the bidder have maintenance experience for electric
locomotives.
201.
General Electric does
not manufacture electric locomotives and does not possess the technology to
manufacture electric locomotives. A McKinsey document titled “20100522_Working
session_V04.ppt” and dated May 22, 2010 that has been filed by the Petitioner
alongwith her affidavit dated July 9, 2012 establishes that General Electric
does not possess the technology, the expertise and the experience to
manufacture electric locomotives.
202.
The following changes were
made to the eligibility conditions in the 2010 Madhepura RFQ with the intent to
render the Japanese and Chinese competition and other possible bidders (being
manufacturers of electric locomotives using third party technology, even if
under valid licence) ineligible:
i.
introduction of the
requirement that the bidder should have designed an IGBT based propulsion
system; and
ii.
prohibition of the use
of third party technology even under valid licence.
203.
The changes introduced
into the eligibility criteria for the Madhepura project in the 2010 RFQ resulted
in the anomalous situation where experienced manufacturers of electric
locomotives with licensed technology were barred from participation in the
tender; whereas General Electric which does not manufacture electric
locomotives, has no recent experience or expertise in the manufacture of such
locomotives, and does not possess the technology (whether self-developed or
licensed) to manufacture electric locomotives, was not only been rendered
eligible under the tailored eligibility criteria in the 2010 Madhepura RFQ but was
also short-listed. The Chinese and Japanese consortia who bid for this project
in 2008 were outright disqualified. The cumulative effect of the modifications
to the eligibility conditions introduced into the 2010 Madhepura RFQ was that
only General Electric, Siemens, Alstom and Bombardier were able to meet these
conditions. No existing Indian manufacturer (for example BHEL) was eligible.
204.
The tailoring of
eligibility criteria in the 2010 Madhepura RFQ aimed at allowing General
Electric to submit a bid even though General Electric does not manufacture
electric locomotives, is very similar to what happened in Pakistan tenders for purchase of
locomotives between 2009 to the present. Very similar allegations of
tailor-made tenders and corruption were made to Pakistani authorities by other
locomotive manufacturers against General Electric and corrupt Pakistan Railways
officials. These complaints were accepted by the Lahore High Court and by the
Pakistan Supreme Court. The tainted tenders were scrapped and the Pakistan
courts have directed Pakistan Railways to re-tender the procurement of
locomotives in a transparent manner and through international competitive
bidding wherein all international locomotive manufacturers will be invited to
make offers for supply of locomotives. I point out that Mr. Ashfaq Nainar from
General Electric (who the petitioner worked with during her time at General
Electric) was the main sales executive from General Electric pursuing both the
Pakistani and the Indian tenders.
205.
For the convenience of
the court, the petitioner reproduces below the relevant clauses on eligibility
criteria from the 2008 and 2010 Madhepura RFQs:
Clause 2.2.1 (e) of the 2008 Madhepura RFQ
provided:
“The Applicant, in case of a single entity, shall be a manufacturer
of IGBT based Propulsion System and Mechanical System of Electric
Locomotives/High Speed Train Sets, or in the case of a Consortium, the Lead
Member, shall either be a manufacturer of IGBT based Propulsion System or of
Mechanical System of Electric Locomotives/High Speed Train Set and other member
shall be a manufacturer of the other system.”
Clause 2.2.1 (f) of the 2008 Madhepura RFQ
provided:
“The Applicant should have the capability of producing
electric locomotives with at least 1, 000 (one thousand) horsepower per axle
and shall have supplied at least 10 (ten) such electric locomotives during the
past 3 (three) years.”
Clause 2.2.2 (A) of the 2008 Madhepura RFQ prescribed the
Technical Capacity eligibility criteria:
“Technical Capacity: For demonstrating technical capacity
and experience (the “Technical Capacity”), the Applicant shall, over the past 5
(five) financial years preceding the Application Due Date, have:
(i) designed, manufactured and supplied Electric
Locomotives comprising Eligible Projects; and/ or
(ii) designed, manufactured and supplied High Speed Train
Sets comprising Eligible Projects.
such that the sum total of the horse power of the above
supplies exceeds 1,800,000 (one million eight hundred thousand) horse power
(the “Threshold Technical Capability”)”
Clause 2.2.3 of the 2008 Madhepura RFQ provided the
maintenance experience required for prequalification:
“Maintenance Experience: The Applicant should have
maintained 50 (fifty) or more mainline Electric Locomotives of 4,000 (four
thousand) or higher horse power / High Speed Train Sets , by way of
comprehensive maintenance contract(s), including supply of material and labour,
for a duration of five years or more. In the absence of such experience, the
Applicant shall undertake to enter into a maintenance agreement with an entity
having equivalent experience, failing which the Agreement shall be liable to
termination.”
Clauses 3.2 and 3.3 of the 2008 RFQ are also relevant and
are set out below:
“3.2 Technical Capacity for purposes of
evaluation
3.2.1 Subject to the provisions of Clause 2.2, the
following categories of experience would qualify as Technical Capacity and
eligible experience (the "Eligible Experience") in relation to
eligible projects as stipulated in Clauses 3.2.3 and 3.2.4 (the "Eligible
Projects"):
Category 1: Production and supply of 5 (five) Electric
Locomotives of at least 6,000 (six thousand) horse power each, employing proven
IGBT technology, to a single purchaser.
Category 2: Production and supply of 2 (two) High Speed
Train Sets of at least 6,000 (six thousand) horse power each, employing proven
IGBT technology, to a single purchaser.
Category 3: Production and supply of 5 (five) Electric
Locomotives of at least 4,000 (four thousand) horse power each, employing
proven IGBT technology, to a single purchaser.
Category 4: Production and supply of 2 (two) High Speed
Train Sets of at least 4,000 (four thousand) horse power each, employing proven
IGBT technology, to a single purchaser.
3.2.2 Eligible Experience in respect of each category shall
be measured only for Eligible Projects.
3.2.3 For a project to qualify as an Eligible Project under
Categories 1, 2, 3 and 4, the entity claiming experience should have held, in
the company supplying the Electric Locomotives / High Speed Train sets
comprising the Eligible Project, a minimum of 26% equity during the period for
which Eligible Experience is being claimed.
3.2.4 For qualification, the Applicant shall provide
details of 2 (two) or more Eligible Projects comprising of Electric
Locomotives, delivering 1,000 (one thousand) horse power or more per axle.
3.2.5 The Applicant shall quote experience in respect of a
particular Eligible Project under any one category only, even though the
Applicant (either individually or along with a member of the Consortium) may
have played multiple roles in the cited project. Double counting for a
particular Eligible Project shall not be permitted in any form.
3.2.6 Applicant’s experience shall be measured and stated
in terms of a score (the "Experience Score"). The Experience Score
for a given category would be one point for each Electric Locomotive or High
Speed Train Sets included in an Eligible Project and then multiplied by the
applicable factor in Table 3.2.6 below. In case the Applicant has experience
across different categories, the score for each category would be computed as
above and then aggregated to arrive at his Experience Score.
Table 3.2.6: Factors for Experience across
categories
Factor
|
|
Category
1
|
1.00
|
Category
2
|
1.00
|
Category
3
|
0.50
|
Category
4
|
0.50
|
3.2.7 Experience for any activity relating to an Eligible
Project shall not be claimed by two or more Members of the Consortium. In other
words, no double counting by a Consortium in respect of the same experience shall
be permitted in any manner whatsoever.
3.3 Details of Experience
3.3.1 The Applicant should furnish the details of Eligible
Experience for the past 5 (five) years preceding the Application Due date.
3.3.2 The Applicants must provide the necessary information
relating to Technical Capacity as per format at Annex-II of Appendix-I.
3.3.3 The Applicant should furnish the required
Project-specific information and evidence in support of its claim of Technical
Capacity, as per format at Annex-IV of Appendix-I.”
206.
As stated earlier,
General Electric was therefore ineligible to participate in the 2008 Madhepura
RFQ.
207.
In the 2010 Madhepura RFQ, Clause 2.2.1 (e) was
modified to read as under:
“The Lead
Member of the Consortium or the single entity Applicant, as the case may be,
(including its Associates) shall have designed an IGBT based Propulsion System
of railway locomotives/ High Speed Train Sets of 4,000 horsepower or more and
manufactured the same comprising Eligible Projects. An Applicant who has
procured the design from a third party (not being an Associate) shall not be
eligible hereunder. In the event that an Applicant has developed its own
technology, following the acquisition of technology from a third party it shall
certify that the proposed technology is its own property and does not infringe
on the intellectual property rights of a third party: Provided, however, that
if such technology was acquired from a third party within a period of 10 (ten)
years prior to the Application Due Date, the Applicant shall also furnish a
certificate from such third party that it has no intellectual property rights
or claims on such technology.”
208.
In the 2010 Madhepura RFQ, Clause 2.2.1 (f) was
modified to read as under:
“The
Applicant (including its Associates) shall have executed at least one Eligible
Project each in 3 (three) countries.”
In the 2010
Madhepura RFQ, Clause 2.2.2 (A) prescribing the Technical Capacity eligibility
criteria was modified to read as under:
“Technical
Capacity: For demonstrating technical capacity and experience (the “Technical
Capacity”), the Applicant shall, over the past 5 (five) financial years
preceding the Application Due Date, have:
(i) designed and produced
the railway locomotives, including their Propulsion Systems, for supply comprising
Eligible Projects; and/ or
(ii) designed and produced
the High Speed Train Sets, including their Propulsion Systems, for supply
comprising Eligible Projects.
such that the
total horse power of the above supplies exceeds 1,800,000 (one million and
eight hundred thousand) horse power (the “Threshold Technical Capacity”).
Provided that
at least one third of the Threshold Technical Capacity shall be from Eligible
Projects which were supplied at least 2 (two) years prior to the Application
Due Date.
Provided
further that the Threshold Technical Capacity shall include at-least 10 (ten)
railway locomotives from Eligible Projects in Category 1 specified in Clause
3.2.1.
For the avoidance of doubt, in case of Eligible Projects
where part supplies of railway locomotives/High Speed Train Sets were made
prior to the aforesaid period of 5 (five) financial years preceding the
Application Due Date and balance supplies were made in the aforesaid period,
only those railway locomotives/High Speed Train Sets which were supplied in the
aforesaid period of 5 (five) financial years preceding the Application Due Date
shall be considered for computation of Eligible Projects hereunder.”
209.
Clauses 3.2 and 3.3 of
the 2010 Madhepura RFQ are also relevant and are set out below:
“Technical Capacity for purposes of evaluation
3.2.1 Subject
to the provisions of Clause 2.2, the following categories of experience would
qualify as Technical Capacity and eligible experience (the "Eligible
Experience") in relation to eligible projects as stipulated in Clauses
3.2.3 and 3.2.4 (the "Eligible Projects"):
Category 1:
Supply of 5 (five) railway locomotives of at least 6,000 (six thousand) horse
power each, employing IGBT technology, to a single purchaser.
Category 2:
Supply of 2 (two) High Speed Train Sets of at least 6,000 (six thousand) horse
power each, employing IGBT technology, to a single purchaser.
Category 3:
Supply of 5 (five) railway locomotives of at least 4,000 (four thousand) horse
power each, employing IGBT technology, to a single purchaser.
Category 4:
Supply of 2 (two) High Speed Train Sets of at least 4,000 (four thousand) horse
power each, employing IGBT technology, to a single purchaser.
3.2.2
Eligible Experience in respect of each category shall be measured only for Eligible
Projects.
3.2.3 For a
project to qualify as an Eligible Project under Categories 1, 2, 3 and 4, the
entity claiming experience should have held, in the company supplying the
railway locomotives / High Speed Train Sets comprising the Eligible Project, a
minimum of 26% (twenty six per cent) equity during the period for which
Eligible Experience is being claimed.
3.2.4 For a
project to qualify as an Eligible Project under Categories 1, 2, 3 and 4, the
Applicant should have produced the railway locomotives/High Speed Train Sets,
including their Propulsion System, based on a design developed by itself
(including an Associate) and not procured from a third party, as stipulated in
Clause 2.2.1 (e).
3.2.5 The
Applicant shall quote experience in respect of a particular Eligible Project
under any one category only, even though the Applicant (either individually or
along with a member of the Consortium) may have played multiple roles in the
cited project. Double counting for a particular Eligible Project shall not be
permitted in any form.
3.2.6 An
Applicant’s experience shall be measured and stated in terms of a score (the
"Experience Score"). The Experience Score shall be computed as one
point for each railway locomotive or High Speed Train Set included in an
Eligible Project and then multiplied by the applicable factor in Table 3.2.6
below. In case the Applicant has experience across different categories, the
score for each category would be computed as above and then aggregated to
arrive at its Experience Score.
Table 3.2.6:
Factors for Experience across categories Categories
Factor
|
|
Category 1
|
1.25
|
Category 2
|
1.00
|
Category 3
|
0.75
|
Category 4
|
0.50
|
3.2.7
Experience for any activity relating to an Eligible Project shall not be
claimed by two or more Members of the Consortium. In other words, no double
counting by a Consortium in respect of the same experience shall be permitted
in any manner whatsoever.
3.3 Details of Experience
3.3.1 The
Applicant should furnish the details of Eligible Experience for the last 5
(five) financial years immediately preceding the Application Due Date.
3.3.2 The
Applicants must provide the necessary information relating to Technical
Capacity as per format at Annex-II of Appendix-I.
3.3.3 The
Applicant should furnish the required Project-specific information and evidence
in support of its claim of Technical Capacity, as per format at Annex – IV of
Appendix-I.”
Issue
of definition of Corrupt Practice in Bid Documents
210.
As a result of its
influence in the electric division of the Railway Board, General Electric
managed to have the relevant clauses (dealing with the definition of a corrupt
practice) in the 2010 RFQ for the proposed electric locomotive factory at
Madhepura diluted. Copies of both the
2008 RFQ for the proposed electric locomotive factory at Madhepura and the 2010
RFQ for the proposed electric locomotive factory at Madhepura have been filed
by the Petitioner. A comparison of the relevant clauses in the 2008 Madhepura
RFQ and the 2010 Madhepura RFQ can be seen in the chart below.
Chart comparing relevant clauses in the Madhepura RFQs for
2008 and 2010
Clause
|
Madhepura
2008 RFQ
|
Madhepura
2010 RFQ
|
2.2.1
(d)
|
An
Applicant shall be liable for disqualification if any legal, financial or technical
adviser of the Authority in relation to the Project is engaged by the
Applicant
in any manner for matters related to or incidental to the Project.
|
An
Applicant shall be liable for disqualification if any legal, financial or
technical adviser of the Authority in relation to the Project is engaged by
the Applicant, its Member or any Associate thereof, as the case may be, in
any manner for matters related to or incidental to the Project. For the
avoidance of doubt, this disqualification shall not apply where such adviser
was engaged by the Applicant, its Member or Associate in the past but its
assignment expired or was terminated 6 (six) months prior to the date of
issue of this RFQ. Nor will this disqualification apply where such adviser is
engaged after a period of 3 (three) years from the date of commercial
operation of the Project.
Explanation:
In case an Applicant is a Consortium, then the term Applicant as used in this
Clause 2.2.1, shall include each Member of such Consortium.
|
4.3
(a)
|
“corrupt
practice” means (i) the offering, giving, receiving, or soliciting, directly
or indirectly, of anything of value to influence the actions of any person
connected with the Bidding Process (for avoidance of doubt, offering of
employment to or employing or engaging in any manner whatsoever, directly or
indirectly, any official of the Authority who is or has been associated in
any manner, directly or indirectly with the Bidding Process or the LOA or has
dealt with matters concerning the Agreement or arising therefrom, before or
after the execution thereof, at any time prior to the expiry of one year from
the date such official resigns or retires from or otherwise ceases to be in
the service of the Authority, shall be deemed to constitute influencing the
actions of a person connected with the Bidding Process); or (ii) engaging in
any manner whatsoever, whether during the Bidding Process or after the issue
of the LOA or after the execution of the Agreement, as the case may be, any
person in respect of any matter relating to the Project or the LOA or the
Agreement, who at any time has been or is a legal, financial or technical
adviser of the Authority in relation to any matter concerning the Project;
|
“corrupt
practice” means (i) the offering, giving, receiving, or soliciting, directly
or indirectly, of anything of value to influence the actions of any person
connected with the Bidding Process (for avoidance of doubt, offering of
employment to, or employing, or engaging in any manner whatsoever, directly
or indirectly, any official of the Authority who is or has been associated in
any manner, directly or indirectly, with the Bidding Process or the LOA or
has dealt with matters concerning the Agreement or arising therefrom, before
or after the execution thereof, at any time prior to the expiry of one year
from the date such official resigns or retires from or otherwise ceases to be
in the service of the Authority, shall be deemed to constitute influencing
the actions of a person connected with the Bidding Process); or (ii) save and
except as permitted under sub clause (d) of Clause 2.2.1, engaging in any
manner whatsoever, whether during the Bidding Process or after the issue of
the LOA or after the execution of the Agreement, as the case may be, any
person in respect of any matter relating to the Project or the LOA or the
Agreement, who at any time has been or is a legal, financial or technical
adviser of the Authority in relation to any matter concerning the Project;
|
211.
In 2008, Clauses 2.2.1
(d) and 4.3 (a) of the Madhepura RFQ were identical to Clauses 2.2.1 (d) and
4.1.3 (a) clauses in the 2010 Marhowra RFQ. In 2010, however, Clauses 2.2.1 (d)
and 4.3 (a) of the Madhepura RFQ were diluted to permit a bidder to engage an
adviser to the Indian Railways six months after the end of the adviser’s
engagement with the Indian Railways. This kind of diluted ban on engagement of
the advisers retained by the tendering Authority is very unusual and improper
and immediately raises a red flag of corruption. The stricter version of the clauses
found in the 2010 Marhowra RFQ and the 2008 Madhepura RFQ is the norm. Any
deviation from the norm needs explanation. Further a period of six months
between the end of an adviser’s advisory engagement and his/ her dealings with
a bidder is too short a gap and again raises a red flag. The dilution of these
clauses in the 2010 Madhepura RFQ by Respondent 4 is unjustifiable. These
changes were introduced by corrupt officers of Respondent 4 with the ulterior,
corrupt and dishonest intent and motive to benefit GE, and to allow GE to
engage in corrupt dealings with former advisors for the Project like Mr. Vinod
Sharma who had influential links within the Railways Ministry and the Planning
Commission.
212.
Clause 2.2.1 (d) of
the 2010 Madhepura RFQ even permits the bidder to engage an adviser to the
Indian Railways, after three years from the date commercial operations for the
Project commence. There is no requirement for even a six month gap in such
case. This again is an unjustifiable dilution of normal RFQ terms, and appears
intended to allow GE to employ corrupt Indian Railways officials (like Mr. Ved
Mani Tiwari) at a later date as quid pro quo for the assistance rendered by
these officials to GE for winning the tender.
213.
The new RFQs issued on
6 May 2013 also contain the same defect.
214.
The Railway Ministry
affidavit dated 16 January 2013 has produced an amended model RFQ issued by the
Ministry of Finance on 18 May 2009. This document also contains a dilution of
the consultant conflict of interest clause. It is submitted that this dilution
is unacceptable, unjustifiable, unlawful, arbitrary and malafide and that it is
intended to promote corruption.
Issue of bigger
conspiracy
215.
The above facts
provide evidence of a deeper conspiracy. General Electric was principally
interested in the diesel locomotive factory tender. It had lost this tender
once already in 2009. In 2010, General Electric expected competition from EMD
(which because of its acquisition by Caterpillar in 2010 had shown interest in
participating and had access to the required financial and other resources).
General Electric had not managed to find a replacement for Mr. Shakeel Ahmed
who was General Electric’s “focal point” within the mechanical directorate of
the Railways Ministry in 2009. General Electric did not have sufficient clout
within the mechanical directorate needed to influence the bid and the bidding
documents. Also, EMD would have kept a close watch on General Electric’s
interactions with Railway Ministry officials in the mechanical directorate.
216.
General Electric got
around these hurdles by cultivating Ministry officials in the electric
directorate and by influencing the bid process and the bid documents for the
electric locomotive factory tender. General Electric was not considered a serious
bidder for the electric locomotive factory tender (even though it prequalified)
by the other short-listed bidders (Siemens, Alstom and Bombardier). General
Electric’s interactions with Railway officials from the electric directorate
and its influence on the electric locomotive tender RFQ and RFP would therefore
have gone un-noticed or un-challenged. EMD would not have kept a tab on General
Electric’s interactions with the electric directorate or on General Electric’s
lobbying for the electric locomotive factory tender.
217.
Not being able to or
not wanting to appear to influence the diesel locomotive tender directly (that
General Electric was actually interested in), General Electric took the
circuitous route and got pliant electric directorate officials to introduce
favourable changes to the electric locomotive RFP terms. Once this was
achieved, General Electric could then more easily/ subtly push for the same
changes to be introduced into the diesel locomotive RFP terms invoking the
principle of parity.
218.
General Electric was
never really interested in bidding for the electric locomotive factory as
General Electric does not make electric locomotives. General Electric’s bid for
the electric locomotive tender was non-serious. This bid’s real purpose seems
to have been to create a smoke-screen for General Electric’s efforts to
influence the diesel locomotive bid process. However, Mr. Pratyush Kumar’s
cultivation of electric directorate officials (like Mr. Ved Mani Tiwari) was so
successful that Mr. Pratyush Kumar started to pitch for a real bid by GE for
the electric locomotive factory. This is when McKinsey was called in at the end
of May 2010 to make recommendations on whether General Electric should
participate in the electric locomotive factory tender. By mid June 2010, Mr.
Jeffrey Immelt had taken the final decision that General Electric would not bid
for this tender.
219.
There is substantial
evidence that the bid process and the bid documents for the two impugned
tenders were manipulated and tailored by Government of India officials from the
Planning Commission and the Railways Ministry with the intent to favour and
benefit General Electric over other bidders and prospective bidders. The
evidence also discloses that General Electric had managed to corrupt Indian
Railways officials in the electric division and was being helped by pliant
officials from that division. As a result, General Electric managed to have the
bid documents pertaining to the 2010 tender for the electric locomotive factory
tailored more easily and extensively than it was able to manage in respect of
the 2010 tender for the diesel locomotive factory which was being managed by a
separate division (the mechanical division).
Larger public
interest issues
220.
The petitioner submits
that the 2010 tenders and the 2013 tenders for both the Madhepura and the
Marhowra locomotive factory Projects have been tailored to keep Indian
potential suppliers for such locomotives out of the fray. India has been self-sufficient in
locomotive manufacture since independence. The indigenous locomotive
manufacture industry provides jobs to a large number of Indians. Public sector
units like BHEL and Railway Production units like Chittaranjan Locomotive
Works, Diesel Locomotive Works and others produce high quality locomotives and
are continuously working to improve technology. Recently, DLW has with EMD’s
assistance indigenously developed a new high powered locomotive with the latest
technology.
221.
While the petitioner
does not deny that the Indian Railways’s locomotive needs are likely to
increase or that the Indian Railways must seek technological improvements, the
petitioner submits that the public interest aspects of giving enormous
incentives and concessions to foreign locomotive manufacturers to establish
factories in India on government land with assured long-term orders guaranteed
by the Government of India needs to be examined more closely.
222.
The petitioner points
out that the proposed locomotive factory Projects at Marhowra and Madhepura do
not involve technology transfer to the joint venture company in which the GOI
will be a party. China
has insisted upon technology transfer in its locomotive supply contracts with
General Electric. The draft contracts for the Madhepura and Marhowra factories
create enormous risks for the Indian Railways in case disputes arise with the
foreign joint venture partner. Even though the GOI can take over the factories
in such case, it will have no access to the technology needed to continue
manufacture of locomotives in these factories and to continue to maintain the
locomotives already supplied.
223.
Further, General
Electric plans to use the joint venture company under these Projects merely as
an assembly unit. A substantial portion of design and manufacturing activities
of the technology intensive components of these locomotives will take place in
the United States .
General Electric intends to use its Indian facilities only for assembly
purposes.
224.
The Government of
India needs to consider the long-term impact of the proposed Madhepura and
Marhowra Projects on the Indian locomotive industry and the impact on Indian
jobs in this sector. How will the proposed factories at Madhepura and Marhowra
affect DLW, CLW, BHEL and other indigenous potential locomotive suppliers? Do
these factories and long-term supply orders not dis-incentivise BHEL, CLW and
DLW to continue to improve productivity and technology? Will these locomotive
factories at Marhowra and Madhepura not kill the indigenous locomotive
industry? Is it in Indian interest to become so dependent upon locomotive
supplies by a foreign manufacturer? What is the potential for disputes in the
proposed JVs? Are the projected estimates for locomotive needs by the Indian
Railways accurate? If BHEL or a similar Indian unit were given the opportunity
to set up a factory on Railway land with all the incentives/ concessions being
offered to General Electric, what kind of boost would this give to the Indian
locomotive industry including the potential for export? Should the huge
advantages of the assured Indian Railways market for locomotives be completely
handed over to a single foreign MNC? Is this in the strategic interest of India
from the perspective of boosting Indian industry? How could this valuable asset
(an assured market for locomotives) be more strategically utilised by the
Railway Ministry and the GOI in Indian interest?
225.
While the petitioner
is all for open competition and while international firms like General Electric
should be given the opportunity to participate in such tenders, can the GOI
justify drafting these tender documents so that all Indian potential bidders
are kept out. Also can the GOI justify drafting these tenders so that many
foreign suppliers/ consortiums who are potential suppliers are also kept out.
226.
The Indian Railways is
under a lot of financial strain. It does not have enough funds to even
modernise its safety infrastructure. In such a situation, is it advisable for
the GOI to tie up Indian Railway funds in long-term locomotive purchase
contracts? The GOI could very well ask GE to set up a locomotive factory on its
own and General Electric would be able to participate in all Indian tenders for
locomotive purchases.
227.
The DLF and ELF
Projects including the new RFQs for these Projects issued on 6 May 2013 violate
the proposed procurement policy of the Government of India which disapproves of
single-source long term procurement contracts.
Issue of General
Electric corruption in Pakistan
228.
The petitioner also points
out that General Electric corruption in India is not an isolated case.
General Electric has faced accusations of corruption in Pakistan locomotive tenders over
the last 4 years. The petitioner submits that she was asked to approve a third
party contract for General Electric in Pakistan
and it is very likely that this contract was used by General Electric to pay
bribes to Pakistan
government officials in connection with the Pakistan locomotive tenders. The petitioner did approve such third party
contract in Pakistan
while she was employed by General Electric.
Subversion of writ proceedings and attempt
to defeat the ends of justice and to subvert the rule of law by covering up
forgery, fraud, corruption and bribery and by attempting to protect General
Electric from the lawful consequences of its illegal and corrupt activities/
actions
229.
As is clear from the list of dates provided, the
combined effect of the orders of this court and the actions of the PMO, the
Planning Commission, the Railway Ministry, the Finance Ministry, Prime Minister
Manmohan Singh, Finance Minister P Chidambaram, Mr Montek Singh Ahluwalia and
Mr Pavan Bansal is that by the time this matter is heard on or after 18 July
2013, the new Bidding Process initiated on 6 May 2013 would be complete.
230.
This is a clear attempt to defeat the ends of justice,
to subvert the rule of law and to defeat and subvert these writ proceedings by
over-reaching the court.
231.
The following questions arise and must be answered by
the Railway Ministry and the PMO who are respondents 4 and 5 respectively.
(i)
Is the Prime Minister, Dr Manmohan Singh aware of these
writ proceedings and of the complaints, issues and evidence before this court
in connection with the complaints of corruption, fraud, forgery, bribery,
illegal lobbying, tailoring of bid documents, and other corrupt, illegal,
malafide and improper practices in connection with the ELF and DLF Projects and
the 2010 tenders for these Projects?
(ii)
Is the Finance Minister (Mr P Chidambaram) aware of
these writ proceedings and of the complaints, issues and evidence before this
court in connection with the complaints of corruption, fraud, forgery, bribery,
illegal lobbying, tailoring of bid documents, and other corrupt, illegal,
malafide and improper practices in connection with the ELF and DLF Projects and
the 2010 tenders for these Projects?
(iii)
The petitioner has accused Mr Montek Singh Ahluwalia of
being implicated in the corrupt practices favouring General Electric in
connection with the ELF and DLF Projects and tenders. The petitioner believes
that Mr Montek Singh Ahluwalia is certainly personally aware of these writ
proceedings but a formal answer to this question is required. Therefore is the
Deputy Chairman of the Planning Commission (Mr Montek Singh Ahluwalia) aware of
these writ proceedings and of the complaints, issues and evidence before this
court in connection with the complaints of corruption, fraud, forgery, bribery,
illegal lobbying, tailoring of bid documents, and other corrupt, illegal,
malafide and improper practices in connection with the ELF and DLF Projects and
the 2010 tenders for these Projects?
(iv)
Is Mr Pavan Kumar Bansal (Railway Minister until 3 May
2013) aware of these writ proceedings and of the complaints, issues and
evidence before this court in connection with the complaints of corruption,
fraud, forgery, bribery, illegal lobbying, tailoring of bid documents, and
other corrupt, illegal, malafide and improper practices in connection with the
ELF and DLF Projects and the 2010 tenders for these Projects?
(v)
Did Mr Pavan Kumar Bansal (then Railway Minister)
attend the Cabinet meeting on 1 May 2013 at which the decision was taken to
cancel the impugned tenders and to immediately proceed to issue new RFQs for
both the ELF and DLF Projects?
(vi)
Is Mr C P Joshi (current Railway Minister) aware of
these writ proceedings and of the complaints, issues and evidence before this
court in connection with the complaints of corruption, fraud, forgery, bribery,
illegal lobbying, tailoring of bid documents, and other corrupt, illegal,
malafide and improper practices in connection with the ELF and DLF Projects and
the 2010 tenders for these Projects?
(vii)
Were Dr Manmohan Singh, Mr P Chidambaram, Mr Montek
Singh Ahluwalia and Mr Pavan Kumar Bansal aware of these writ proceedings and
of the complaints, issues and evidence before this court in connection with the
complaints of corruption, fraud, forgery, bribery, illegal lobbying, tailoring
of bid documents, and other corrupt, illegal, malafide and improper practices
in connection with the ELF and DLF Projects and the 2010 tenders for these
Projects when the IGOM was constituted on the directions of the Prime Minister,
Dr Manmohan Singh on March 8, 2013 and when the IGOM met and deliberated on 22
April 2013?
(viii)
Were the officers from the Railway Ministry, the
Planning Commission, the PMO and the Finance Ministry who prepared the detailed
background note and other documents considered by the IGOM on 22 April 2013,
aware of these writ proceedings and of the
complaints, issues and evidence before this court in connection with the
complaints of corruption, fraud, forgery, bribery, illegal lobbying, tailoring
of bid documents, and other corrupt, illegal, malafide and improper practices
in connection with the ELF and DLF Projects and the 2010 tenders for these
Projects? Were the complaints, issues and evidence raised/ produced in these
writ proceedings placed before the IGOM or included in the detailed background
note that was prepared for the IGOM?
(ix)
Which officers prepared the detailed background note
considered by the IGOM on 22 April, 2013?
(x)
Who prepared the note submitted by the Railway Ministry
to the Cabinet on 26 April, 2013? Were the complaints, issues and evidence
raised/ produced in these writ proceedings placed before the Cabinet in the
note that was put up by the Railway Ministry for approval by the Cabinet 26
April, 2013? Did this note mention the pendency of these writ proceedings?
(xi)
Was the Cabinet aware of the pendency of these writ
proceedings on 1 May 2013 when it considered the proposal of the Railway
Ministry and approved the cancellation of the 2010 tenders for the ELF and DLF
and issued directions for issuance of new RFQs for these two Projects and set 6
May 2013 as the date for the issuance of the RFQs and 6 July 2013 as the date
for the issuance of the RFPs? Was the Cabinet aware of the complaints, issues
and evidence before this court in connection with the complaints of corruption,
fraud, forgery, bribery, illegal lobbying, tailoring of bid documents, and
other corrupt, illegal, malafide and improper practices in connection with the
ELF and DLF Projects and the 2010 tenders for these Projects, when it took its
decision dated 1 May 2013?
(xii)
Does the Railway Ministry intend to issue the 2013 RFQs
for the ELF and the DLF to General Electric Company, to GE India Industrial
Private Limited, to GE Global Sourcing India Private Limited or to any
associate company of General Electric Company?
(xiii)
Does the Railway Ministry intend to receive bids under the
2013 RFQs for the ELF and the DLF Projects from General Electric Company, GE
India Industrial Private Limited, GE Global Sourcing India Private Limited or any
other associate company of General Electric Company?
(xiv)
Can the Prime Minister Dr Manmohan Singh, Mr Montek
Singh Ahluwalia, Mr Pavan Kumar Bansal, Mr C P Joshi, Mr P Chidambaram, the
Railway Ministry, the Finance Ministry, the PMO, the Planning Commission, the
Cabinet Secretary and the Union Cabinet explain the inordinate hurry in issuing
new RFQs after cancelling the 2010 tenders without waiting for the outcome of
this writ petition and without a final conclusion being reached on the
complaints before this court of corruption, forgery, bribery, fraud, illegal
lobbying and other illegal activities engaged in by General Electric in
connection with the ELF and DLF Projects and the 2010 tenders for these
Projects?
(xv)
Can the Prime Minister Dr Manmohan Singh, Mr Montek
Singh Ahluwalia, Mr Pavan Kumar Bansal, Mr C P Joshi, Mr P Chidambaram, the
Railway Ministry, the Finance Ministry, the PMO, the Planning Commission, the
Cabinet Secretary and the Union Cabinet justify the decision to issue new RFQs
to General Electric or its Associate companies while complaints of corruption,
forgery, bribery, fraud, illegal lobbying, and other illegal activities against
General electric are pending hearing before this Court?
(xvi)
Can the PMO (respondent 5) disclose what legal standing
does an Informal Group of Ministers have and who will be liable for the
malafide, arbitrary or unreasonable decision taken by this IGOM in recommending
that new RFQs be issued for the ELF and DLF Projects even while these writ
proceedings are pending hearing?
(xvii)
Can the PMO (respondent 5) and the Railway Ministry
(respondent 4) inform the court as to how (in view of the complaints and
evidence against General Electric of corruption, fraud and other undesirable
practices before this court in connection with the 2010 Madhepura and Marhowra
tenders), the Government of India proposes to comply with Clause 4.1.2 of the
2010 Marhowra RFQ which provides:
“Without prejudice to the rights of the Authority under
Clause 4.1.1 hereinabove, if an Applicant is found by the Authority to have
directly or indirectly or through an agent, engaged or indulged in any corrupt practice,
fraudulent practice, coercive practice, undesirable practice or restrictive
practice during the Bidding Process, such Applicant shall not be eligible to
participate in any tender or RFQ issued by the Authority during a period of 2
(two) years from the date such Applicant is found by the Authority to have
directly or indirectly or through an agent, engaged or indulged in any corrupt
practice, fraudulent practice, coercive practice, undesirable practice or
restrictive practice, as the case may be.”
(xviii)
Can respondents 4 and 5 (the PMO and the Railway
Ministry) inform the court if they intend to blacklist General Electric and its
associate companies from participating in any Railway tender for a period of
two years?
232.
The affidavit of Mr Nihar Ranjan Dash dated 15 May,
2013 also raises the following questions:
(i)
What changes were made to the final bid documents for
the ELF over and above the Cabinet approved PCMA in the 2010 Bidding Process?
(ii)
Paragraph 5 of this affidavit states that meetings of
the Empowered Committee were not convened for the DLF in the 2010 tender and
that no major changes were introduced into the BID documents/ PCMA for the DLF
Project in 2010.
(iii)
Can the Ministry of Railways explain the reference to
Due Diligence in paragraph 5 of this affidavit? What was the purpose and scope
of this Due Diligence and what activities were undertaken as part thereof?
(iv)
Paragraph 6 of this affidavit states that subsequently
the Railway Ministry decided to review the Bid Documents and to harmonise the
Bid Documents of ELF and DLF? There is again a reference to “internal due
diligence” as a result of which revised bid documents were prepared.
(v)
The affidavit dated 15 May 2013 suggests that the
Planning Commission did not agree with the changes to the Bid documents for ELF
and DLF proposed by the Railways and that the IGOM was constituted by the PMO
at the behest of the Planning Commission to over-rule the Railways on the
changes proposed by the Railways as a result of its due diligence.
(vi)
Can the PMO and the Cabinet Secretary explain why the
Planning Commission continues to be permitted to interfere with the
implementation of a Railway Ministry project especially when the evidence shows
that Mr Montek Singh Ahluwalia was/ is favoring the award of DLF Project to General
Electric?
(vii)
Can the PMO and the Railway Ministry produce the entire
documents and issues that were placed before this IGOM/?
(viii)
Paragraph 8(i) of the affidavit states that the IGOM
decided “inter-alia” that the Railway Ministry will apply to the Cabinet for
approval to revise the eligibility criteria for the RFQs to be issued over the
2008 and 2010 RFQs and provide reasons for these revisions. Did the IGOM decide
on the proposed revisions to the eligibility criteria? What are these proposed
revisions and why are these being made?
(ix)
Paragraph 8(i) of the affidavit also states that the
IGOM decided that the Railway Ministry will seek Cabinet approval to process
fresh RFQs on account of changes in the scope of work. What were these changes
in the scope of work? Did the IGOM recommend cancellation of the 2010 tenders
and for what reasons?
(x)
Paragraph 8(i) of the affidavit also states that the
IGOM took decisions on 13 issues relating to the changes to the Bid Documents/
PCMAs on which the Planning Commission differed with the Railway Ministry. What
are these 13 issues and what decisions were taken on these issues by the IGOM
and for what reasons?
(xi)
This affidavit does not disclose the scope of
deliberations of the IGOM in connection with the ELF and DLF tenders.
(xii)
The PMO and the Cabinet Secretariat should be directed
to produce the full record of the deliberations of the IGOM.
(xiii)
Paragraph 9 of the affidavit does not mention the
complete contents of the note sent by the Railway Ministry to the Cabinet for
approval. The complete note should be produced before this court.
(xiv)
Paragraph 9 of this affidavit states that the note put
up for approval by the Railway Ministry to the Cabinet interalia sought
approval for cancellation of the pre-qualification carried out in 2010. What
were the reasons and grounds for cancellation of this pre-qualification? Were
the complaints and evidence against General Electric produced in these writ
proceedings considered as relevant material to cancel the prequalification of
General Electric under the 2010 DLF and ELF RFQs? Has the Railway Ministry
cancelled General Electric’s prequalification under Clause 4.1.2 of the 2010
Marhowra RFQ?
(xv)
What action does the Railway Ministry intend to take
against General Electric for engaging and using the services of Mr Vinod Sharma
in violation of 4.1.3 (a) of the 2010 Marhowra RFQ?
(xvi)
What action does the Railway Ministry intend to take
against General Electric for submitting a tampered and therefore forged
customer certificate (issued by Kazakhstan Railways) with its technical bid
submitted on 12 July 2010 for the 2010 Marhowra RFQ?
(xvii)
What were the revised eligibility criteria for the DLF
and the ELF Projects as annexed to the Cabinet note dated 26 April 2013? What
are the reasons and grounds for these changes to the eligibility criteria for
the ELF and DLF Projects?
(xviii)
Why has the Cabinet in its meeting on 1 May 2013
recommended that the new RFQs be issued by 6 May 2013 and the new RFPs be
issued by 6 July 2013? Was the Cabinet made aware of these writ proceedings
before it made this recommendation?
(xix)
The Cabinet Secretary and the PMO must be directed to
produce the full record of the Cabinet’s deliberations on the ELF and DLF
Projects in its meeting on 1 May 2013.
(xx)
The Railway Ministry should be directed to produce on
record the letters issued to the respondents 7, 13, 14, 15 and 16 informing
then about cancellation of the 2010 tenders for the ELF and DLF Projects.
(xxi)
What are the reasons for the cancellation of the 2010
tenders for the ELF and DLF Projects?
233.
The petitioner states that a quick glance through the
new RFQs issued on 6 May, 2013 shows that some of the petitioner’s objections
have been addressed. However, some new changes have been introduced in these
RFQs merely to defeat the ends of justice and to unlawfully protect General
Electric from the consequences of the complaints that are before the court in
these writ proceedings.
234.
The PMO and the Railway Ministry cannot be permitted to
over-reach this court and to subvert these writ proceedings and the rule of law
by going ahead with the plan disclosed in the Railway affidavit dated 15 May,
2013.
235.
The present application therefore seeks an injunction
restraining respondents 4 and 5 from proceeding with the Bidding Process under
the RFQs issued on 6 May 2013 and from issuing the new RFQs to General Electric
Company or to any associate of General Electric Company and/ or from
shortlisting General Electric Company or to any associate of General Electric
Company under the new RFQs until this writ petition is heard and decided.
236.
The documents discussed here
(among other evidence) establish that the terms/ clauses of the RFP for the
electric locomotive factory 2010 tender were changed to benefit General
Electric. The documents also establish that officials in the Planning
Commission and in the electric directorate/ division of the Ministry of
Railways were involved in this corrupt activity. In addition, the documents
establish that General Electric had access to pliant and corrupt officials in
the Planning Commission and in the electric directorate of the Railway
Ministry.
237.
General Electric has engaged
in corrupt and undesirable practices in respect of the 2009 and 2010 electric
and diesel locomotive tenders. Mr. Vinod Sharma, a former adviser to the
Ministry of Railways for the same Project was advising/ helping/ lobbying for
General Electric. This constituted a corrupt practice. In 2008-2009, Mr.
Shakeel Ahmed was advising and helping General Electric even while he was
handling the diesel locomotive tender for the Indian Railways. General Electric
is being helped by Mr. Gajendra Haldea from the Planning Commission who,
according to news reports in the Outlook India magazine and the Pioneer
newspaper, was responsible for introducing changes into the bid documents that
benefited General Electric. Mr. Pratyush Kumar of General Electric has had
hundreds of meetings with Mr. Gajendra Haldea. The 2010 diesel locomotive RFQ
was tailored to allow General Electric to prequalify without having to provide
the disclosures/ certifications mandatorily required by the GOI Guidelines for
qualification of Bidders seeking to acquire stakes in Public Sector Enterprises
through the process of disinvestment bearing Office Memorandum No. 6/4/2001DDII
and dated July 13, 2001 and the Guidelines issued by the Ministry of Finance (F.No.
24(1)/PF.II/07) titled ‘Guidelines for Pre-Qualification of Bidders for PPP
Projects’ along-with the Government of India endorsed and recommended model
RFQ. Both the 2010 diesel locomotive RFQ and the 2010 electric
locomotive RFQ violated these Government of India guidelines. The 2010 electric
locomotive RFQ was tailored to allow General Electric to prequalify even though
General Electric does not manufacture electric locomotives and by its own
admission does not possess the technology or the expertise. General Electric
has had corrupt contact and help from Mr. Ved Mani Tiwari working in the
electric directorate of the Indian Railways. General Electric modified its
technical bid for the 2010 electric locomotive factory RFQ three days after the
application due date by sending an email with an excel file containing
additional information to Mr. Ved Mani Tiwari’s Gmail account. Various internal
General Electric documents establish that General Electric has lobbied the
Planning Commission and Ministry of Railways officials to influence the bid
process and the bid documents. General Electric had made payments amounting to
bribes/ illegal gratification to Indian Government officials through a third
party contractor called Aartech Consultants India Private Limited. Internal
General Electric documents and published news articles in the Outlook India
magazine and the Pioneer newspaper quoting Railway and Planning Commission
officials establish that the bid documents for the electric and diesel
locomotive tenders were modified in order to benefit General Electric. Internal
General Electric documents reproduced herein and in the partial rejoinder filed
on July 9, 2012 to General Electric’s counter affidavit establish that General
Electric was using its participation in the electric locomotive tender to
influence the bid process and the bid documents in the diesel locomotive
tender.
238.
The present writ petition was
filed on February 29, 2012 assailing the short-listing of Respondent 7 in two
multi-billion dollar global tenders floated by the Ministry of Railways being
tenders (Global RFQ No. 2010/ ME (Proj)/ 4/ Marhoura/RFQ and RFQ No. 2010/
Elect. (Dev0 440/1(1)) for award of bids to set up proposed diesel and electric
locomotive factories with guaranteed long-term purchase orders at Marhowra and
Madhepura respectively. The petitioner refers to and relies upon the prayers
made in this writ petition.
239.
The writ petition, affidavits
filed by the petitioner, and the other documents and evidence produced by the
Petitioner in court in this matter, made out a case based upon facts and
evidence for this court to direct the Railway Ministry to scrap both the
tenders, i.e., the 2010 tender for the diesel locomotive factory at Marhowra
and the 2010 tender for the electric locomotive factory at Madhepura. The
latest affidavit of the Railway Ministry filed on 15 May 2013 shows that these
2010 tenders have been cancelled.
240.
The petitioner submits that
the facts and evidence detailed hereinabove and in other documents produced
before this court in the present matter establish a more than prima facie case
that General Electric is liable to be blacklisted from Railway tenders. There
exists sufficient evidence before this court that irrefutably establishes that
General Electric (respondents 1, 6 and 7 herein) has (through corrupt and
collusive means) unlawfully influenced the bid process and the bid documents
for the EL and DLF Projects.
241.
The complaints, facts and evidence before the court in
these writ proceedings establish that the General Electric respondents have
engaged in multifarious corrupt, unlawful and improper practices in connection
with the 2008-2009 and 2010 Bidding Processes for the ELF and DLF Projects. The
rule of law demands that these complaints be addressed and that General
Electric be penalised in accordance with law and the tender documents and be
barred from participation in any Railway tenders for a period of at least two
years. This requirement under the rule of law cannot be avoided by Respondents
4 and 5 by merely cancelling the impugned tenders and by issuing fresh RFQs.
The conduct of respondents 4 and 5 shows that the intent behind cancellation of
the impugned tenders in this manner is to cover up the corruption complaints before
the court and to protect General Electric and Railway and Planning Commission
officials from the lawful consequences of their illegal acts. The conduct of
respondents 4 and 5 in cancelling the impugned tenders and by initiating new
tenders in this manner without penalising General Electric and without a final
determination of the complaints before the court is malafide, arbitrary,
motivated and unlawful. It is necessary to find out who is responsible for this
conspiracy to protect General Electric from the lawful consequences of the
illegal activities that are impugned in this writ petition.
242.
This application is being made in the interest of
justice.
243.
This application is a preliminary application being
filed given the urgency in the matter. The petitioner is collecting further
information and reviewing additional documents to expose the conspiracy of
respondents 4 and 5 to shield their corrupt dealings with General Electric and
to save General Electric from being blacklisted in accordance with law. The
petitioner will therefore be filing additional applications and affidavits.
244.
The petitioner has filed an
application in this matter (CM 6096/
2013 ) for recusal by the Bench of Justice Gita Mittal and Justice Deepa
Sharma. This application is pending hearing after being listed before court on
16 May, 2013. The petitioner is vehemently pressing for recusal by both Justice
Gita Mittal and Justice Deepa Sharma. The present application is being filed
without prejudice to this pending request for recusal. The present application
is being filed at this time because of the grave urgency in this matter arising
from the existing threat to the petitioner-whistleblower’s life, who is
presently in danger, and sleeping in her car parked on public streets without
any protection since 27 February, 2013. The petitioner once again requests
Justice Gita Mittal and Justice Deepa Sharma to recuse themselves from this
matter so that it can be heard by another Bench.
245.
This application is necessary
to help protect the petitioner as it will help prevent the ongoing attempted
cover-up of the petitioner’s corruption complaints and the ongoing attempted
collusive subversion of these writ proceedings and the ongoing attempted
elimination of the petitioner-whistleblower.
246.
The petitioner submits that
this Hon’ble Court summon the complete records pertaining to the two impugned
tenders from the Prime Minister’s Office, the Planning Commission, the Ministry
of Finance and the Ministry of Railways. It is submitted that this Hon’ble Court
peruse the records of all these institutions pertaining to the impugned tenders
for at least the last eight years or more to include the time period when these
projects were initially conceived and formulated.
247.
The decisions taken by the
IGOM and the Cabinet to direct the Railway Ministry to issue new RFQs for ELF
and DLF and to complete the bidding process under these new RFQs by July 2013
is malafide, arbitrary and unreasonable and violates Article 14 of the
Constitution in view of the pendency of these writ proceedings. These decisions
do not appear to have taken all relevant material (including these writ
proceedings) into consideration.
248.
This court is aware that Mr
Pavan Bansal who was a member of the IGOM that has recommended this decision
has been sacked by the Government of India for prima facie corrupt dealings in
the first week of May 2013 very soon after the decision was taken. The CBI has
been tapping the phones of several high level officials in the Railway Ministry
for the last 4-5 months. One member of the Railway Board has been arrested and
several others are under the scanner of the CBI and are being investigated for
corruption. There appears to be a connection between these CBI actions and
these writ proceedings. The CBI should be asked to file a report stating if it
has found any additional evidence of corruption in connection with the ELF and
DLF tenders as a result of the surveillance and investigations carried out by
it.
249.
There is another aspect to
this matter that is of great concern. News reports suggest that since the last
few months and particularly since the end of April, 2013, the Railway Ministry
has been functioning under fear of the CBI. Since the end of April, 2013 and
throughout May 2013, the Railway Ministry was almost at a standstill with most
senior officials being wary of being investigated for corruption. The Railway
Minister was sacked soon after 1 May 2013. The new Railway Minister Mr C P
Joshi also has other ministerial responsibilities and has not taken over full
charge at the Railway Ministry. The entire Railway Board (with the exception of
Member electrical) has/ will be changed due to terms of members coming to an
end. There has been therefore no ministerial oversight in the Railway Ministry
since the end of April 2013. There has also been no oversight by the Railway
Board either.
250.
The decision to cancel the
tainted 2010 tenders for ELF and DLF and to issue new RFQs and complete the new
Bidding Process in an inordinate hurry with the clear intent to defeat/ subvert
this writ petition and to help cover up corruption and to protect General
Electric has been clearly timed to take advantage of these unsettling
disturbances within the Railway Ministry.
251.
It also appears that the
threat of CBI investigation might have been used to blackmail Railway Officials
and to force them to not oppose this decision that is being pushed by the PMO
and the Planning Commission.
252.
Just a few days before he was
sacked, news reports described Mr Pavan Bansal as having stated that the DLW and
ELW facilities would be upgraded and expanded to cater to the growing
locomotive demands of the Railways. His reported statements suggested that the
government might scrap the ELF and DLF Projects. The petitioner wonders if Mr Pavan Bansal was
forced out of the Railway Ministry for not supporting the ELF and DLF Projects
as currently conceived.
253.
Given the current scenario
and circumstances in the Railway Ministry. There appears to be complete lack of
accountability and ownership of the new developments within the Railway
Ministry and the Railway Board. Are the Prime Minister Manmohan Singh, the PMO
and the Planning Commission headed by Mr Montek Singh Ahluwalia enforcing their
will by taking advantage of the current turmoil within the Railway Ministry? Are
the ongoing CBI investigations and the threat of more investigations being used
to blackmail Railway officials and/ or other Bidders by the PMO and the
Planning Commission at the behest of General Electric?
254.
Annexed hereto as Annexure
P-3 are copies of recent news reports describing the current turmoil and
disruption within the Railway Ministry and the Railway Board.
255.
How can such important
decisions that amount to subverting the rule of law and subverting these writ
proceedings and that assist cover up corruption and protect General Electric be
pushed through by the PMO and the Planning Commission when the Railway Ministry
is essentially rudderless and paralysed. Which department/ ministry of the
Indian government will take responsibility for these decisions to cancel the
2010 tenders in an attempt to cover up corruption and to rush through a new
bidding process while this court is seized of a recusal application and while
this court is on summer vacation. It is highlighted that the 2010 tenders were
pending for 3 years, so why this sudden rush now to hurry through a new Bidding
Process in just 2 months?
256.
The petitioner points out
that companies from Canada ,
the United States , France , Germany ,
China , Japan , and several other countries
are interested in the ELF and DLF Projects. Companies affiliated to Canada , the United
States , France
and Germany
were/ are adversely affected by the corruption complained of herein and are
parties before this court. The whole world is watching these writ proceedings.
The Government of India through its false affidavits filed herein and through
its latest actions is making a mockery of the rule of law in trying to so
publicly and blatantly cover up corruption and in trying to subvert the rule of
law and these writ proceedings to protect General Electric from the lawful
consequences of its illegal acts.
PRAYER
It is therefore most respectfully prayed that this Hon’ble Court may
be pleased to:
(a)
Stay the decision of the
Cabinet dated 1 May 2013 to cancel the impugned tenders and to issue new RFQs
and RFPs for the ELF and DLF Projects or to proceed with the new Bidding
Process for these Projects until this writ petition is heard and finally
decided and until the complaints made in this writ petition are dealt with in accordance
with law;
(b)
Injunct/ restrain
respondents 4 and 5 (Railway Ministry and the Union of India through the PMO)
from proceeding further with the bid process under the two RFQs issued on 6 May
2013 (Global RFQ No. 2013/M/ (W)/ 964/33 dated May, 2013, and Global RFQ
No. 2013/Elect (Dev)/440/7 dated 6 May, 2013) until
this writ petition is heard and finally decided;
(c)
Injunct/ restrain
respondents 4 and 5 (Railway Ministry and the Union of India through the PMO)
from issuing the RFQ documents for DLF and ELF (for Global RFQ No.
2013/M/ (W)/ 964/33 dated May, 2013, and for Global RFQ No. 2013/Elect
(Dev)/440/7 dated 6 May, 2013) to General Electric
Company, or to GE India Industrial Private Limited, or to GE Global Sourcing
India Private Limited or to any of their associate companies and/or from
receiving applications for prequalification under these RFQs from any of these
companies or their associates until this writ petition is heard and finally
decided;
(d)
Injunct/ restrain
respondents 4 and 5 (Railway Ministry and the Union of India through the PMO)
from short-listing General Electric Company or GE India Industrial Private
Limited, or GE Global Sourcing India Private Limited or any of their associate
companies under Global RFQ No. 2013/M/ (W)/ 964/33 dated May, 2013, and
Global RFQ No. 2013/Elect (Dev)/440/7 dated 6 May, 2013 until this writ petition is heard and finally decided;
(e)
Direct the PMO and the
Railway Ministry to file separate affidavits (through the Principal Secretary,
PMO and the Chairman of the Railway Board respectively) answering the questions
raised in this application;
(f)
Direct the Railway
Ministry to blacklist General Electric Company, GE India Industrial Private Limited, GE Global
Sourcing India Private Limited and all and any of their associate companies from
participation in any Railway Tenders including (Global RFQ No. 2013/M/
(W)/ 964/33 dated May, 2013, and Global RFQ No. 2013/Elect (Dev)/440/7 dated 6
May, 2013) for a minimum period of two years;
(g)
Pass such other and
further orders as this Hon’ble
Court may deem fit and proper.
Place: New Delhi Petitioner
in Person
May 30,
2013 Seema
Sapra
Rendered homeless since May 30, 2012 as a result of
corruption complaints against General Electric and as a result of the whistleblower
corruption petition (W.P. (C ) 1280/ 2012) and presently homeless and sleeping
in her car since 27 February 2013
I have a whistleblower complaint against GE Transportation and the names mentioned: Lorenzo Simonelli, Joel Berdine, Russell Stokes.
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