The Rs 1,031-crore project, funded by Japan International Cooperation Agency (JICA), was approved when Digamber Kamat government was in power for augmenting water supply in south Goa and laying sewerage lines in the state's major cities.
After granting bail, special judge B P Deshpande directed the duo to furnish a bail bond of Rs 5 lakh and surety of a like amount. They have also been directed to surrender their passports within two days and not to leave the country without the permission of the court.
While Alemao was arrested on August 5 and has been in jail since then, Wachasundar was arrested in the last week of July after Goa Police crime branch began its investigation in the case.
The Goa Police has been probing the involvement of several government officials as well as politicians and the US company officials in the multi-crore bribery scandal.
The charge sheet, filed under the Prevention of the Corruption Act, names Alemao, Berger vice-president Satyakam Mohanty, Raychand Soni (hawala operator), Wachasundar, Louis Berger employee James McClung and incumbent Margao Municipal chairperson Arthur D'Silva besides the New Jersey-based consultancy firm.
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