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NHAI starts probe in alleged US firm linked bribery case

Press Trust of India  |  New Delhi 

The National Highway Authority of (NHAI) today said it has started investigation into alleged payment of bribes to its officials by US firm CDM Smith.

"It is reported in the media that M/s CDM Smith Inc, have allegedly admitted having paid bribe to NHAI officials between 2011 and 2015...

"In view of the seriousness of the charges, NHAI has initiated an internal investigation into alleged payment of bribe money to its officials as reported in the media," the NHAI said in a statement.

A Boston-based construction engineering firm allegedly paid USD 1.18 million bribe to officials of the National Highway Authority of between 2011 and 2015 to bag contracts, the US Justice Department has said, prompting the Indian to order a probe into the allegations.

The NHAI said CDM Smith has been working in the road sector in for quite some time.

However, in 2015, they were debarred for a period of 3 (three) months from participating or engagement in future bidding of NHAI projects because of deficiency in services in one of the projects, Dholpur - Morena Section of NH-3.

"Presently, M/s CDM Smith have no ongoing assignment with the NHAI," the NHAI said.

The Criminal Division of the Justice Department, in a letter dated June 21, said CDM Smith through its employees and agents, and those of its wholly-owned subsidiary in India (CDM India) paid approximately USD 1.18 million in bribes to officials in India in exchange for highway construction supervision and design contracts and a water project contract resulting in approximately USD 4 million in net profits.

Between 2011 and 2015, employees of CDM Smith's division responsible for India operations and CDM India illegally paid bribes to NHAI officials in order to receive contracts from them, the Justice Department said in the letter to CDM Smith.

"The bribes generally were two-four per cent of the contract price and paid through fraudulent subcontractors, who provided no actual services and understood that payments were meant to solely benefit the officials," it said.

In addition, CDM Smith's division responsible for India and CDM India paid USD 25,000 to local officials in Goa in relation to a water project contract, the Justice Department said.

"All senior management at CDM India (who also acted as employees and agents of CDM Smith and signed contracts on behalf of CDM Smith, including CDM India's country manager) were aware of the bribes for CDM Smith and CDM India contracts, and approved or participated in the misconduct," it said.

Road Transport and Highways Minister Nitin Gadkari has taken a serious note of the allegations and asked the NHAI Chairman to hold an inquiry into the matter, a senior Ministry official said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 11 2017. 22:13 IST