GAIL's vigilance department goes after Avinash Em

Vol 18, PW 2 (11 Sep 14) People & Policy

GAIL’s vigilance department, charged with anti-corruption compliance, is investigating the company’s ‘cosy relationship’ with Delhi-based contractor Avinash Em.

PETROWATCH learns letters are flying back and forth between the vigilance department, headed by Rajesh Ranjan, an Indian Police Service officer from the Central Vigilance Commission, and GAIL’s projects team, as well as with Engineers India. Under scrutiny is why GAIL took so long to strip Avinash Em of a Rs68cr ($11m) petrochemicals facilities contract at Vijaipur in Madhya Pradesh.

Avinash was officially blacklisted by GAIL on July 15 this year (2014) after it was found to have faked accounts to win a separate pipeline contract. Yet GAIL allowed it to continue work with Iranian JV partner Tehran Jonoob at the Vijaipur petrochemical project for a full month until August 15.

“GAIL did not encash their (Avinash’s) Rs6.8cr ($1.12m) bank guarantee,” reports a source. “When you ban a company you immediately ask them to wind up and encash their bank guarantee.

Why was this not done?” GAIL vigilance officers are also investigating project consultant Engineers India for alleged complicity. “EIL knew Avinash was not performing since June 2012,” we hear.

“But instead of banning them they gave 40% of the uncompleted work to sub-contractors.” By May this year these contractors had received Rs1.4cr ($230,000) from GAIL and are in line to receive another Rs1.08cr ($108,000) shortly.