Home > 2016 > The Kolkata Flyover Collapse: Some Questions

Mainstream, VOL LIV No 16 New Delhi April 9, 2016

The Kolkata Flyover Collapse: Some Questions

Sunday 10 April 2016, by Barun Das Gupta

Till the afternoon of Thursday, March 31, the Hyderabad-based construction firm Iragava-puru Venkata Reddy Construction Ltd., better known by its initials IVRCL, was not a very high-profile company. But the sudden collapse of a huge slab of a flyover the company was building in Burra Bazar, the thickly-congested business district of Kolkata, brought it into the limelight. Many vehicles and pedestrians got trapped under its debris. Till the time of writing, 26 deaths have been confirmed and nearly a hundred injured, some of whom are in a critical condition. The debris has still not been fully cleared but the stench emanating from there suggests more decomposed bodies may have been lying under it.

In election-bound West Bengal, the tragedy is a godsend to the Opposition parties, from the BJP at one end to the Congress and the CPI-M at the other. It has brought fresh grist to the propaganda mill of the Opposition. More than sympathy for the dead and the injured, there is a competition to derive the maximum political mileage out of the tragedy and put the ruling TMC and its leader, Chief Minister Mamata Banerjee, in the dock. In the present circumstances this is perhaps natural.

The criticism against the ruling party became more strident after Sudip Bandyopadhyay, leader of the TMC’s parliamentary wing, added to the discomfort of his party by saying that he had found the design of the flyover ‘defective’ and had informed the State Government accordingly. However, since much of the construction work had been done by the time, there was little that could be done to stop the construction and change the design. His statement was immediately contradicted by his party colleague Firhad Hakim, the State Urban Development Minister. What is rather intriguing is that not being a civil engineer, how could Bandyopadhyay detect the defect in the design?

Before taking a close look at the credibility and financial health of the IVRCL, certain facts need to be put on record. The Left Front Government gave the contract for the Rs 164 crore flyover project to the IVRCL in 2007, a good four years before it was voted out of power. The TMC Government inherited it. After the tragedy, the reaction of Ashok Bhattacharya, Urban Development Minister of the LF Government, was: “I have no responsibility. The present UD Minister (Firhad Hakim) has to shoulder the responsibility.” PCC chief Adhir Ranjan Chowdhury went a step ahead and demanded Hakim’s ‘immediate arrest’ before any inquiry had been ordered.

The spokesman of the company, K. Pandu-ranga Rao, first blamed the Almighty. “It is an act of God”—was his explanation. Faced with severe criticism for his evasive remark, he came out with another preposterous theory. It was a ‘blast’ that had caused the collapse, he said, without a shred of evidence. The State Police went into action, raiding the company’s offices in Kolkata and Hyderabad and arresting some senior executives and slapping the murder charge on them.

Now about the financial health of the company. A look at the Profit and Loss Account of IVRCL brings out some telltale facts. Its sales turnover has fallen from Rs 5651.45 crores in March 2011 to Rs 3117.42 crores in March 2015. During the same period, its total income fell from Rs. 5709.52 crores to Rs 3.217.75 crores; the operating profit declined from Rs 514.59 crores to —(minus) Rs 29.27 crores; its reported net profit nosedived from Rs 157.9 crores to —(minus) Rs 672.23 crores; and its earning per share (EPS) from Rs 5.91 crores to —(minus) Rs 14.64 crores. (Source: www.moneycontrol.com/financials/ivrcl/profit-loss/IVR)

Due to the mounting losses, the company dismissed 23 per cent of its workforce as a cost-cutting measure in 2015. The previous year, it had offered Rs 4000 crores of assets for sale, hoping that if the sale went off, it would be able to liquidate its debt burden.

Meanwhile, after the Kolkata tragedy, more facts have come to light. The IVRCL was blacklisted by the Jharkhand Government in 2015 for doing work haphazardly. The Jharkhand Government served a notice on the company demanding Rs 750 crores for losses and damages caused. Earlier the company faced a CBI probe into the allegation of its paying a bribe of Rs 22 crores to former Chief Minister Madhu Koda for bagging a contract for rural electrification. However, the probe had to be closed for lack of adequate evidence.

Way back in 2011, the CBI filed a case against the company for irregularities in a tsunami housing project in Puducherry that resulted in a loss of Rs 35 crores to the Puducherry Government and the Union Government.

Both the LF Government, which awarded the Kolkata flyover project to the IVRCL, and the successor Trinamul Government are answer-able to the people—the first for giving the contract in the first place to a tainted and sick company with such a track record and the TMC Government for not terminating the contract, though the work on the project was getting unconscionably delayed. After the accident, a company spokesman admitted that in the nine years from 2007 to 2016, they could complete only 55 per cent of the work or half the job. Another half remains to completed,

Now the blame-game and mutual recrimi-nations have begun, with each side trying to pass the buck on the other, while the bereaved families mourn their dead. An inquiry will of course be conducted and responsibility fixed. Some may be found guilty. But the far bigger question is: will this disaster put an end to the unending series of such disasters once and for all? Will private greed have the better of public safety in future also?

The author was a correspondent of The Hindu in Assam. He also worked in Patriot, Compass (Bengali), Mainstream. A veteran journalist, he comes from a Gandhian family and was intimately associated with the RCPI leader, Pannalal Das Gupta.