An article about political corruption in India, published in Canada's most widely read newspaper, has triggered a political storm in faraway Chhattisgarh and unwittingly unmasked the impediments to building infrastructure in India's insurgency affected districts.

On August 3, the Toronto Star published the article, which alleged that the ruling BJP's Minister for Public Works, Brijmohan Agrawal, demanded a bribe of $ 1 million from a Canadian civil contractor tasked with constructing a road through Maoist-affected Dantewada district. Mr. Agrawal has denied these claims.

According to the Star, Canadian national Mir Ali's company Superbuild India won a contract to construct a 77.8 km stretch of the National Highway 221, linking the town of Sukma in Dantewada district to Konta, a settlement on the Chhattisgarh-Andhra Pradesh border. Mr. Ali posted a $ 4 million bank guarantee and Superbuild India began work last year, only to be attacked by armed men, who assaulted workers and torched equipment. Superbuild's contract was subsequently terminated.

“Family threatened”

Mr. Ali, the Star report continues, then approached Mr. Agrawal, who demanded $ 1 million as bribe, failing which Mr. Ali's bank guarantee of $ 4 million would be forfeited. When Mr. Ali refused to pay the bribe, the Star alleges, he was shadowed by unidentified men and his family was threatened.

On Saturday, documents released by the State government cast doubts on the veracity of the Star's report, but reveal a set of backroom deals between private operators that plague the State and the Central government's attempts to build infrastructure in the country's Maoist-affected areas.

In July 2010, the Union Ministry of Road Transport and Highways approved the construction of 77.8 km of NH 221 under a scheme to improve road connectivity in districts affected by “Left Wing Extremism.” The contract, however, was not granted to Superbuild India, but to Niraj Cement Structurals Ltd., a firm listed on the Bombay Stock Exchange (BSE). In its July 26, 2010 disclosure to the BSE, Niraj Cement Structurals announced it had won an order worth Rs. 1,368,448,390 to build parts of the highway.

In December 2010, however, Chhattisgarh's Principal Secretary M.K. Raut wrote a letter of complaint to the Union Ministry, alleging that Niraj Cement Structurals was yet to begin road construction and recommended that the company be disqualified from bidding for future works.

In May this year, the Ministry wrote to Niraj Cement Structurals, accusing the company of misleading it and bidding for more contracts than it could realistically execute. “You [Niraj Cement] have been technically disqualified … for making false representation … by suppressing the information about some of your existing commitments to project your higher available big capacity,” said the letter, and barred the company “from participating in tenders for all NH/Centrally sponsored works for a period of three years.”

On June 30, 2010, the Ministry authorised the State government to “take penal action against the contractor, including termination of contract.” On July 8 this year, the Superintending Engineer of the Public Works Department (PWD), Raipur, sent a notice of termination to Niraj Cement Structurals, which said all performance and security deposits (worth approximately Rs. 1.5 billion, according to sources) stood forfeited.

At this point, Superbuild India enters the picture. Mr. Ali appears to be a sub-contractor hired by Niraj Cement Structurals and tasked with constructing the highway. It is unclear if such sub-contracting falls within the rules of the contract. In a June 2, 2011 letter faxed to the PWD, and accessed by this correspondent, Superbuild India claims that Niraj Cement Structural Ltd.'s security deposit was fraudulently obtained from Superbuild and submitted in an escrow account controlled by the State government.

In its reply, the PWD notes that, as per their records, neither Mr. Ali nor Superbuild India is mentioned in the contract. When Niraj Cement Structurals' contract was terminated, Mr. Ali apparently lost his security deposit that he allegedly put up on Niraj Cement Structurals behalf, and — according to the Star — is now on the brink of financial ruin.

Mr. Agrawal has professed his ignorance of the whole deal. “I have met Mr. Ali, but I told him there was nothing I could do,” he said in an interview on Saturday night. “We have absolutely no records of his firm building any roads in the State. There is nothing I can do as all contracts are authorised and monitored by the Central government.”

“Directions to grant, and subsequently terminate, the contract were sent by the Central government,” he said. This correspondent made several unsuccessful efforts to reach Superbuild India and Niraj Cement Structurals at telephone numbers listed on their website and letterheads.

The 77.8 km of NH 221, through some of Central India's most sensitive areas, is yet to be built.