The work was related to construction and maintenance of ESI hospitals in three cities - Hyderabad, Vizag and Chennai

KCR questioned by CBI over irregularities in 2006 contract for ESI hospitals File photo: Facebook/Telangana CMO
news Thursday, October 22, 2015 - 07:36

The Central Bureau of Investigation (CBI) on Monday questioned Telangana chief minister K Chandrasekhar Rao in connection with alleged irregularities in a contract for building ESI hospitals, when he was the Union Labour minister under the UPA regime in 2006. 

Reports suggest that the contract which caused a loss of Rs 6 crore approximately to the government, involved KCR lobbying for the contract to be given to the Andhra Pradesh fisheries department rather than the National Building Construction Corporation (NBCC).

The work was related to construction and maintenance of ESI hospitals in three cities - Hyderabad, Vizag and Chennai.

According to a Times of India report, the CBI found that Rao's private secretary wrote to the management of the ESI hospitals management seeking cancellation of the contract to NBCC and transferring it to an executive engineer V Suryanarayana in the AP fisheries department. 

"The PS of then minister (Rao) wrote to ESIC that minister has desired that work be allotted to AP fisheries without looking into the rules and regulations that only National Building Construction Corporation is mandated to carry out such works. Everything happened very quickly and ESIC was forced to change the contract, which had already been given to NBCC by that time. Minister's letter played an important role in influencing the contract in favour of AP fisheries department," a CBI official told TOI.

Employees' State Insurance Corporation (ESIC) of India had started a probe in 2007-2008 into alleged substandard quality of work after which the CBI started an investigation based on information from a source, a report in Deccan Herald adds.

Though the original contract was for Rs 19 crore, the substandard quality is estimated to have caused a loss of Rs 6 crore with the added trouble of another organisation having to start the work from scratch.

The CBI has also questioned Rao's private secretary, the then director general of ESIC and the then controller of finance.


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