Contractor earned Rs.500 crore in Rail Neer scam

18 Oct 2015 | By Kartikeya Jain
Rail Neer scam shakes Indian Railways

Contractor Shyam Bihari Agrawal had built a Rs.500 crore business empire in almost a decade.

He had control over 70% of the pantry car business in Indian railways.

He made the fortune after getting small catering contracts in railways with the help of some senior politicians and bureaucrats.

CBI said he got almost all contracts in premium trains like Shatabdi and Rajdhani.

In context: Rail Neer scam shakes Indian Railways

What is Rail Neer?

To provide train passengers with high quality yet affordable branded packaged drinking water, IRCTC had launched Rail Neer on 6 May 2003. The first Rail Neer plant was set up in West Delhi.

16 Oct 2015Rail Neer scam busted, Rs.27 crore seized

The Central Bureau of Investigation (CBI) busted a huge scam related to the supply of Indian railway's packaged drinking water known as Rail Neer.

CBI had conducted a search operation at 13 places in Delhi and Noida and registered a case against 7 private companies.

CBI recovered Rs.20 crore from the residence of the owner of these companies, the accused Shyam Bihari Agrawal.

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How did the Rail Neer scam work?

Modus OperandiHow did the Rail Neer scam work?

IRCTC was to provide Rail Neer to private caterers at Rs.10.50/bottle and the private caterers would be paid Rs.15/bottle for supplying them to passengers in premium trains.

However, Rail Neer was not supplied by caterers and instead cheap packaged water was distributed in premium trains.

This water is available in the market for Rs.6-7 and in this way, they earned huge profits.

17 Oct 2015Rs.4 lakh fake currency among seized money

Fake currency of Rs.4 lakh was recovered by CBI among the Rs.27 crore recovered from Railway caterers.

The agency said that Rs.1 crore was retrieved from Shyam Bihari's offices, while Rs.52 lakh were recovered from his CEO's residence.

CBI officials said that it took them 15 hours to count the money with the help of three counting machines.

17 Oct 2015Two railways officials suspended in scam

Two railway officials, Chief Commercial Managers (PS and Catering) of Northern Railway M S Chalia and Sandeep Silas, were suspended in relation to the Rail Neer scam.

CBI spokesperson said that the caterers did not pick up the alloted quota of Rail Neer in spite of several reminders.

The suspended officials are accused of not taking any action against them.

18 Oct 2015Contractor earned Rs.500 crore in Rail Neer scam

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Reactions Prabhu says no one will be spared

Union Railway Minister Suresh Prabhu said that immediate action will be taken against the accused and full transparency will be maintained.

Prabhu ordered a complete technical audit on Indian Railway Catering and Tourism Corporation (IRCTC) bookings so as to ensure the system was not manipulated.

A railway official said that the accused had many contacts and he got most of the contracts through them.

19 Dec 2015CBI chargesheets 2 former railway officials for Rs.19.5cr loss

The CBI filed a charge sheet against 2 Northern Railway officials, 9 private firms and others for allegedly causing a loss of Rs.19.5 crores by marketing sub-standard packaged water instead of Rail Neer.

The CBI slapped the charges of "criminal conspiracy, cheating and provisions of Prevention of Corruption Act".

The offenders had supplied bottles worth Rs.5-Rs.7 each while claiming reimbursements for Rs.15 per bottle.