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11 Jul 2017

US consultancy paid $1.18mn to NHAI to secure contracts

NHAI awarding contracts in exchange for money

A Boston-based firm has admitted to paying $1.18mn (Rs. 6.7cr) to officials of the National Highway Authority of India to secure contracts.

The company has, however, agreed to pay the entire profit amount of $4,037,138 (Rs. 25cr) to the US Treasury.

The US Department of Justice has closed the investigation. Meanwhile, NHAI said it would probe the matter to identify which officials took bribes.

In context

NHAI awarding contracts in exchange for money
What went on behind closed doors?


What went on behind closed doors?

During 2011-2015, the company CDM India paid Rs. 6.7cr to NHAI officials to "illegally obtain" highway projects as well as $25,000 for a water project contract in Goa.

"The bribes generally were 2-4% of the contract price and paid through fraudulent subcontractors who provided no actual services…," said the DoJ.

It added the CDM India senior management was aware of the ongoings.


CDM has replaced most India executives since then

CDM claims it self-detected the malpractices through internal investigations and self-reported them to the authorities. It will now pay the illegally-obtained profit to the US Treasury in four instalments by October 2017.

Since 2015, it has also replaced most of its India executives.

The NHAI will now probe the matter. This is yet another instance of money changing hands in highway projects.

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