US firm paid Rs 1.2 million bribe to NHAI

Washington: A Boston-based construction engineering firm allegedly paid $1.18 million bribe to officials of the National Highway Authority of India between 2011 and 2015 to bag contracts, the US justice department has said, prompting the Indian government to order a probe into the allegations.

The criminal division of the justice department, in a letter dated June 21, said CDM Smith through its employees and agents, and those of its wholly-owned subsidiary in India (CDM India) paid approximately $1.18 million in bribes to government officials in India in exchange for highway construction supervision and design contracts and a water project contract resulting in approximately $4 million in net profits.

Between 2011 and 2015, employees of CDM Smith’s division responsible for India operations and CDM India illegally paid bribes to NHAI officials in order to receive contracts from them, the justice department said in the letter to CDM Smith.

“The bribes generally were two-four per cent of the contract price and paid through fraudulent subcontractors, who provided no actual services and understood that payments were meant to solely benefit the officials,” it said.

In addition, CDM Smith’s division responsible for India and CDM India paid $25,000 to local officials in Goa in relation to a water project contract, the justice department said.

“All senior management at CDM India (who also acted as employees and agents of CDM Smith and signed contracts on behalf of CDM Smith, including CDM India’s country manager) were aware of the bribes for CDM Smith and CDM India contracts, and approved or participated in the misconduct,” it said.

Road transport and highways minister Nitin Gadkari has taken a serious note of the allegations and asked the NHAI chairman to hold an inquiry, a ministry official said.

Meanwhile, the probe by the department of justice has now been closed after CDM Smith agreed to disgorge $4 million, which the Boston-company earned as profit due to the bribery.