Presadio bags K-FON work order, amid accusations of Rs 500 crore budget inflation

The Leader of Opposition in Kerala, V.D. Satheesan, has accused the state’s ruling Left Democratic Front (LDF) government of inflating the cost of the Kerala Fibre Optic Network (K-FON) project by 50%. Satheesan has alleged that Presadio Technologies Private Limited, a company allegedly linked to Chief Minister Pinarayi Vijayan’s family, was a beneficiary of the inflated cost. Onmanorama, a Malayalam news portal, has estimated that the project could cost up to INR 600 crore more than the initial estimate of INR 1,028 crore. Satheesan has said that the scam in the K-FON project and the Artificial Intelligence (AI) traffic camera project was similar. ‘In both the scams, the players are almost the same. They form a cartel to corner the projects and then sub-contract the work to Presadio,’ he said. The Opposition has planned to release more documents and move the court challenging the contracts.

The Kerala government announced the K-FON project in the budget for 2017-18, with the aim of providing internet access to 20 lakh less privileged persons and 30,000 government offices across the state free of cost. Kerala State IT Infrastructure Limited and the state government’s power distribution company KSEB formed a joint venture to execute the project. The lowest bidder for the project was a consortium led by Bengaluru-based Bharat Electronics Limited (BEL), which bid INR 1,626.35 crore for the project, even though the government had only sanctioned INR 1,028.20 crore, an excess tender of 58% or INR 598 crore. SRIT Private Limited, which is linked to Uralungal Labor Contract Co-operative Society, was also part of the BEL-led consortium. SRIT had won the bid for the AI traffic cameras being implemented under the Safe-Kerala scheme. In February 2019, tainted IT Secretary M. Sivasankar wrote to the managing director of Kerala State IT Infrastructure Limited to issue the ‘letter of intent’ to the BEL-led consortium at the earliest, without waiting for a government order. The project was to be completed in 18 months.