The main contractor is Ajay Sancheti, a BJP member of the Rajya Sabha. According to the Congress, the entrepreneur has received sweetheart deals for his business empire on account of his proximity to the BJP president. Mr Gadkari has rejected those allegations. Earlier this week, he sued Digvijaya Singh for describing Mr Sancheti as his business partner.
Today, Mr Singh said that the letter about the Gosikhurd dam proves he is correct. Mr Singh said, "I have always been saying that Mr Gadkari is more of a businessman than a politician and I have been again proved right. It is an established fact that Mr Gadkari is not interested in any project, only contractors getting money which they don't deserve."
Reacting to NDTV's report, Mr Gadkari said he will write "not one but 15letters" in support of the the dam because it is an essential irrigation project for Vidarbha, a region devoured unforgivingly by drought and with the grim reputation as the farmer suicide capital of the country. "I will donate whatever wealth I have to anyone who can prove that I am linked to the contractors," the party's spokesperson, Prakash Javadekar, said, "When people in the opposition write letters it does not mean it is an order. Ultimately it is the government's prerogative."
In his letter to Mr Bansal, the country's Water Resources Minister, Mr Gadkari wrote: "The project works are in full speed. Due to non-payment of their dues the contractors stop their works. This may delay the project and would also result in time overrun and delays in creation of irrigation potential. Presently liability of about Rs. 400 crores is pending. It is requested to recommend the project to receive funds of the year 2011-12."
But before this petition, the dam being championed by Mr Gadkari had been blacklisted by several expert committees - its quality was declared poor, the costs of the project had escalated over two decades from 4,000 crores to 20,000 crores, and while the dam has been built, its network of canals to distribute the water to farms is not ready.
That's why funding for the project had been frozen, prompting Mr Gadkari to intervene.
The irrigation scam, according to the opposition and activists, was not sophisticated, despite the huge amounts of money involved: budgets for projects were busted several times, the government signed off on inflated contracts to benefit private companies who were often owned by people close to politicians. In some cases, despite escalated costs, the projects are nowhere near completion.
All those allegations were leveled at the Gosikhurd dam in Vidarbha, a project that was greenlit in 1983. In 2008, it was declared a national project, entitling it to funds from the centre. The Maharashtra unit of the BJP has said that dams like this one epitomize the crony capitalism and graft that guided those who conspired to loot the state. But Mr Javadekar today said that local BJP leaders have objected to irrigation projects run by the state government, not the Gosikhurd Dam.
For the Congress-NCP government in Maharashtra, the dam is strategically important partly because it is located in the constituency of Praful Patel, a union minister and senior leader of the NCP. Defending the expenditure on the dam is a political necessity.
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