In a long delayed action, Kerala govt bans PwC from all its IT projects

Opinion | PwC's shady record and lessons from its Kerala flop show
A view of the sign outside the PwC office by London Bridge in London. Photo: Shutter Stock

It was on July 17 that that M Sivasankar, the former principal secretary to the Kerala chief minister, was suspended for going out of his way to get the gold smuggling accused Swapna Suresh the job of 'operations manager' at Space Park under Kerala State Information Technology Infrastructure Limited (KSITIL).

And now, nearly five months later, the IT Department has issued an order banning PricewaterhouseCoopers (PwC), the consultancy Sivasankar used to put Swapna in a crucial government position, from all projects undertaken by the IT Department for the next two years. The order specifically states that the PwC has been slapped a two-year ban for its failure to conduct enough background checks before appointing a candidate at Space Park.

The PwC, in short, has finally been punished for colluding with Sivasankar. "This is a serious breach of contractual obligation on the part of the PwC," the order, issued on November 27, stated.

The PwC's consultancy for Kerala Optic Fibre Network (KFON) has also been terminated. The term of its KFON consultancy expires today (November 30) and the order stated that it would not be renewed. KFON is also closely linked to Sivasankar as it is widely believed to be his brainchild. It is Sivasankar's interest in the project that has prompted the Enforcement Directorate (ED) to bring the project under its scanner.

The long delay in acting against PwC was already triggering uncomfortable questions. It is notable that when doubts regarding Swapna's appointment first surfaced, the government had sought to heap the blame squarely on PwC.

Official sources said that the appointment was made by an agency (Vision Technologies) appointed by PwC. PwC had even publicised Swapna's 'verification report', which was said to be done by its sub-agency and which, in turn, said that Swapna had no case pending against her in any courts in the country.

This was patently wrong as the Crime Branch had taken a case against her for forgery in a sexual harassment case and the issue was under the consideration of the High Court.

Earlier, the LDF government had terminated PwC's consultancy for the E-Mobilty project. Opposition leader Ramesh Chennithala had alleged that the government had used PwC to award the Rs 4,500-crore E-Mobility project to HESS, a Swiss Company.

Chennithala said PwC had to be roped in because a joint venture of HESS and government-owned Kerala Automobiles Limited (KAL), with controlling stake for the foreign company, had to be called off after the then Chief Secretary Tom Jose and additional chief secretary (finance), with the approval of Finance Minister T M Thomas Isaac, had opposed the deal. As part of the E-Mobility project, there was also a plan to open an office for PwC inside the Secretariat. This was later dropped.

It was said that the HESS deal, too, was orchestrated by Sivasankar.

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