A public interest litigation (PIL) has been filed in the high court against MTDC and senior officials regarding corruption worth several crores of rupees in the purchase of Volvo luxury buses and kiosks.

In another development, the Accountant General (AG), which reports to the Comptroller and Auditor General of India (CAG), has made harsh observations on the case as per a report in DNA.

dna had reported how initially MTDC had planned to buy five of the smaller Volvo 9400 coaches, for which the corporation had received a quotation for Rs 3.82 crore. However, five multi-axel Volvo buses were bought at a cost of Rs 5.41 crore instead, without even waiting for the feasibility report. M/s Fortress Infrastructure Advisory Services, which was the project consultant, was appointed at a fee of Rs 8.10 lakh. 

The AG, in an audit report for 2012-13, observes: "The consultant had reported that multi-axle Volvo buses would not be pliable on most routes in Konkan due to the single approach roads there, which are in bad condition, and the lack of manoeuvring space for vehicles like Volvo buses. In spite of this, the company (MTDC) opted for Volvo buses."

The petitioner, Dilip Ajgaonkar, has highlighted that the proposal for the five Volvo buses, received on October 11, 2012, was passed and the payment of Rs 5.41 crore released to Volvo Buses India Private Limited the very next day.

But as not one private operator came forward to operate these buses, they remained idle for over a year. They were then handed over to RMSS Buses Private Limited for being operated on other routes at a paltry Rs 75.5 lakh for five years. "At such a paltry compensation, MTDC will never be able to recover the amount it had invested. It's a waste of public money" said Ajgaonkar to DNA.

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