Anti-Corruption Body Exposes Fixing of Tenders, Saves over Rs 80 Crores for Tamil Nadu

The government of Tamil Nadu cancelled a tender issued for the purchase ofToor dal for COVID-19 relief, saving almost Rs 80 crores to Rs 100 crores for the exchequer. The decision was made after an issue was raised by the anti-corruption organisation, Arappor Iyakkam (API), which has been continuously fighting against corruption and maladministration.

The organisation has been alleging several corrupt practices and tenders being fixed in favour of particular companies by different departments of the government of Tamil Nadu. The API has demanded action against the organisations and departments, which indulge in such activities resulting in severe loss for the exchequer.

While the API has welcomed the present move of the government, it has demanded much more to be done by the state government in bringing an end to collusion among companies and higher officials.

‘CANCELLATION SAVED CRORES FOR STATE’

A tender was floated on April 26 for the procurement of 20,000 metric tonnes of Toor dal by the Tamil Nadu Civil Supplies Corporation (TNCSC) worth Rs 566 crores.

Three companies participated in the tender, namely Kendriya Bhandar, Rasi Nutri Foods and NACOF, which was opened on May 5.

However, the API flagged the issues in the tender announced, pointing out that the three  firms are connected to a particular group of companies.

Jayaram Venkatesan, convenor of the API said, “For both Kendriya Bhandar as well as NACOF, Christy group of firms is the buyback supplier. Rasi Nutri foods is part of Christy group as well.”

A statement of the API reads, “The lowest bidder was NACOF quoting Rs 143.5 per Kg for Toor Dhal and Rs 139.5 for Canadian yellow dal. This is what fixing tender does as all of them quote way higher than the market price. The wholesale price of first quality Toor Dal is Rs 100 per Kg currently in Chennai. The rates are only around Rs 95 in district markets. Even in Government’s Amudham store, the retail price
of Toor Dhal is only Rs 106. While the retail price itself is Rs 106, why is the Government procuring the same Dhal for a wholesale price of Rs 143? This price of quoting Rs 40 to 50 per kg more than the market rate is currently resulting in a loss of Rs 80 to Rs 100 Crores for 20000 metric ton of Toor Dhal alone.”

After the API submitted its memoranda to the chief minister and other higher officials, the tender was called off. “The government has accepted certain demands on relaxing the conditions for better competition and pricing. The re-tender has resulted in a saving of around Rs 80 crores to Rs 100 crores,” Venkatesan added.

‘DECENTRALISE TENDERS FOR BETTER COMPETITION’

Though the API has welcomed the decision of the government in issuing a re-tender, the organisation is demanding more transparency and decentralisation of tenders.

“The government should encourage more competition by encouraging new competitors by relaxing certain norms. The practice of charging such competitors with 5% additional deposit was existing between 2007 and 2014 should be reintroduced,” Venkatesan said.

The API has also requested to decentralise the huge tenders by inviting district wise tenders. This could also bring an end to the big companies colluding together to fix a higher price for the goods.

“Such a decision would result in better competition, resulting in lower procurement cost for the government. Moreover, the small and medium traders could benefit from such decentralised tenders,” venkatesan added.

‘TAKE LEGAL ACTION AGAINST CULPRITS’

The practice of fixing tenders in the TNCSC has been continuing since 2014, the API alleged. The repeated submission of memoranda to the then Chief Minister and other higher officials fell on deaf ears, the API said.

“We have been reporting such fixing of tenders in favour of Christy group for the past several years. PSUs like Mines and Minerals Trading Corporation (MMTC) and State Trading Corporation (STC) were made to submit tenders by the Christy group, which acted as the buy back supplier for both. Such practices have not received the required attention from the government”, Venkatesan alleged.

The API has demanded black listing of six firms related to the Christy group along with MMTC and STC.

“The government has lost several crores of rupees due to the maladministration of the then food minister R Kamaraj and Sudha Devi, IAS, who is now transferred. The government should initiate action against the Christy group and all the officials involved in the scam,” Venkatresan demanded.

NewsClick tried to contact the companies but they have not responded to the queries.