‘MTC showered undue favours on vehicle firm’

SHILLONG: City-based business dealer, M/s Modrina Auto Enterprises has come under the scrutiny of the Comptroller and Auditor General (CAG) as the Meghalaya Transport Corporation (MTC) has directly purchased readymade buses from the dealer without calling tender. The Board of Directors of the MTC decided to do away with the existing system in April, 2005 and opted for purchase of readymade buses without inviting tenders. The decision of the MTC Board of Directors to dispense with the existing system was questioned by the CAG as the Corporation could not explain the benefits availed under direct purchase from the dealer. The Chairman had commented in February 2012 that if tender had been invited, there would have been more offers from manufacturers with competitive bidding and that would provide transparency in the procurement of vehicles. According to the CAG report, the Corporation, however, continued to purchase (since 2005-06) readymade buses directly from the dealer without inviting competitive tenders.  During the period from 2010-11 to 2014-15, the Corporation purchased total 29 vehicles (Tata buses) costing Rs 4.43 crore from the said dealer.
Further the CAG observed that the Corporation procured (April 2012 to March 2015) a total of 29 vehicles from the dealer without inviting competitive bids or even negotiation with the dealer at an aggregate cost of Rs 4.43 crore, and thus, lost the opportunity to avail the benefits of competitive bidding or direct purchase from the manufacturers.
The Corporation issued (March 2012) a Purchase Order (PO) in favour of the dealer for supply of five numbers of Tata Marco Polo buses and six numbers Deluxe Tata buses at an aggregate cost of Rs 2.43 crore which were to be delivered within 60 days and 90 days after payment of advance respectively as per the PO agreement.
In case of default in delivery of vehicles within the agreed period, a penalty of Rs 3,500 per vehicle was recoverable from the dealer for each day of delay in delivery. The Corporation on March 14, 2012 paid advance amount of Rs 2.17 crore against supply of these vehicles.
As per the agreement, the actual delivery should have been completed by May 14, 2012 and June 14, 2012, respectively.
However, the audit observed that all the 11 vehicles were delivered by the dealer after delay ranging from 105 to 169 days. The Corporation, however, did not recover the penalty of Rs 48.86 lakh from the dealer as per the terms of the PO despite delay in delivery of buses thereby extending undue commercial favour to the dealer.
The Corporation, stated in a reply in November 2015 that buses were procured by inviting quotation from the dealer of Tata Motors which was the only manufacturer having wide spread network of sales and services in the State.
As to the delay in delivery of buses, the Corporation said it was due to painting of the Corporation’s colour scheme and logo besides unfavorable climatic conditions.
In this connection, the CAG was not satisfied with the reply as the PO was for delivery of complete readymade buses within 60/90 days, hence the contention that delay was due to painting of logo and colour scheme was not tenable.
Moreover, the CAG indicated the presence of other dealers which include Ashok Leyland, Force Motors, etc., in the State and observed that the Corporation should have preferred competitive tendering rather than purchasing the vehicles from a single dealer so as to avail the benefits of competitive pricing and after sales services.

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