SHILLONG, July 19: The Hynniewtrep Youth Council (HYC) on Tuesday wrote to Union Cabinet Secretary Rajiv Gauba, demanding a CBI inquiry into the alleged irregularities in the implementation/award of contract under the “Saubhagya Scheme” in the state.
In a letter addressed to him, HYC general secretary Roy Kupar Synrem said the implementation of the scheme was marred by allegations of corruption, manipulation, favouritism and inflation of rates.
“However, the state Government had time and again refuted and rejected the allegations in this regard. The RTI information received on July 13 from the MeECL found that there are serious remarks and observations coming from a Constitutional authority of the audit from the office of the CAG,” Synrem said.
He said the audit team had pointed out various irregularities in the implementation of the scheme, including undue favours given to a particular company.
“The Meghalaya Power Distribution Company Limited (MePDCL) submitted DPRs for Khasi and Jaintia Hills District and for Garo Hills District for a total project cost of Rs 508.48 crore. The Government of Meghalaya (GoM) decided to issue a tender on 10 September, 2018 and split the work into two packages – Package A (Khasi and Jaintia Hills districts) and Package B (Garo Hills districts),” Synrem said.
According to him, tenders were floated and 4 bidders took part in the bidding process. On opening of the financial bids of the two qualified bidders (December, 2018), it was found that their bids were 55 and 59 per cent above the estimated cost.
He said Gauba in a meeting held on December 14, 2018 had suggested the officials of the GoM/MePDCL to execute the work departmentally in view of the rates quoted by the bidders above the estimated cost. He said the GoM concurred with the same and advised the MePDCL to comply with the directives of the Cabinet Secretary.
“However, the MePDCL went against the direction of the Cabinet Secretary and after negotiation with the two bidders, decided to allot the works at the rates which are 50 and 54 per cent above the estimated cost to M/s Satnam Global Infraprojects Ltd for Package A at a cost of Rs 173.60 crore and M/s Onycon Enterprises for Package B at a cost of Rs 179 crore,” Synrem said.
On examining the Tender Evaluation Committee (TEC) proceedings, he said the audit observed that the tender was floated on September 26, 2018 and the last date of submission was October 4, 2018, which was subsequently extended to October 17 the same year.
“Given the nature of work which was large and complex and the cost running into hundreds of crores, a lot of spadework was required before submission of bids. But due to the abnormally short time given, only four contractors participated in the bidding process. Thus, the purpose of floating global tenders to give wide publicity and generate sufficient competitions is defeated, leading to the award of contract at very high rates,” the HYC general secretary said.
He said it was found that a specific clause in the Bidding Document was deleted on October 9, 2018. It stipulates that in case the quoted price is found to be 10 per cent below or above the estimated cost of the package, the bid would be treated as non-responsive.
“As per the guidelines of the scheme, any changes which are state-specific can be made after the approval of the State Level Standing Committee (SLSC). However, in the instant case, the decision to delete the said clause was taken by the Empowered Committee (Tender) of MePDCL, which had no authority to do so. This act led to an award of contracts at abnormally higher rates, which otherwise should have been summarily rejected. This proves that undue favour was given to M/s Satnam Global Infraprojects Ltd and M/s Onycon Enterprise,” Synrem said.
He also stated that had the MePDCL executed the work departmentally or explored the options to award the work to the existing contractors under DDUGJY, it could have avoided awarding the work at 50 and 54 per cent above the estimated cost. Thus, by awarding the works at abnormally higher rates, the MePDCL had to incur avoidable expenditure of Rs 149.81 crore, he said.
Claiming that undue favours were shown in the award of work for package B, he said the audit team noticed that contract was awarded in contravention of Clause 1.01 Part II in Annexure A to BDS of Volume-I (Section-III) and particularly Clause 1.02.1 (Commercial) in Annexure A to BDS of Volume-I (Section-III) by deleting the words “similar nature” from Clause 1.0.
The HYC general secretary further said M/s Patel Engineering in JV with Onycon Enterprise, which was awarded Package-B (Western Region), had submitted a Performance Report from Maharashtra State Electricity Distribution Co. Ltd. for supply, installation, testing and commissioning of new sub-stations, augmentation of existing substations, power transformers, distribution lines, etc valuing Rs 106.95 crore as proof of having executed work of similar nature.
According to him, an audit of records revealed that the work executed included the laying of 252 km of underground distribution lines.
“Accepting the work of laying of underground lines as similar to the tendered work was questioned on 4th December, 2018 by M/s Techno Electric and Engineering Co. Ltd which stated M/s Patel Engineering had only executed underground cabling works and thus, did not meet the qualifying requirement and their bid should be rejected. The MePDCL sought replies from M/s Patel Engineering to the objection raised by M/s Techno Electric and Engineering Co. Ltd but it was found that there was no record of any reply made by M/s Patel Engineering to justify the same,” Synrem said.
He said the post-tender amendment of deleting Clause 1.02.1 (Commercial) in Annexure A to BDS of Volume-I (Section-III) had benefitted JV partner M/s Patel Engineering and ONYCON which, otherwise, would have been ineligible for award of work.
Synrem further observed that Patel Engineering received undue favour for executing ‘similar works’ without proper evaluation of the supporting documents needed for the qualifying bidder.
In fact, this particular contractor had even abandoned 50 per cent of the work allotted and further delayed the completion of the scheme, the HYC leader said.
According to him, the relaxation of amount of performance security in respect of turnkey contractors of Saubhagya was Rs 32.74 crore.
“The MePDCL had followed the standard rate i.e. 10 per cent of performance security while tendering for works under DDUGJY. However, for Saubhagya, it was reduced to 2.5 per cent based on a decision taken on 25th September, 2018 by the Empowered Committee (Tender), an internal Committee of MePDCL…
“As per the guidelines of the scheme, state-specific changes can be made only after the approval of the SLSC which was not taken in this case. This is a serious lapse on the part of the MePDCL in relaxation of Performance Security without approval of the competent authority to an amount of Rs 32.74 crore,” Synrem said.
He said the examination of Bills passed by the MePDCL against supply of materials for Saubhagya scheme revealed that an amount of Rs 1.02 crore was paid towards insurance charges.
“However, records of Insurance policy involving premium paid of only Rs 59,000 was on record (M/s Satnam Global paid nothing as premium and M/s ONYCON paid Rs 59,000) . Hence, it is found that payment of Insurance charges amounting to Rs 1,02,67,395 was paid to M/s Satnam Global and M/s ONYCON illegally,” Synrem said.
He mentioned that the state government vide its notification dated 30th June, 2021 was pleased to constitute an independent inquiry to look into the various matters pertaining to the MeECL and its subsidiaries as per the given terms and references.
Synrem said the terms and reference of the inquiry committee does not include the criminal aspects as can be seen in the observation and records.
“The observations made by the audit team of the CAG is very serious and cast a doubt on the proper and clean implementation of the Saubhagya scheme in the state and hence, requires an investigation by the CBI exclusively to initiate appropriate actions as per the law against anyone found guilty of an offence,” the HYC general secretary said.
He urged Governor Satya Pal Malik and the Union Cabinet Secretary to intervene and direct the state government to give consent and initiate an inquiry by the CBI into the various irregularities/illegalities in the implementation of the Saubhagya Scheme since it is centrally-funded.
