Ponty Chadha's death may cost his group the Rs. 9,000-crore contract to supply food under the supplementary nutrition food programme in Uttar Pradesh.
Sources in the child development and nutrition department said, "To maintain his grip over nutrition supply, Ponty Chadha ensured that the contract was tailor-made for his company and the rivals were automatically eliminated. The technical bid that opened last week was finalised in the favour of Chadha's Great Value Food. However, his death has forced the state government to re-think."
A senior officer said, "The opening of the financial bid (the final approval for the contract) has been delayed." It indicates that new players might gain entry into the nutrition supply business at the cost of Great Value Food.
The UP government had finalised the contract in violation of the Supreme Court order of 2004, according to which only self-help groups, mahila mandals and village communities should be given contracts. Also, instead of annual tenders, the state government had decided to finalise the contract for three years.
Some firms supplying nutritious food in other states had challenged the tender before the Lucknow bench of the Allahabad high court. The matter is expected to come up before the court on Monday.
Chadha's firm had bagged the tender in 2009 too during the BSP regime.
His sudden death has also cast a shadow over the distribution of nutrition through 90,000 anganwari centres across Uttar Pradesh. Since 2005, Great Value Food has maintained its monopoly over the nutrition supply business in UP. As Chadha's network spreads across 75 districts in the state, very few companies can now fill the gap.
Sambhu Nath, the director of child development and nutrition department, said there will be no adverse impact on the distribution of nutrition among the children and pregnant women as the state government has already finalised the technical bid for the supply. "The company has assured the government that it would maintain regular supply of nutrition to all the centres in the state."
However, the ground reality does not reflect Nath's enthusiasm. The head of Kushati village in Barabanki district, about 40 km from Lucknow, Lalchand, said the supply of nutrition has dried up since October.
"I have lodged a complaint with the SDM but he told me that the private company that was supplying nutrition has put the supply on hold. The children and pregnant women who got regular nutrition at the centre are suffering," said Lalchand.