iconimg Tuesday, July 07, 2015

Vishal Rambani, Hindustan Times
Patiala, September 08, 2013
In a major tendering irregularity, the Punjab State Power Corporation Limited (PSPCL) is set to pay Rs. 438 crore more than its base rates for tenders allotted under the Restructured Accelerated Power Development and Reforms Programme.
As per the PSPCL base rates, the tenders should have been around Rs. 1,280 crore or less, but it now has to pay Rs. 1,718 crore. In an apparent effort at a cover-up, the PSPCL has increased its base rates by 25%.

The PSPCL has itself admitted that the rates quoted by the firms are much higher than its base rate, according to confidential documents accessed by Hindustan Times.

Due to the clubbing of tenders, which ended competition, the PSPCL got quotes worth Rs. 1,802 crore, almost 50% higher than the base rates. The PSPCL then decided to increase its base rate, apart from advising companies to offer rebates on the initial offer. While the PSPCL increased its base rate by 25% (Rs 285 crore), the companies offered a rebate of Rs. 85 crore from the initial offer.

"From the floating of tenders to the final decision to allot tenders, everything was dubious.

Instead of getting a rebate, the PSPCL is set to pay 30% more. The PSPCL chairman-cum-managing director (CMD) must justify why the base rates have been increased by 25%. Such practice is not prevalent in any department of Punjab," said a PSPCL management official, requesting anonymity.

In this 'loot of public money', M/s A to Z Maintenance & Engineering Services Limited, Gurgaon, is the biggest beneficiary as it has got the tender for Rs. 331 crore, almost 50% more than the PSPCL base rate (Rs 223 crore). Though this firm has got the smallest chunk in the tenders, it is the biggest gainer in terms of profit. Larsen & Toubro has got the maximum works, worth Rs. 1,000 crore.

All companies, be it A2Z, L&T or M/s Godrej, have got tenders much above the base rates.

All India Power Engineers Federation chairman Padamjit Singh said, "Tenders should be scrapped and fresh tenders be called. The CMD must come clean on this issue as he is passing the buck on to junior officials." He said the AIPEF would approach the Power Financial Corporation (PFC), the funding agency. "After all, it is the taxpayer's money and it should be properly utilised," he added.

Punjab State Electricity Board Engineers Association president Baldev Singh Sran said the tendering process was flawed, adding that the association had already raised an objection in this regard with the PSPCL through an official communication.