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Crores gobbled in grain transport scam

chandigarh Updated: Feb 01, 2015 08:50 IST
Chitleen K Sethi
Chitleen K Sethi
Hindustan Times


In a major scam unearthed by the Punjab government, various grain procurement agencies of the state have been paying enormously high rates of transportation to the truck unions leading to a loss of Rs 1,000 - Rs 1,500 crore per year to the exchequer.

An internal investigation report submitted to chief minister Parkash Singh Badal last month has found that truck unions run by political leaders or under their active patronage command rates at which grain is to be transported from the mandis to the storage points. And the agencies, out of connivance or under pressure, are paying them rates that are several times higher than those being offered by individual contractors or those prevailing in the market.

While rules state that all government agencies should pay the same rate (lowest in the tendering process) for transportation in a mandi in a district, the variation in the lowest rates of transportation paid by one agency and the highest rates paid by another was as much as 350% in the wheat and paddy procurement seasons of 2012-2013. It went up to a whopping 550% in the wheat-paddy procurement done last year.

In 2013-14, during paddy procurement in Ludhiana alone, the agencies paid `11.36 crore more to the truck unions than they should have. The same year, for wheat, the agencies caused a loss of `10 crore to the exchequer on account of higher payments in just Ludhiana district.

Varied rates

Also, the agencies are not only paying the unions more than the market rate but also different rates for the same distance. Last year, during wheat procurement, Markfed alone paid rates as varied as Rs 8, Rs 11, Rs 22, Rs 48, Rs 51 to Rs 56 per quintal for the same distance of 12km.

Instances wherein the same agency paid different rates to the same contractor for the same distance have also come to light. While the CM has directed the department of food and civil supplies to ensure that the scam is not repeated this year, no action has so far been initiated against those responsible.

The contours

There are five government agencies involved in procurement of wheat and paddy in Punjab: Punsup, Pungrain, Punjab State Warehousing Corporation (PSWC), Markfed and Punjab Agro. The rates for transportation of grain from the mandis in a district are fixed through tendering undertaken by a district-level committee headed by the deputy director of the department of food and civil supplies. The lowest amount offered by a transporter is selected and has to be followed by all agencies at the mandi. But this rule is flouted blatantly.

In 2013-14 wheat procurement, transporters were paid rates ranging from Rs 8.5 (Markfed) per quintal to Rs 56.52 (Markfed) for the same distance of 12 km.

During paddy procurement, for the same distance of 14 km, Punsup paid Truck Union, Maloudh, Rs 31.95 while it paid Rs 34.04 per quintal to Truck Operator Union, Ahmedgarh. Markfed paid the Ahmedgarh union Rs 45.1 while Marked paid Rs 41.36 to the Jagraon Truck Operators Association. To private or individual transport contractors, Punsup paid Rs 12.75 per quintal and Markfed paid Rs 22.99.

In 2012-13, during paddy procurement, truck union contractors were from Rs 10.21 (Punsup) to Rs 46.36 (Markfed) per quintal for the same distance of 10 km. Punsup alone paid — for the same distance of 10 km from a mandi to a storage space — rates from Rs 10, Rs 18, Rs 20, Rs 25, Rs 32, Rs 35 to Rs 37.

Lower rates available

Last year in Ludhiana, the average rate at which the government paid truck unions was Rs 2.87 per quintal per km. In comparison, on occasions when these agencies hired individual transport contractors for transportation, the rate of payment was less than Rs 1 per km per quintal, less than half of what the agencies paid truck unions. The same year, during wheat procurement, these agencies paid the unions at the rate of Rs 2.79 per quintal per km, while individual transporters were offering a rate of 77 paise.

How it came to light

The scam was laid bare after the Punjab audit department in 2013 pointed out irregularities in the payments being made by agencies to transporters. The amounts paid for the same distance varied sharply. Following the letter from the audit, an investigation was undertaken by a government department for the 2012-2013 and 2013-2014 seasons in Ludhiana district, which has the largest mandi of the state at Khanna. In this district the probe unearthed a loss of over Rs 100 crore to the treasury on account of high payments made the truck unions for transportation and to the labour union for loading and stacking.

When contacted, Pungrain chairman DS Grewal (who was secretary, food and civil supplies, when the report was submitted) said stark changes in policy were being made this year. “The probe report was discussed at the level of the minister, but we were asked to look at ways in which the dominating role played by truck unions could be reduced. One of the options being mulled is a single rate across the state. The other is to ask arhtiyas (commission agents) to undertake transportation at a basic rate. Then the arhtiyas will deal with the truck unions.”

Tomorrow: Scam extended to labour and cartage

Paddy 2013-14

Agency Rate per quintal Contractor (in Rs) variation

TRUCK Unions (Distance 11 km)

Markfed 15.28 Truck Opt Union, Ahmedgarh
Punsup 22.94 Truck Opt Union, Sahnewal
Pungrain 32.24 Jagraon Truck Opt Association
Pungrain 34.44 Jagraon Truck Opt Association
Markfed 38.79 Hathur Truck Opt Association
Markfed 38.79 Jagraon Truck Opt Association
Markfed 39.58 Jagraon Truck Opt Association
Markfed 47.90 Truck Opt Union, Ahmedgarh
Punsup 50.97 Truck Opt union, Ahmedgarh

Distance 14 km

Punsup 31.95 Truck Operation Union, Maloudh
Punsup 34.04 Truck Operation Union, Ahmedgarh
Markfed 41.36 Jagraon Truck Opt Association
Pungrain 42.40 Jagraon Truck Opt Assocation
Pungrain 42.40 Jagraon Truck Opt Association
Markfed 45.00 Truck Opt Union, Ahmedgarh
Markfed 45.10 Truck Opt Union, Doraha

Private contractors (Distance 14 km)

Punsup 12.75 Jagdish Lal s/o Devi Chand
Pungrain 12.75 Kewal Kumar s/o Ram Dass
Markfed 22.99 Jagtar Singh s/o Ajit Singh, Lalton

Wheat 2013-14

Agency Rate per quintal Contractor (in Rs) variation

TRUCK Unions (Distance 8.5 km)

Pungrain 23.15 Truck Operators, Sahnewal
Punsup 25.88 Jagraon Truck Opt Association
PSWC 30.32 Truck Operator Union, Malaud
Pungrain 41.04 Truck Union, Raikot

Distance 10 km

Markfed 17.05 Truck Operator union, Mullanpur
Punsup 20.49 Hathur Truck Opt association
Punjab Agro 22.67 Truck Union, Raikot
Pungrain 32.45 Truck Operators, Sahnewal
Punsup 32.79 Truck Opt Assocation, Mullanpur
Markfed 50.41 Jagraon Truck Opt Association, Jagraon

Distance 12 km

Markfed 22.85 Truck Operation union, Machhiwara
Pungrain 29.97 Truck Opt Association, Mullanpur
Pungrain 36.40 Truck Opt Union, Ahmedgarh
PSWC 39.58 Jagraon Truck Opt Association
Punsup 41.93 Truck Union, Raikot
Pungrain 44.16 Jagraon Truck Opt Association
Markfed 48.15 Truck Operator Union, Raikot
Markfed 51.00 Truck Opt Union, Ahmedgarh
Markfed 56.52 Truck Opt Union, Ahmedgarh