An unsavoury situation arose at the meeting of Haryana government's High-Powered Purchase Committee (HPPC) on Wednesday following an outburst by public health engineering (PHE) minister Kiran Choudhry over the delay in the supply of ductile iron (DI) pipes by private companies.
Sources said Choudhry was furious at the delay in supply of DI pipes by the companies through the rate contract system and gave a vent to her feelings during the meeting. “She even blamed the HPPC for the situation,” said an official present at the meeting. The PHE minister, however, was unavailable for comment and did not reply to a text message sent to her.
The minister, sources in the PHE department, said was piqued as the rate contract for purchase of DI pipes with an estimated value of Rs 300 crore was allotted to multiple fir ms in 2012 and many of the smaller players could not deliver the goods after the volume of the order was enhanced by ` 150 crore. The bulk of the supply — nearly 60% — was to be done by Jindal Saw Ltd.
When additional chief secretary (ACS), industries and commerce, YS Malik who is a member of the HPPC responded to her contentions in the meeting, the minister snapped at him. Malik then asked HPPC chairman, HS Chatha to excuse him from the proceedings as it was leading to an unpleasant situation, sources said.
Later, Chatha also expressed his inability to continue with the meeting in the absence of ACS (industries and commerce). A rapprochement, however, was struck and the meeting resumed where the rate contract indent of DI pipes worth Rs 550 crore was allotted to Jindal Saw Ltd. Chatha, too, did not take calls to respond to the Wednesday's developments.
Choudhry, an MLA from Tosham who faces assembly polls in couple of months, had earlier also expressed umbrage at the slow pace of development works in her home district, Bhiwani. Her outburst on Wednesday had political undertones.
Officials, however, said since the quantity of the DI pipe order was increased after three months of the award of the rate contract, the time period for the supply should have been expanded proportionately.
Sources also said the PHE minister probably also had a difference of opinion on the apportionment of the DI pipe order to multiple players. “Initially when the indent was first placed before the HPPC in 2012, it was decided that the entire order be allotted to one firm only — Jindal Saw Ltd. However, the matter was re-considered on the asking of finance minister, HS Chatha who is the HPPC chair man also.
Subsequently, the order was apportioned to multiple players as per the policy guidelines,” said an official.
WHAT ARE GUIDELINES ON RATE CONTRACT
The policy guidelines issued by the supplies and disposals department are amply clear on the rate contract system. The guidelines said the lowest bidder, which is called the L-1, may not have the manufacturing or supply capacity to execute the entire order or the indenting department may not consider it prudent to place the entire order on one single entity to minimise the risk or dependence on a single source of supply.
Regarding the bidding procedure, the policy guidelines issued by the supplies and disposal department in June 2013 said the price discovery for the rate contract shall be generally determined based on the rates quoted by the L-1 bidder and the negotiations, if any, held with the lowest bidder.
However, the rate contract negotiations could be held up to the L-3 (third lowest) bidder, if the difference between rate quoted by L-1 and those quoted by L-2 and L-3 was within 5% of the rate quoted by L-1.
Regarding the apportionment of the quantity of supplies, the finally deter mined L-1 bidder would be accorded due preference and the allocation of order may go up to 50% of the total ordered quantity subject to his offered capacity to supply. The balance order may be apportioned amongst the other bidder on the basis of their offered capacity to supply, past performance, etc., which the HPPC may decide on case-to-case basis.