HindustanTimes Sun,20 Apr 2014

Haryana wants CBI to probe work order under Khemka

HT Correspondent, Hindustan Times  Chandigarh, January 18, 2014
First Published: 13:50 IST(18/1/2014) | Last Updated: 21:53 IST(18/1/2014)

Haryana government has decided to ask the Central Bureau of Investigation (CBI) to probe the allotment of Rs. 18.04-crore work orders for installing galvalume roofing sheets on warehouses to an Ahmedabad-based company, M/s Proflex Systems, by Haryana IAS officer Ashok Khemka during his tenure as managing director, Haryana State Warehousing Corporation (HSWC), in 2009. The agriculture department had cited irregularties in the tendering process in a 2013 communication to Haryana chief secretary.


Chief secretary SC Choudhary said a complaint was received on August 9, 2013, and forwarded to the agriculture department, which prima facie found truth in the allegations and recommended an independent probe.

The state home department will now make a reference to this effect to the secretary, department of personnel and training (DoPT) in Government of India, giving its consent under Section 6 of the Delhi Special Police Establishment (DSPE) Act, 1946, for extension of powers and jurisdiction of CBI to Haryana for investigating the case under Section 5 of the DSPE Act.

While Haryana agriculture department had recommended a probe by the state vigilance bureau into the matter, chief minister Bhupinder Singh Hooda has opted for a probe by the central investigating agency.
A series of news reports on the recommendation of the vigilance probe was carried by the Hindustan Times in the first week of December.

Recommending a vigilance probe, principal secretary of agriculture (PSA) Roshan Lal, in a November 18, 2013 communication to chief secretary, had said that there appeared to be a lot of weight in the allegations made by the complainant. "Khemka as MD of HSWC took the board of directors (BoD) for granted by keeping it in dark about the introduction of a new technology - galvalume roofing sheets, a major policy decision requiring the prior approval of the board.  Tendering process was vitiated once the specifications mentioned in the tender notice were changed after the pre-bid meeting. No cost analysis based on market survey was done to ascertain whether the rate of `1,127 per square metre was lowest or not," the communication said.

The modus operandi of giving repeat orders worth crores to Proflex without inviting fresh tenders for discovering latest market rates is also against established norms of tendering, it said. "It rather points to a criminal nexus between Khemka, HSWC executive engineer Vaneet Chawla and Proflex. Prima facie this points to a scam in the allotment of repeat work orders to the same party for extraneous considerations," the communiqué read.

Board of directors kept in dark

The PSA wrote that while on February 18, 2009, Khemka had already placed the order for galvalume roofing sheet at his own level prior to the board meeting (held on March 25, 2009), yet he did not disclose in the agenda about the work orders worth crores already allotted."

"This way he tried to legitimise the irregularities committed by him in introducing a new technology," the communication read.

"It is surprising that material information about the allotment of roofing work before the meeting of HSWC noard was concealed from the board of directors (BoD) and a general agenda to use galvalume sheets in place of conventional asbestos roofing in 'future' was placed before the board," it said.

"The very fact that the matter regarding use of galvalume sheets in place of conventional asbestos roofing for construction of godowns in future was included by Khemka in the agenda of 176th HSWC board meeting on March 25, 2009, showed the IAS officer was aware that such a major policy decision needed the prior approval of the BoD."

But Khemka had already placed orders worth `7.93 crore on February 18, 2009, at his own level without approval of the board and this agenda item was only an attempt to camouflage his irregular and unauthorised action," said PSA in his communication.

Agenda first withdrawn and brought again

Also, this agenda item placed before the BoD on March 25, 2009, was withdrawn which meant that the board's approval for switching over to the new technology was still not granted. "It continues to be an enigma as why this agenda item piloted by Khemka himself was withdrawn during the meeting itself without any specified reasons. The possibility of BoD not being favourably inclined about the proposal to use new technology cannot be ruled out," the communication said.

"The agenda item was again placed before the BoD on Dec 21, 2009, after the transfer of IAS officer Shakuntla Jakhu as chairperson of HSWC in May 2009. A perusal of the agenda item reveals that it nowhere mentioned that this item was placed and withdrawn in a board meeting of March 2009. Nor did it specifically mention that HSWC had already placed orders for the galvalume roof sheeting on two separate occasions. It is difficult to understand as to why this was done," the PSA wrote in his comments.

The BoD on December 21, 2009, gave an "in-principle" approval of the new technology subject to comparative field study of health of food grains stored in the conventional asbestos cement sheet godowns and galvalume sheet godowns, and advice of Central Warehousing Corporation. " However, the decision of BoD cannot be construed to have validated or ratified the irregularities committed in adoption of the new technology without due diligence and allotment of work without following due procedure," said PSA's communication to chief secretary.

Probe on a complaint

The department, which sent its comments following a complaint by one Ravinder Kumar of Panchkula, said the BoD in 2008 approved the construction of godowns of 61,000-metric-tonne (MT) capacity using the existing technology of ACC sheets. The then MD undid the spirit of the BoD resolution by adopting a new technology which was yet to be tested in the country. "He was not competent to change the decision of the BoD at his own level by switching over to a new technology without BoD's or government nod," it said.

Since the technology was new, it would have been prudent to get a comparative study regarding the cost-benefit ratio of both the technologies done. "Adverse effect of asbestos sheets on health and storage were examined on the basis of literature available on Internet and informal consultations through private operators. No studies to substantiate the said claim are available in the HSWC record. The specifications of galvalume sheets available in India were not studied."

"It appears that Khemka was in tearing hurry to introduce the new technology at his own level without following the due procedure and without exercising due diligence….," the department note said.
Tender conditions under scanner

The condition of tender notice - the quantity may increase or decrease upto any extent - defied all logic and invaded the established norms of tendering procedures. It can also be a pointer to some hidden agenda to subsequently favour the successful tenderer, it said.

"In the tender notice, it was mentioned that imported galvalume sheets would be used whereas during the pre-bid meeting imported galvalume sheets of only Dong Bu brand of South Korea were mentioned which is against norms of tendering procedure and seems to have been done only to favour Proflex,'' the note said.

Additional work allotted with fresh tendering

The department also pointed out that Khemka allotted additional works for construction of godowns to Proflex for Rs. 1.01 crore without calling fresh tenders and making fresh discovery of market rates.

"Strangely, even after this agenda item on galvalume roofing was withdrawn from BoD meeting on March 25, 2009, a day later Khemka as then HSWC managing director allotted additional works for construction of godowns at Nigadhu, Uchana and Kheni Kalan to the same company, M/s Proflex Systems, for Rs. 1.01 crore without calling fresh tenders and without making a fresh discovery of market rates. The fresh allotment was another violation of established norms and procedures of tendering," wrote Roshan Lal.

It is intriguing that Proflex was awarded three straight allotment orders without calling fresh tenders to the tune of Rs. 1.01 crore in March 2009, February 2010 and April 2010. This prima facie indicates that undue favour was shown to Proflex on extraneous considerations. The modus operandi of giving repeat orders worth crores to Proflex without calling fresh tenders for discovering latest competitive market rates is against the established norms of tendering procedures. Prima facie it points to a scam in the allotment of repeat work orders to the same party on extraneous considerations.

Charges and probes faced by Khemka
Sept 13, 2013: Haryana asks state vigilance bureau to initiate probe against Khemka for alleged irregularities in purchase of 10,000-quintal moong (green gram) during his tenure as managing director of Haryana Seed Development Corporation (HSDC)
Oct 5, 2013: Haryana decides to chargesheet him for major penalty for administrative misconduct, overstepping jurisdiction in cancelling mutation of land deal between Robert Vadra and DLF in Gurgaon and indulging in public criticism of actions by the state government. The charge sheet was formally issued on December 4.
Oct 17, 2013: Haryana decides to chargesheet Khemka for minor penalty in case of alleged low sale of wheat seeds during his tenure as managing director, HSDC
Nov 18, 2013: Haryana agriculture department recommends vigilance probe in work order allotted to an Ahmedabad-based company for installing galvalume roofing sheets.
Jan 2014: Chief minister orders probe by the CBI
On the other side

Oct 18, 2013:
CBI registered a preliminary enquiry (PE) on a complaint by Khemka in which he alleged that the National Cooperative Consumers' Federation (NCCF) and National Agriculture Cooperative Marketing Federation (NAFED) had sold wheat seeds at inflated prices to HSDC

Khemka's reaction
Haryana IAS officer Ashok Khemka had told HT through an e-mail on December 3, 2013, that the allegations were motivated and deliberate, and aimed at character assassination by vested interests in the political executive and bureaucracy who were completely exposed in land-licensing and seed scams. These allegations can be answered only after access to the relevant records in HSWC, Khemka had said.

"I was in HSWC from July 11, 2008, to April 23, 2010. As far as I remember, the use of galvalume sheets was approved by the HSWC BoD sometime in 2009, when Roshan Lal was the chairman. The use of galvalume sheets was also reviewed in a meeting by the chief secretary sometime in November 2009. HSWC was the first mover to replace asbestos cement sheets in the roofing of food storage godowns to make the food safer to consume by citizens. The use of galvalume sheets in food storage godowns was studied by IIT-Delhi and there is a very positive finding. The case was also referred to CWC and the food ministry by the state agriculture department. On such reference, the use of galvalume sheets is now mandatory by an order dated May 30, 2013 of FCI for roofing in new godowns for storage of food grains," his reply read.

Crucial aspects to be probed

In the tender notice, it was mentioned that imported galvaume sheets would be used, whereas during the pre-bid meeting imported galvalume sheets of only South Korean Dong Bu brand were mentioned, which was against the norms of tendering procedures and seems to have been done only to favour /s Proflex Systems on considerations other than merit.

Creates serious doubts about motive of accepting only Korean brand sheets without undertaking any study about such sheets being manufactured in other countries. Even in Korea, some companies other than Dong Bu manufactured galvalume sheets about which no survey was conducted by warehousing corporation.

Proceedings of the pre-bid meeting were signed by three tenderers - Proflex, Nexus Infratech and DRS Roof and Infrastructure. Of them, Nexus Infratech was ineligible as per the tender notice as it did not have the requisite two-year experience. Dong Bu was selected only on request of two tenderers who dictated their terms. Acceptance of this was a clear violation of notice inviting tender (NIT) and appears to have been done on extraneous considerations.

A fresh tender should have been called after the change of specifications in the pre-bid meeting on January 28, 2009, to provide a level playing field to all the prospective tenderers.
The parties were asked to offer financial bids after the pre-bid meeting in which specifications mentioned in the tender notice had been altered significantly without any justification.

Formal orders for allotment of work to the tune of `5.9 crore were issued on April 23, 2010 - two days after the transfer of Ashok Khemka from the post of MD, HSWC. The IAS officer did not relinquish the charge till `5.9-crore work orders in favour of Proflex were issued. The orders for this on file though were approved by Khemka on April 19, 2010, the possibility of backdating these orders can't be ruled out.

HSWC gave a major concession to Proflex while placing work orders on Feb 5, 2010, and April 23, 2010, by waiving the condition of 2 % earnest money deposit (EMD) and replacing the retention of 20% payment by a bank guarantee. HSWC would suffer loss on account of interest due to change or terms and conditions in work orders.

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