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‘No major infirmity’ in purchase of low-floor AC buses, says LG panel

A probe committee appointed by Lieutenant Governor Anil Baijal has given a clean chit to the Delhi Transport Corporation (DTC) over the tendering and procurement of 1,000 air-conditioned (AC) low-floor buses -- an issue that was a bone of contention between the ruling Aam Aadmi Party (AAP) government and the Delhi unit of the Bharatiya Janata Party (BJP), which alleged corruption in the process
By Sweta Goswami, New Delhi
PUBLISHED ON JUL 09, 2021 11:55 PM IST

A probe committee appointed by Lieutenant Governor Anil Baijal has given a clean chit to the Delhi Transport Corporation (DTC) over the tendering and procurement of 1,000 air-conditioned (AC) low-floor buses -- an issue that was a bone of contention between the ruling Aam Aadmi Party (AAP) government and the Delhi unit of the Bharatiya Janata Party (BJP), which alleged corruption in the process.

The three-member panel, however, recommended floating fresh tenders for its annual maintenance contract (AMC) over what it described as “procedural lapses” arising out of a “bona fide decision-making process”.

The report submitted to the L-G this week -- HT has reviewed portions of it -- stated that the committee, prima facie, did not find criminal misconduct by any public official.

“The tendering process of purchase of buses warrants no interference and suffers from no major infirmity... The committee, prima facie, did not come across any material to impute criminal misconduct attributable to any public official,” the report said.

“There were only procedural lapses apparently arising out of a bona fide decision making process. However, a greater effort for understanding the market and a higher degree of due diligence in assessing reasonableness of bids was required compared to what seems to have been demonstrated,” it added.

“…In light of the findings outlined above, the committee recommends that the bid for AMC of buses be scrapped,” the panel, said while giving four recommendations.

These included either going for a fresh bid, asking DTC to develop and strengthen in-house capabilities to maintain these buses, suggesting that a fresh bid could be floated for a turnkey operation and maintenance contract for these buses as against a simple AMC contract, and recommending that DTC could rope in experts to design suitable variants of all the stated options.

DTC comes under the Delhi government.

The panel urged the government take a decision soon based on its recommendations soon, so that there was no gap between the arrival of new buses and their operations. Delhi currently has at least 6,600 buses against the requirement of 11,000 buses, as mandated under various court orders.

Bone of contentionIn March last year, DTC floated a tender for procurement of 1,000 CNG low-floor buses, issued another tender for allotting the AMC for these buses four months later. The BJP-led opposition in the Delhi assembly, raising the issue this March, contended that the AMC should have been included in the same tender meant for procuring the buses on the grounds that it would have been cheaper.

The Delhi government was spending 875 crore in the procurement of the 1,000, buses and the AMC, as per the second tender, was costing the DTC 3,500 crore. To be sure, the purchase is a one-time expense, and the maintenance contract is valid for 12 years.

Eventually, BJP leaders led by Rohini MLA Vijender Gupta, filed a complaint with the city’s anti-corruption bureau (ACB) and the LG.

On June 11, the Delhi government put on hold its plan to procure these buses through the DTC, saying it was open to investigation.

On June 16, the state vigilance department, on the direction of LG Baijal, constituted a three-member committee headed by former bureaucrat OP Aggarwal. The other two members were principal secretary (vigilance) KR Meena, and transport commissioner Ashish Kundra.

The committee, in its report, said that the tender for procurement of buses “warrants no interference”.

Suppliers’ marketAt the same time, it noted that there were some deviations from the process outlined in the General Financial Rules (GFR) and Manual for Procurement of Goods in tendering for the AMC. “While separate bids for purchase and AMC can be justified with a view to get greater competition and a larger number of bids, the efforts made to get more bids is not apparent. In fact, the eligibility criteria do appear restrictive and defeat the purpose of splitting the bids. The process of discounting for a longer duration contract was not undertaken and only a total cost evaluation was done.”

The panel went on to explain why the DTC may have done so, saying that various court orders limit the corporation to purchasing only low-floor CNG buses. “There are very few others who use such buses, and so DTC (in fact Delhi) has been pushed into a suppliers’ market, with very few manufacturers. These limitations may compel some deviations in the procurement process. Yet, if these deviations had become necessary, DTC should have ensured that they did some kind of reasonableness test of the rates for AMC, especially since the rates were far more than what they had in earlier contracts.”

It stated that this incident should be taken as an “opportune occasion” for the transport department to take a hard look at comprehensive reforms of DTC in both the short- and the long-term.

Neither the Delhi government nor the LG’s office commented on the matter.

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