25 January 2012

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RTPP, DVC, Reliance Infra Contract is it 50 Crore Scam? DNA Expose

RTPP, DVC, Reliance Infra Contract is it 50 Crore Scam? DNA Expose

DNA in its investigation found that Damodar Valley Corporation (DVC) did not follow rules to award the Anil Ambani-owned Reliance Infra Limited an Engineering Procurement and Construction (EPC) contract worth Rs4,000 crore to construct a 1,200 MW power plant in Raghunathpur, West Bengal.

The contract for the Raghunathpur Thermal Power Plant (RTPP) was given to Reliance on a single tender basis without re-tendering despite other bidders, including BHEL, formally asking that the tender opening date be extended.

The main contract file got lost after the contract was given, thus it became very difficult for the CAG to investigate the matter, audit the contract.

CAG wanted to audit to see whether the interest-free loan to Reliance was justified, the DVC management informed it that the main file for the Rs4, 000 crore project was missing.

File was missing but the DVC management did not file a police complaint.

This clearly shows that something was in that file, thus file got missing and it saved the some one.

CAG wrote many letters to DVC, DVC replied that one-man committee had been constituted to look into the loss.

After that CAG wrote many letters but CAG did not get the correct answer.

CAG got the treatment just like a common man, who keeps visiting government offices for birth certificate or other certificates.

DNA reported that following persons were involved in the awarding of the contract.
AK Barman, ex-chairman, DVC; Subrata Biswas, ex-secretary, DVC, and currently principal secretary, animal husbandry, Govt of Kerala; Gautam Chatterjee,
Ex-Chief Vigilance Officer (CVO), DVC, now vice-president & CEO, Maharashtra Housing and Area Development Authority (MHADA).

CVC guidelines say that if an interest-free loan is necessary, it should clearly be stipulated in tender documents itself.

DVC also gave Reliance an interest-free loan of Rs354.07 crore in violation of Central Vigilance Commission (CVC) guidelines.
For this loan reliance reduced its bid amount by Rs100 crore.

But still DVC suffered - DVC lost Rs 50 crore.

Though bid documents said DVC would grant the successful bidder a loan @12.75%.

The loan was given to Reliance before it submitted all bank guarantees (BGs) and before an agreement was signed.

CVC guidelines say that an advance should only be given after all BGs are submitted.

Reliance was paid the first installment of Rs173.56 crore on December 17, 2007 even though it had not submitted all BGs.

On the name of urgency and common wealth games 2010, the contract was given to the Reliance.

DNA reported that DVC bent several rules to award Reliance the RTPP project using the urgency of the 2010 Games as an excuse, the project along with five others commissioned, is still incomplete.

Chief technical examiner’s organization (CTEO) manual of the CVC that states that for any big project, extensions asked for by a majority of bidders, may be considered in the interest of the project.

May 18 2007 -
A notice inviting tender (NIT) was issued through the international competitive bidding (ICB) route for which the extended bid submission date (during the pre-bid conference) was July 31, 2007.

Following are the names of 4 companies who were interested or say bidders.

1. Dongfang Electric Corporation

2. China; China Machinery Engineering Corporation (CMEC)

3. Bharat Heavy Electricals Limited (BHEL)

4. Reliance Infra

Except Reliance Infra other 3 bidders wrote the letters and requested that the dates be extended. Bidders requested that dates be extended to August 31, August 14 and September 10 respectively.

But DVC management denied extension and did not follow the CTEO manual rules.

Other 3 bidders could not submit the bid as extension was not given and Reliance Infra got the contract.

August 31 –

DVC opened the Reliance bids.

September 14 –

Reliance submitted a revised price of Rs 3,725 crore.

In mean time reliance requested for interest free loan and DVC officials accepted it.

CVC guide lines say that neither party can change any tender specification after the bid is opened.

But in India who follows rules.

DVC also accepted a modification of a coal specification that Reliance wanted along the lines of its plant in Hisar.

Change in the bid - this is the direct violation of the CVC guideline.

DVC wrote the letter to CVC justifying for not giving the extension of dates to other 3 bidders.

CVC replied that an extension of time or snap bid is the preferred option.

Extension of time would have made others eligible for the bid.

What is snap bid?

A ‘snap bid’ is a period of time given to those who have made a bid but do not fulfill tender specifications. This allows bidders to bring their bid up to required specifications.

CVC name - Pratyush Sinha

DVC board by the company’s CVO Gautam Chatterjee met the CVC regarding the options.
After that CVC removed the option of extension of time and CVC also said that
‘Snap bid’ as the only option.
In this case 4 bidders purchased the bid but only reliance submitted the bid others did not submit the bid.

Thus it was not a proper and good option to open snap bid as there was only one company so what was the use of snap bid when others disqualified automatically.

And in snap bid option the company or bidder who has submitted bid only got the option to resubmit.

What was the hurry in giving the contract?

Why the rules were bend?

Why the police complaint was not made?

So now do you think it is scam, scam amount Rs. 50 Crore or scam amount Rs.4000 Crore ?

Do you think no kickbacks were given in this contract?

Reality views by sm –

Wednesday, January 25, 2012

Tags - DVC Scam

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