Officials flout rules to help contractors

Officials flout rules to help contractors
Sunday January 13 2008 07:11 IST

S Rajashekara

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BANGALORE: Top officials in the Karnataka State Warehousing Corporation (KSWC) have been flouting rules while calling tenders, causing considerable loss to the exchequer.

According to documents available with this website’s newspaper, the officials have clearly flouted board decisions on several occasions, violating the Central Warehousing Corporation Act.

The board, created under the Central Warehousing Corporation Act 1962 through an Act of Parliament, is a joint venture of the State and the Centre. It is governed by the Central Warehousing Rules.

Though constitution of the tender committee is mandatory according to the Act, no such committee had been formed with the approval of the board for over two years.

It was in 2005 that a committee was formed for two projects in Jewargi (Gulbarga) and Hungund (Bijapur) through an administrative order by the then Principal Secretary (co-operation) A Ramaswamy.

Managing Director of KSWC C K Shivanna, an IFS officer said to be close to former PWD and Power Minister H D Revanna, has invited tenders for several projects without a fresh committee.

The Act specifies that the composition of the tender committee has to be approved by the board.

Not just that, documents in possession with this website’s newspaper show that he also revised approved estimates (earlier approved by the board) through negotiations with contractors by keeping the board in the dark and sanctioned an excess of Rs 3.2 crore to contractors.

Similarly, in the second phase of construction, Shivanna is accused of flouting procedures specified in the Act to help contractors by revising the estimates without bringing it to the notice of the board.

Shivanna has cited government orders issued for PWD and Irrigation Chief Engineers besides making a mention of the 1983 board resolution.

Though the PWD orders did not specify any powers to KSWC MD, the upper limit is a mere Rs 5 lakh for piece work contract and the board resolution allows him to take up works without tenders for works not exceeding Rs 1 lakh and a maximum of Rs 2.5 lakh with prior approval of the executive committee.

“Any amount exceeding Rs 2.5 lakh had to be approved by the board,” the Act says.

Shivanna has also dropped godowns from the list to accommodate Ramanagaram and Mallasandra (Gubbi), though there were no lands to construct godowns.

The estimate of Rs 1.21 crore earmarked for it, is now considered a dead investment, as Ramanagaram Deputy Commissioner and Tumkur KMF chairman have refused to give out land.

Shivanna, after seeking approvals for construction of 34 godowns, however, issued notification for just 15 and called for tenders for only 11 on September 29, 2007 through four packages.

Interestingly, Holenarsipur (represented by Revanna) has been considered as a separate package while other three have been clubbed with multiple proposals.

Notwithstanding these procedural lapses by Shivanna and other officials, the proposals by the corporation to create storage capacity of 47,600 metric tonnes with an estimated cost of Rs 44.68 crore seems to be wishful thinking as the net profit of KSWC in the last two years is a mere Rs 7.37 crore.

Despite support by NABARD and RIDF scheme, the corporation is likely to fall short by around Rs 13 crore to realise its projects.