NEW DELHI: When the government approves a project, it is to be awarded in one go. But the Tuticorin Port Trust
(TPT) decided to go against the established norm and split a contract.
It is only after four years that the port trust is making amends, and
the shipping ministry has sought the Union Cabinet's approval. Sources
in the ministry said that substantial portion of the project has been
released by the port.
Also read: Government cover likely for ships carrying Iran oil
In 2008, the Cabinet had approved a composite project for deepening of the channel and basin to cater to the 12.8 meter draught vessels in the port at Rs 538 crore. But before the nod came, TPT had awarded the first work, which is being investigated by the CBI. Later, TPT floated a tender for main dredging work at an estimated cost of Rs 400 crore. But the lowest bidder submitted bid at Rs 465 crore that was 16% higher than the estimate. Norms stipulate that if the bid price is over 10%, it should be appraised by the expenditure finance committee (EFC) and approved by the finance ministry. But this was not followed.
Meanwhile, the port trust and shipping ministry received a complaint from a Singapore-based consultant Visista International engaged by the successful bidder Jan De Nul Dredging India Pvt Ltd that the contractor had terminated the deal on the ground that it did not "have the skill and abilities" to promote the firm with highest level and authorities handling the project.
In May, 2010, based on such allegation, the ministry's finance wing recommended cancellation of the bid and invited a fresh one. Though the ministry took the Central Vigilance Commission (CVC) into confidence in June, 2010, the latter responded stating that the documents were insufficient.
A senior executive of Jan De Nul from Chennai said, "This matter has been closed by the ministry and port trust. Whatever information was asked from us was submitted."
In end-2010, senior shipping ministry officials cleared awarding of main dredging work overruling internal recommendations of getting it appraised by the EFC.
In January, 2011, shipping secretary K Mohandas noted that splitting the project was "wrong", but he did not favour EFC appraisal.
However a month later, shipping minister G K Wasan overruled the secretary's view and supported taking it to EFC. Though EFC appraised the project last September, its expenditure department observed that since everything was done without seeking prior approval the panel's role was redundant. It suggested the shipping ministry to get "post-facto" nod from the Cabinet.
Also read: Government cover likely for ships carrying Iran oil
In 2008, the Cabinet had approved a composite project for deepening of the channel and basin to cater to the 12.8 meter draught vessels in the port at Rs 538 crore. But before the nod came, TPT had awarded the first work, which is being investigated by the CBI. Later, TPT floated a tender for main dredging work at an estimated cost of Rs 400 crore. But the lowest bidder submitted bid at Rs 465 crore that was 16% higher than the estimate. Norms stipulate that if the bid price is over 10%, it should be appraised by the expenditure finance committee (EFC) and approved by the finance ministry. But this was not followed.
Meanwhile, the port trust and shipping ministry received a complaint from a Singapore-based consultant Visista International engaged by the successful bidder Jan De Nul Dredging India Pvt Ltd that the contractor had terminated the deal on the ground that it did not "have the skill and abilities" to promote the firm with highest level and authorities handling the project.
In May, 2010, based on such allegation, the ministry's finance wing recommended cancellation of the bid and invited a fresh one. Though the ministry took the Central Vigilance Commission (CVC) into confidence in June, 2010, the latter responded stating that the documents were insufficient.
A senior executive of Jan De Nul from Chennai said, "This matter has been closed by the ministry and port trust. Whatever information was asked from us was submitted."
In end-2010, senior shipping ministry officials cleared awarding of main dredging work overruling internal recommendations of getting it appraised by the EFC.
In January, 2011, shipping secretary K Mohandas noted that splitting the project was "wrong", but he did not favour EFC appraisal.
However a month later, shipping minister G K Wasan overruled the secretary's view and supported taking it to EFC. Though EFC appraised the project last September, its expenditure department observed that since everything was done without seeking prior approval the panel's role was redundant. It suggested the shipping ministry to get "post-facto" nod from the Cabinet.
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