The Hindu : `Use e-procurement system for transparency'

Online edition of India's National Newspaper
Sunday, Feb 08, 2004

Tamil Nadu

Tamil Nadu

`Use e-procurement system for transparency'

By Our Special Correspondent

CHENNAI, FEB. 7. Information technology can play a major role in bringing transparency to procurement of materials by government organisations, the former Vigilance Commissioner, N.Vittal, said here today.

Public sector organisations such as the Railways would have to use an e-procurement system to get the maximum benefit of public procurement transparently, he said addressing a national seminar on ``Vendor management in public procurement,'' organised by the Indian Railways Institute of Logistics and Materials Management.

Stressing the need for changing the system in the context of the impact of IT, Mr. Vittal said reverse auction was a new technique where the lowest price was arrived at after continuous bidding. Technically, it could be ensured that there was no leakage of the names of bidders and the whole process would be fair and transparent.

Referring to the L-1 principle (lowest bidder) in which there was a possibility of poor quality materials and unscrupulous elements getting in, Mr.Vittal said this problem could be overcome by adopting a two-envelope system. The first one could relate to the technical bid and the second to the financial bid. Only after technical bids were shortlisted, should the financial bids be opened. By this method, he said, the best lowest bidder could be selected.

The Financial Commissioner of the Railway Board, Vijayalakshmi Viswanathan, said a pilot project using e-procurement was being implemented by Northern Railway to make the procurement system transparent. Based on its success, the system would be extended to other zones too. She said on an average 13,000-14,000 items were being procured every year and the annual budget was about Rs. 10,000 crores.

So it became imperative to have a proper database of vendors to monitor the quality of materials supplied and their performance. It was necessary as material purchases related to safety of passengers. This was also recommended by the Railways Safety Review Committee, she said.

The Southern Railway General Manager, V. Anand, said a continuing relationship with vendors by stores department of the Railways was crucial in the present scenario and there was an urgent need for shifting quickly from a traditional to collaborative relationship and to the next stage of permanent alliance. In short, cooperation should replace competition.

M.V.Ramani, General Manager, Integral Coach Factory, who is also the chairman of the southern chapter of the institute, said there must be continuous interaction between the vendors and the buyer.

He said the vendors had to be motivated to use their research facilities for upgrading products and introducing new products so that the benefit was derived by buyer organisations.

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