Monday, Apr 11, 2005
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By Our Staff Reporter
NEW DELHI, APRIL 10. The Delhi Transport Corporation had purchased "sub-standard'' acrylic destination boards worth Rs 16.60 lakhs which had failed to serve the intended purpose, the report of the Comptroller and Auditor General of India for the year 2003-04 has stated, while pointing to another instance where the loss-making Corporation almost deliberately sought to harm itself. Noting that even after the fault had been detected, the Corporation imposed only a nominal penalty upon the supplier instead of either cancelling the order or recovering the full cost, the CAG report said the procurement of sub-standard material defeated the intended purpose of improving the visibility of the destination boards as desired by the department and as such the purchase proved to be "wasteful''. The report said DTC had invited open tenders from manufacturers for purchase of 17,056 acrylic destination boards to replace the existing metallic ones -- which had been supplied free of cost by the body builders along with the buses -- in its buses in order to enhance visibility and presentation in both day and night conditions in September 2002. Thereafter the Techno Evaluation Committee recommended the price bids of two firms and subsequently the Financial Advisor recommended that only the price bid of Dipcraft Industries be admitted since it was the only manufacturer who had responded. A purchase order was then placed on October 1, 2002, on the firm for supply of 16,298 acrylic boards at a cost of Rs 17.11 lakh and the material was received the same month through their authorised dealer. However, when the material was sent for testing, the boards failed in all the three impact strength tests. And since by now the Corporation had released the entire cost barring Rs 75,000, the management decided to impose a nominal penalty of Rs 51,000 on the firm which included the recovery of test charges of Rs 27,000 as a levy of penalty in such cases. Worse was to follow. Seven of the 33 depots reported that 2,486 of the 5,207 boards received by them or 48 per cent of the boards had got damaged within four to 12 months and had been rendered unusable. A scrutiny of the audit also revealed that the levy of only nominal penalty under the Association of State Road Transport Undertaking formula was not correct as acrylic boards were not on the list of items under its standard rate contract. As such, action should have been taken under the purchase policy of the Corporation under which it was entitled to reject the material, cancel the purchase order and buy the requirement from open market at the risk and cost of the supplier. But the officials chose to favour the firm till the end. Also, the price bid of Dipcraft Industries was opened on the plea that it was the only original manufacturer of the acrylic boards. But the CAG report said the fact remained that Gujarat State Fertilizers and Chemical Limited which had bid through its stockist Kapoor Sales Corporation was an ISI 9002 certified public sector undertaking and still its bid was overlooked and this "deprived the Corporation of the benefit of competitive rates by unnecessarily turning the items into a single source item''. The report has also questioned why the expected average life and performance guarantees were not incorporated in the terms and conditions of the agreement. Finally taking cognisance of the Delhi Government's response of September 2004 in which it had stated that acrylic boards were being purchased for the first time and so the Corporation was not in a position to stipulate the expected life and performance guarantee, the CAG said the reply of the Government is not tenable because the Corporation ought to have been more vigilant.
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