Report on Allegations of Malpractice, Procedural Violations, and Tender Manipulation in IRCON S&T Contracts

Admin

#Railwhispers received a reliable primary source information that raises severe concerns regarding the systemic disregard for #passenger-safety by the Office of the Chief General Manager (#CGM) – Signaling & Telecommunication (S&T) at #IRCON International Limited. The report alleges that the deployment of ineligible, inexperienced, and unqualified sub-contractors for critical railway projects—specifically #KAVACH (Train Collision Avoidance System) and Automatic Block Signaling—poses a direct risk to public safety. The CGM-S&T-IRCON is described as a habitual offender who systematically evades strict #Tender norms, #procurement conditions, and #statutory directives issued by the Ministry of Railways, Central Vigilance Commission (#CVC), General Financial Rules (#GFR), and the Hon’ble Supreme Court of India.

Prior Malpractices: The Agarwal Engineers Case

The information notes that this is not an isolated incident. An earlier instance of procedural evasion involved the direct award of optical fiber cable (#OFC) and tower works to M/s Agarwal Engineers and Rail Infrastructure Limited. Under Letter of Award (#LOA) reference number ⁠IRCON/SWR-PROJ-KAVACH/LOA/2⁠ dated June 2, 2025, a contract worth ₹135.19 crore was granted without inviting any competitive open tenders. This contract was allegedly finalized without proper negotiations or the acquisition of a mandatory work experience certificate. Furthermore, the Principal Chief Signal and Telecommunication Engineer (#PCSTE) of South Western Railway (#SWR) allegedly permitted these malpractices by failing to initiate corrective or punitive action against IRCON.

The NWR Mega Project Award

A new phase of controversy has emerged concerning a major contract secured by IRCON from North Western Railway (#NWR). As verified by the official correspondence from the Office of the Dy.CSTE/C/Ajmer (Const.), IRCON received a formal Letter of Acceptance under reference no. ⁠DY.CSTE-C-AII-S AND T / SnT-C-AII-25-01 / 01346260127170⁠ dated April 11, 2025. This project encompasses comprehensive “Design, manufacture, SITC of Microprocessor based EI system… Automatic Block Signalling system in AHO-NSD section… and other telecom works in c/w doubling of AHO-CNA Jn section of Ajmer division on NWR.” The total sanctioned value of this primary contract awarded to IRCON stands at ₹127,80,36,115.49 (approximately ₹127.80 crore).

Back-Dated Agreements & Splitting of Tenders

Following the receipt of the NWR LOA, the Office of the CGM-S&T-IRCON allegedly colluded with a Jaipur-based firm, M/s Khandelwal Electricals. To bypass direct bidding barriers due to structural credential issues, officials allegedly fabricated back-dated documents to falsely indicate that a Pre-bid Agreement between IRCON and M/s Khandelwal Electricals had been established early on February 10, 2025. Reliable sources state that these documents were generated only after IRCON secured the NWR contract.

Because M/s Khandelwal Electricals was unqualified to participate directly in a high-value tender, the Office of the GGM-S&T-IRCON deliberately split the work into two sub-contracts to facilitate a “backdoor entry”:

  • Part-A (#Supply): Focused on the procurement of EI, MSDAC, RDPMS & IOT devices, and HDPE ducts.
  • Part-B (#Execution): Focused on site deployment and system installation.

Crucially, IRCON officials ignored the historical precedent that M/s Khandelwal Electricals had previously been disqualified from a much lower-value IRCON signaling tender due to a lack of basic eligibility.

Document Manipulation & Financial Implications

With the alleged assistance of the GM/Finance/IRCON, the sub-contracts were officially awarded to M/s Khandelwal Electricals via two parallel Letters of Acceptance issued under the file series ⁠IRCON/S&T/NWR/AII/EI/2025-26/Pt.A⁠ and ⁠Pt.B⁠, dated April 29, 2025.

The financial breakdown of these split LOAs includes:

  • Part A (Supply): ₹58,37,51,506.22
  • Part B (Execution): ₹63,80,48,410.57
  • Combined Sub-contract Cost (A+B): ₹122,17,99,916.79

This arrangement resulted in severe damage to the public exchequer. The standard PSU profit margin, typically mandated at 10%, was severely compromised down to 4.5%. The whereabouts and allocation of the remaining 5.5% of the contract value are currently under investigative scrutiny.

Summary of Regulatory & Statutory Violations

The operational execution by the CGM-S&T-IRCON, shows definitive violations of multiple statutory public procurement safeguards:

  • Violation 1: Direct violation of the Hon’ble Minister for Railways’ (#MR) mandates to engage only competent and legally eligible bidders.
  • Violation 2: Complete breach of Condition 7a of the General Conditions of Contract (#GCC), which requires sub-contractors to possess verified independent work experience equal to at least 35% of the project scope. No such certificate was obtained.
  • Violation 3: Breach of the GCC para 7a cap, which dictates that the total value assigned to a sub-contractor must not exceed 50% of the overall contract value. By outsourcing ₹122.18 crore out of a ₹127.80 crore project, IRCON illegally sub-contracted more than 95.5% of the work without obtaining the mandatory approval of the #PCSTE/NWR.
  • Violation 4: Infringement of #CVC Directives (Office Memorandum dated October 20, 2003) which strictly ban non-transparent, back-to-back sub-contracting without open competitive tendering.
  • Violation 5: Concealment of public records by failing to upload the awarded #LOAs to IRCON’s official website, a direct violation of CVC Office Orders No. 13/3/05 (dated March 16, 2005) and No. 57/9/05 (dated September 20, 2005).
  • Violation 6: Total non-compliance with the public procurement directives of the Hon’ble Supreme Court of India, circulated via CVC Office Order No. 23/7/07 (dated July 5, 2007).

Conclusion and Call for High-Level Investigation

The documented evidence indicates a severe breakdown of regulatory governance, transparent public procurement, and safety oversight within IRCON International Limited. Because these sub-contracts involve highly sensitive passenger safety infrastructure (Electronic Interlocking and Automatic Signaling), the potential consequences of deploying unqualified contractors are severe. The investigative team at #Railwhispers is actively gathering further evidence for subsequent disclosures. Ultimate administrative accountability rests with the CMD/RVNL, who currently oversees IRCON, to initiate an immediate, high-level formal investigation and enforce strict legal and disciplinary actions against the compromised officials.