Day light robbery of public money in Eastern Railway

#Railgate: The issuance of #Tender No. LRC-3_TIOLET-UPG-1255_N by the #Mechanical Department of #Lilluah workshop #EasternRailway is a blatant case of public funds being swindled. This #EPC Contract, worth ₹72,28,96,942.73/-, demonstrates outright looting of #government resources through the #criminal collusion of #corrupt railway officials and a specific #private-vendor along with its sister concern.

Please watch the video repor toot: #Railgate-8: #Policy_Corruption in #IndianRailways!

The tender for upgrading #LHB Coach Toilets has several critical issues:

1. It is inconceivable that materials, which constitute of around 80 percent of the tender value worth ₹72 Crore could be procured without any inspection. To bypass the essential third-party pre-dispatch inspection (#TPI), a cornerstone of #Railway’s quality assurance policy, a superficial strategy was employed. Although #RITES was tasked with #inspection, they were prevented to carry out any #tests/#checks and were merely authorised to pass the materials on the strength of #OEM’s test certificates, rendering the inspection process a farce. Given that the #Contractor is himself the #OEM of the furnishing items, this inspection is as good as handing over the keys to thieves. As we all are aware, being furnishing items, the #quality of these items varies drastically with their price, and such a superficial inspection is bound to result in substandard materials. If the items used in the specific coaches are tested independently even today, the truth will reveal that they have employed inferior quality materials that would fail proper tests.
2. The tender process is marred by evident #cartel formation among the participating firms. Hindustan Fibre, Vadodara and M/s #CMT are known sister concerns, while M/s #ACME is their collaborator. Both M/s #HindustanFibre and M/s CMT Mechanized System Vadodara are controlled by the same group of individuals and operate in unison. Refer to the Chennai High Court judgments in WP No. 25008 of 2021 and WA No. 194 of 2022, resulting from a #complaint by the Integral Coach Factory (#ICF), single bench found them culpable of cartel formation, the Division Bench acquitted them due to lack of intention behind cartel formation. However, the court emphasized that the Competition Commission of India (#CCI) should continue investigating #cartelization charges. As regards remaining one firm M/s ACME, they merely sublet the #contract to M/s Hindustan Fibre, as evident from cross-verifying the origin and invoices of same furnishing materials against previous contracts placed by the Modern Coach Factory (#MCF). Inspection Certificates issued by RITES for past contracts placed by #MCF indicate that inspections for contracts awarded to M/s ACME were conducted at M/s Hindustan Fibre’s premises. Tracking the payment trail between these firms will further confirm this fact.
3. The #eligibility-criteria were manipulated to favour a specific #firm and its #associates, violating Central Vigilance Commission (#CVC) guidelines which mandate inclusive criteria. This tailored approach indicates clear criminal collusion, which is evident from the following facts-

(I) The Technical Eligibility Criteria of the Tender are specified as follows:

“The firms that have completed the ‘Supply & Fitment’ of Complete Interior furnishing or refurbishment including #Electrical & #Mechanical Work of LHB Coaches. ‘Interior furnishing’ refers to the supply and installation of Flooring, Wall Paneling, Ceiling, Provision of #Seats & #Berths, and #Lavatory of the #Coach in the interior of the LHB coach, OR

The Complete #Manufacturing of Metro-Coaches Rolling Stock, including Roof Ceiling Panels, Side Wall Panels, Seats, Doors, Gangway, and Electrical items.”

(II) Additionally, a “Special Technical Criteria” is stipulated as:

“The #Tenderer must have completed, in the last 7 years, one of the following categories of work:

• Three Similar works each costing no less than 30% of the advertised value.
• Two Similar works each costing no less than 40% of the advertised value.
• One Similar work costing no less than 60% of the advertised value.”

4. Upon deeper analysis of the above mentioned eligibility criteria, it becomes apparent that this #criteria is a glaring example of #criminal connivance. This tender, invited for the repair of #Lavatory-Work, unnecessarily imposes eligibility conditions related to past experience in Seats & Berths, and Gangways. This is particularly restrictive as there are numerous approved suppliers experienced in the #production, #supply, and #fitment of LHB Coach Lavatories. Their eligibility is being unfairly restricted by these additional and unnecessary #technical requirements. Notably, the #RailwayBoard has set the qualifying criteria for furnishing complete coaches, including Toilets, Seats & Berths, Paneling, Flooring, Partition Frames, and Honeycomb, at 25 coaches, as per Railway Board Circular no. 2023/RS(G)/779/4 (E3423823). However, for this tender, who involves only lavatory work, the criteria require complete coach furnishing of around 100 coaches as a qualifying standard, clearly favouring just two suppliers.
5. As regards rates, the tender no. 17231142 finalized by Rail Coach Factory (#RCF) for the #procurement of new complete coach sets of toilets for LHB III Tier coaches was finalized at ₹407,110/- per coach. This translates to ₹101,777/- per toilet, including a six-year warranty. Comparing this with the budgeted amount for the upgrade of a single toilet in the current tender reveals an exorbitant and unjustified cost, which will undoubtedly invite criticism towards #IndianRailways.
6. The materials constitute almost 80% of the EPC tender value. These items are established furnishing items routinely purchased by #MCF, #RCF, and #ICF through #stores tenders with third-party inspections and further checks at #Railway labs. However, this EPC tender bypassed established procurement procedures, relying instead on budgetary quotations from the same set of firms to determine price reasonableness, leading to #financial misappropriation. Moreover, the Purchase Preference Policy (#PPP) and #MSME coverage inherent in stores tenders were entirely bypassed.
7. The entire process—from indenting to tender floating, awarding, inspecting, accounting, and execution—was controlled by the same authorities, circumventing the #mandatory checks and balances of the stores tender system. This consolidation of control facilitated the observed #misconduct.

In the eyes of above details and facts, an urgent #investigation must be conducted. As a first step to break the #nexus, the quality of materials supplied by the #contractors should be verified by an independent, reputable #laboratory to uncover discrepancies and ensure #compliance with required standards.

Reliable sources confirm that identical EPC Contracts on the same firm and its affiliates have been finalised by the #WesternRailway also.