Friday 10 September, 2010

Panel recommends Railways procurement overhaul


BHOPAL : Is the Lucknow-based Railways Research Standards and Design Organisation (RDSO) on the verge of losing its decades-old stranglehold on the corruption-ridden licensing of Railways suppliers at last? If the railways minister Miss Mamata Banerjee implements the key recommendations of an 8-member senior committee which was appointed on the minister’s own insistence, this momentous change could happen.

Implementation of the recommendations will not just re-calibrate RDSO’s functioning, but transform Railways procurement entirely, that runs into over Rs. 25,000 crore annually.

The Statesman has accessed the committee’s report which recommends that supplier approval at RDSO be ‘substantially reduced’ and decentralised to Production Units and Zonal Railways, with inspection of stores delegated to a different agency like RITES or Zonal Railways. The committee has observed that “the cumbersome process being followed by RDSO delays the vendor development work and also deters the good suppliers from coming to the Railways. Railways thus continue with too few suppliers for critical items” and make purchases from original equipment manufacturers at “exorbitant prices.”

The report notes that “it is not good practice to entrust all three works namely framing technical specifications, vendor approval, and inspection of stores to single agency” and that ‘RDSO should focus on its prime activities, i.e. Research, Design, Standardisation, and Development.’ The Statesman’s investigations show that though there is corruption at every level of Railways procurement, it is in supplier approvals, conducted primarily at RDSO and Production Units, where the seed is planted and the major game of kickbacks, involving top Railways officers, is played.

Along with the senior-most officers of the respective user departments, RDSO has been restricting competition and approving favoured suppliers. These select suppliers have doctored prices and gone on a fleecing spree throughout Railways. According to estimates, Indian Railways have lost at least Rs. 50,000 crore due to over-pricing in the past decade, largely due to RDSO’s non-transparent and non-competitive system of approvals.

In December 2009, Ms. Banerjee informed the Chairman, Railway Board, about her desire to create a ‘monitoring mechanism’ at the Board for ‘proper oversight of vendor approval work being done at RDSO.’ The Chairman constituted an 8-member committee of senior officers to investigate RDSO’s functioning. According to sources, visiting RDSO early this year, the committee found the research body involved in approving suppliers despite its having no such mandate, and limited technical manpower to do so.

Sources within Rail Bhavan have disclosed that while both the Chairman and other Board Members were largely in agreement with the recommendations of the committee, ex-Member, Mechanical, Mr Praveen Kumar was not impressed. In consultation with current Bangalore DRM Mr S Mani, Mr. Kumar is believed to have commented against the recommendations and delayed their progression. Soon after this newspaper reported that the recommendations still languished with the present Member, Mechanical, Mr Sanjiv Handa, the file is believed to have been forwarded to officials who man the Minister’s cell. RDSO has for long put its primary responsibility of Research aside, and become the centre of Railways corruption.

Although both CVC and CAG have criticised the RDSO’s approval system and its rampant corruption, the committee report represents the first time an internal decision has been made to address the problem. While the recommendations await implementation, corruption in Railways procurement continues apace.

1 comment:

rasifa said...

Good thing to know, than q