Friday 10 September, 2010

Rly probe into corruption


BHOPAL : The Railways have launched an investigation into the corrupt nexus of suppliers, senior railway officers, and retired bureaucrat-lobbyists, which has robbed an estimated Rs. 50,000 crore from the exchequer in the past decade. The investigation follows a series of reports in The Statesman last month.

It comes after the railway minister, Miss Mamata Banerjee, reacted to the reports and sent a hand-written note to the chairman, Railway Board. Now, the Railways’ Anti-Corruption wing has commenced wide-ranging inquiries into the corruption that covers many ministerial eras.

All rail zones and production units have been directed to provide purchase information for the past five years in connection with 10 items of railway procurement detailed in the series of reports. Miss Banerjee’s strong anti-corruption stance has triggered an unprecedented data-collection and analysis exercise, and skeletons have already begun tumbling out of the well-stocked Railway closet. According to sources in Delhi, several cases have been filed. Simultaneously, the Anti-Corruption unit of the Central Bureau of Investigation has also launched inquiries.

But there is much more to railway corruption. Further information unearthed about PVC flooring sheets, one of the seven ‘fire retardant’ items approved with unjustified approximate costs for mass-purchase by ex-Member Mechanical RK Rao and ex-Finance Commissioner R. Sivadasan in February 2007 as part of a multi-hundred crore rupee exercise, is damning. Passengers do not know that the grimy compartment floors they step on are worth their weight in gold.

Coach floors, lined by newly specified PVC flooring sheets yielded a bonanza for three suppliers, selected by bureaucrats in a three year- Rs 200 crore business. After new specifications were laid down, individual sheet prices jumped from Rs 1,200 to a whopping Rs. 8,600 in 2008. The railways procure 1.5 lakh units per year, and the three firms are estimated to have made profits of Rs. 50 crore in 2008 itself.

When this cartel of suppliers broke up ~ a period when costs of production were on the rise ~ prices plummeted to below Rs. 3,500. Increased prices were supposed to mean improved quality. Investigations show the opposite. Sources in Integral Coach Factory (Chennai) and Railway Coach Factory (Kapurthala) have shared documents with The Statesman showing that one of the suppliers, Responsive Ltd., repeatedly failed quality tests. A letter written in 2009 to RDSO by a conscientious Chief Mechanical Engineer in Kapurthala, complained about these failures. But it did not result in RDSO downgrading the firm. The premier railways research and standards organisation allowed Responsive Ltd to continue making merry; it asked the firm to investigate itself!

Another of the seven fire retardant items under the scanner is Recron, purchased for seat and berth fillings. According to sources, the introduction of Recron in Railways stemmed from the interest of Ms. Reliance Industries Ltd., the polyester kings. There have been complaints within Railways, whispered at the highest levels, about the unsuitability of Recron, which hardens and sets causing discomfort to passengers.

Many of the suppliers of the ten items being investigated also supply other items at grossly inflated prices under different names. For example, some of the players in the ‘odour control system scam’, are involved in supplying PVC angles. The four approved firms ~ SR Plastofabs, Elektra Engineers, Dinesh Kumar & Co, and Manak Overseas Ltd. ~ sell lakhs of PVC angles for Rs 75 each. Senior railway officers told this reporter that the item has a manufacturing cost of Rs 10.

There is no independent vigilance ombudsman answerable directly to the Minister, and Railway vigilance itself is at the mercy of the Railway Board. Thus unless Ms. Banerjee stays the course, there is a chance that in the case of investigations related to The Statesman’s reports too, action will only target junior officers and weak suppliers instead of the systemic corruption that flows from the very top of Railway bureaucracy.

Perhaps sensing intense corruption in RDSO’s vendor approval system, Ms. Banerjee had in January, on her own initiative, ordered an eight-member high-powered committee to revamp the system. The committee has recommended that the task of vendor inspections be taken away from RDSO; “that vendor approval work at RDSO be substantially reduced and RDSO should focus on its prime activities, i.e. Research, Design, Standardisation, and Development.” All Board Members including the Chairman have agreed, save the Member Mechanical. Both Mr. Praveen Kumar and Mr. Sanjiv Handa, ex and serving Members Mechanical, are learnt to have resisted the recommendations.
Source The Statesman, Kolkata

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