CR clamps iron hand on 2 errant suppliers

The multi-crore fraud pertains to the purchase of ferrous compounds by the Parel workshop, which manufactures crucial safety devices for locomotives and passenger trains (Newsline November 21, December 25). In this case, the sub-standard material was used to make brake blocks, thereby jeopardising the safety of passengers. The firms had been supplying the sub-standard material — 620 tonnes worth Rs 1.14 crore a year — since four years in collusion with senior railway officials. The payoff? Kickbacks to the officials in return for the contracts. The modus operandi was simple: 70 per cent of the material thus purchased was casually dumped into the furnace as scrap as it was much too inferior for use. The stunningly simple fraud was discovered accidentally when a foundry employee found the furnace almost choked In June last year. The evidence, it seems, was being burnt!

Asked why Nitin Industries had been exempted from the January 5 order delisting the other two comapnies, M K Surana, chief materials manager (costruction), denied that the administration was protecting the errant company. “I have issued orders for delisting two companies,” he told Newsline. He went so far as to deny that Nitin Industries had supplied even an ounce of sub-standard material. “I received a report from the chief works manager, P S Gupta, of the Parel workshop, asking that Sterling and New India Trading be delisted. I have done accordingly,” he says.

Sources also say that while justice appears to have been served with the delisting of Sterling and New India, the reality is actually quite different. While striking the companies off its list of suppliers, the CR has conveniently failed to serve them show cause notices, thereby opening a safety hatch to protect them from possible litigation.

Senior railway officials say that the Vigilance Department is also inquiring into the CR’s dealings with another firm, South Asia Importers, another supplier of ferrous compounds. Strangely, the inquiry into South Asia Importers could also help get Nitin Industries off the hook as the fromer is a sister concern of Nitin, sources say. Being an unregistered firm, no action can be taken against South Asia Importers while the CR can simultaneously claim to have taken action against Nitin Industries, they explain.

Meanwhile, though 25 employees and officials have been questioned with regard to the fraud since it surfaced seven months ago, not a single show cause notice has been served till date. Says Surana: “Whatever action has been taken is on basis of a report from the chief works manager at the Parel workshop. We have not yet received a comprehensive recommendation from the Vigilance Department. Without getting their interim report, we can’t decide what action should be taken as the Vigilance inquiry is underway.”

Queried on this, Chief Vigilence Officer A K Rao refused to speak to Newsline. In fact his personal secretary was categorical, saying Rao did not want to speak to the press. “Please speak to Mr Mukul Marwah,” Newsline was told. Chief Public Relatins Officer Mukul Marwah, toed the official line, saying: “At this stage, it would not be appropriate to comment. The Vigilance inquiry is underway and is likely to be completed within a month.”