MUMBAI, DECEMBER 8: Leading cement manufacturers from the State have lodged a strong protest against blatant violation of rules and guidelines by the Rural Development Department (RDD) as well as Public Works Departments while procuring cement. Though it is the stated policy of the government to give preference to manufacturers from state, its own department -the RDD- seems to be doing exactly the opposite.The issue has come to the fore with the representatives of Larsen and Toubro, Manikgarh Cement, Associated Cement, Narmada Cement and Indian Rayon and Industries Limited complaining against the arbitrary manner of procurement by the RDD. ``The government is flouting its own guidelines and as a result, it has caused losses to Maharashtra producers as well as the government itself,'' a cement manufacturer revealed.According to the representation, the government procures about 25 lakh MT cement every year, of which nearly 60 per cent is procured from outside the state, resulting in losses of revenue to the tune of Rs 90 crore every year.On his part, RDD Secretary M Rameshkumar denied the allegation, saying, the department has procured the cement in accordance with the standing guidelines. ``I have also received the representation. If cement is to be procured as desired by them, then the existing orders will have to be amended to give preference to local manufacturers. At the moment, the proposal is under consideration at the highest level,'' Rameshkumar said.The RDD Secretary said under the existing official resolution, there is a provision of granting price preference to local manufacturing companies, but cement is not included in the list of items. ``Government will have to amend the resolution to include cement in the list only then the department will be in a position to give preference to local units,'' Rameshkumar pointed out.However, a senior official admitted that the RDD ignored the advice of finance and industries department as well as the Chief Secretary and took unilateral decision to procure cement from the producers from outside Maharashtra.As per an official resolution of January 2, 1992, the procedure for comparing the prices of Maharashtra producers with their counter parts in other states has been clearly spelt out.It has been made clear that when the producers from Maharashtra and outside the state compete in an open tender, the Maharashtra producers quote their prices including Maharashtra Sales Tax (MST) whereas outside Maharashtra producers quote prices with only Central Sales Tax (CST), which is only 4 per cent. From the government's point of view therefore, it is prudent to adjust the prices quoted by Maharashtra producers by deducting the MST component and comparing the net price of Maharashtra producer with the prices quoted by producers outside Maharashtra.In February-April 1999, the RDD was in the process of finalising its tender for cement procurement. When the cement companies of Maharashtra learnt that the tender conditions were not in accordance with the order of January 2, 1992, they promptly sought intervention of the then Finance Minister, the then Industries Minister and the Chief Secretary. The Chief Secretary on April 12 and April 22, 1999 brought to the notice of the Rural Development Department the alleged irregularities in procurement of cement and asked the department to refrain from procuring cement in a defective manner.Simultaneously, the Finance Minister also wrote a letter to RDD to follow the stated policy of the government and ensure that the government does not lose revenue.This was subsequently followed up by a letter from Principal Secretary (Finance) asking the RDD to adopt the procedure laid down in the government resolution. In the meantime, the Industries department too issued a letter on March 23, 1999 advising RDD to follow the procedure laid down by the official resolution.However, despite all this, the RDD went ahead with its deals causing losses to the state exchequer and the cement manufacturers of Maharashtra.
