Plan to digitise your PF may get burial today

It was considered a model in e-governance, the largest reform project in the government...

It was considered a model in e-governance, the largest reform project in the government in terms of complexity, in a department that touches the lives of 4 crore citizens 8212; the Employees8217; Provident Fund Organisation. It was meant to provide you online access to your PF account and service your withdrawal claims within days. It was inaugurated by former President A P J Adbul Kalam, former Prime Minister A B Vajpayee but seven years, six Labour Ministers and about Rs 25 crore later, the UPA government is set to scrap the project 8212; and start all over again.

8220;Reinventing EPF India8221; envisaged a complete overhaul of the creaking business processes and ancient manual accounting systems as well as computerisation of the 56-year-old organisation. Tomorrow, the EPFO8217;s Central Board of Trustees will consider a proposal 8220;for immediate termination of the contract8221; between EPFO and Siemens Information Systems Limited SISL, the consultant hired to implement the project in 2001. Ironically, this proposal is based on a recommendation by a panel set up by the Labour ministry last year to suggest ways to expedite the project. The panel is headed by V K Gupta, CSIR8217;s I-T division head.

The immediate provocation for the termination: last October, SISL asked for an extra Rs 6 crore 8212; which was accepted by the EPFO 8212; but then it added a demand of Rs 21.49 crore compensation for delays it said it was not responsible for. These delays stem from the EPFO8217;s inability to provide comprehensive data to help in the transition from manual to digital processes.

So what8217;s Plan B? The sub-committee has proposed a step-by-step modernisation approach involving all 112 EPF offices simultaneously with the help of the Government8217;s National Informatics Centre. NIC, incidentally, doesn8217;t have a record in accounting and management process restructuring.

Originally to be completed in 22 months in six pilot locations, the project is more than 66 months behind schedule, largely due to bureaucratic bungling, ministerial neglect and sabotage by the department8217;s insiders wary of losing their fiefdoms. While it was slightly behind schedule by May 2004, under the UPA, the project has been completely derailed.

In the project8217;s chequered history, this is not the first time a committee was set up to monitor progress. Earlier panels included then Nasscom chief Kiran Karnik, NIIT chairman P Rajendran, former CVC N Vittal and Gulshan Rai. After the Gupta sub-committee assessed problems on both the software front as well as on EPFO8217;s front, the Director General of NIC held discussions with EPFO and SISL for finding ways to push the project forward.

SISL had to make some changes in software design, EPFO had to pay for the changes and fix practical deadlines for delivering the required data from its end. In October 2007, SISL said another Rs 6 crore would be needed to make the system work and the original contract was to be modified. Last month, when SISL sent EPFO its draft modifications to the contract with redefined milestones, one clause sought additional compensation for delays not attributable to SISL from the date of the original pact till the new one of Rs 21.49 crore.

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At a meeting on December 19 with senior SISL executives, it was conveyed that the former8217;s delay liability demand indicated it was moving towards arbitration rather than resolution. The very next day, the sub-committee met again and decided SISL8217;s demand was unacceptable and the contract be terminated. When approached, Labour Minister Oscar Fernandes directed that the EPFO Board take a decision on the matter since it had not only granted all necessary clearances for the project but also condoned the delays in the project till recently.

Incidentally, UPA8217;s first Labour Minister Sis Ram Ola sacked the Central PF Commissioner Ajai Singh who was championing the reforms simply because Singh made a presentation to Planning Commission Deputy Chairman Montek Singh Ahluwalia where he pleaded for the modernization project to be taken under the wing of the Prime Minister8217;s Office.