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CVC asks SteelMin to haul up NMDC officers

Tender rules allegedly bent to favour an Italian firm.

The Central Vigilance Commission (CVC) has asked the steel ministry to fix the responsibility of board level officials of NMDC Limited for scuttling competition to allow a consortium led by an Italian firm Danieli win the contract to supply equipment for the company’s upcoming plant in Chhattisgarh and benefiting the vendor by over Rs 250 crore.

In a missive to the steel ministry,the anti-corruption watchdog has asserted that at least two board members of the iron ore miner — NK Nanda,director-technical and S Thiagrajan,director-finance — should be held responsible for allowing deviations in the tender contract clauses,to help Danieli walk away with “the accepted price” of Rs 2,633 crore against a cost of Rs 2,350 crore”.

The company had qualified a consortium under Danieli for the finishing line of the upcoming 3 million tonne steel plant at Nagarnar in Chhattisgarh’s Bastar district at an expenditure of Rs 15,500 crore.

The CVC rejected the steel ministry’s defence on ensuring fair play and transparency in the contracting process. The ministry had sought to justify transparency by arguing that Danieli consortium was “correctly pre-qualified as per pre-qualification criteria in the Expression of Interest document” in May and the same dispensation for Danieli had been extended to other bidders too.

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The CVC shot down this contention on two grounds.

First,the pre-qualification deliberations on record do not support such a contention and “the explanation appears to be an afterthought.”

Second,even if such a dispensation had to be given to all participating bidders,it is clear that the expression of interest document for “pre-qualification was prepared without proper application of mind and incorporating stringent eligibility criteria,” the CVC said.

The commission has said that reports of the respective chief vigilance officers (CVO) of NMDC and state-run consulting firm MECON in this connection were forwarded to it without giving the findings of the ministry’s CVO (joint secretary Upendra Prasad Singh) and without any views of the competent disciplinary authority. “The ministry’s reply to our advice early this year is awaited and the same may be expedited,” the CVC said.

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The CVC has raised the issue of only two of the four bidders being found qualified for awarding the tender.

It has pointed out that pre-qualification of by Danieli consortium was “incorrect” and adding another firm Brickmount as its member “at a later stage vitiated the process”.

“Although Brickmount was not a consortium partner,Danieli was allowed to qualify without insisting on forming a consortium with Brickmount”.

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Steel minister Beni Prasad Verma in a communication to the CVC tried to justify Danieli’s selection arguing that the company set up completely Essar’s Algoma plant in Canada.

First published on: 27-11-2013 at 02:22:05 am
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