Corruption being carried out on a large scale in MSRTC, reveal reports

Jul 02, 2015, 07:00 IST | Sharad Vyas

3 reports of Maharashtra State Road Transport Corporation's vigilance department expose connivance of staff in causing major losses; violations of rules in shortlisting bidders for Rs 350-cr e-tender to auction scrap

It’s raining trouble for the BJP-Shiv Sena government this monsoon and, soon after BJP ministers Pankaja Munde and Vinod Tawde found themselves in the dock, dark clouds are gathering over the Transport department, where another multi-crore scam appears to be brewing.

State Transport Minister Diwakar Raote
State Transport Minister Diwakar Raote

Three separate reports of the Maharashtra State Road Transport Corporation’s own vigilance wing have exposed the connivance of everyone, from senior officials to depot managers and bus conductors, in causing major losses to the transport body.

Also Read: Maharashtra Minister Pankaja Munde accused of Rs 206 cr 'scam'

The latest scam includes blatant violations of vigilance rules in shortlisting bidders for a Rs 350-crore e-tender to auction scrap, the ‘disappearance’ of tickets worth over Rs 1 crore by conductors and a loss of R44 crore a year caused by the encroachment on additional space by contractors to whom certain areas in depots had been leased out or given on contract.

Senior officials from the corporation told mid-day that the MSRTC has become a hotbed of corrupt practices, which is contributing to it running into losses, thanks to power tussles within the transport body. File pic for representation
Senior officials from the corporation told mid-day that the MSRTC has become a hotbed of corrupt practices, which is contributing to it running into losses, thanks to power tussles within the transport body. File pic for representation

This was carried out with the ‘connivance of officials and contractors’, the reports clearly point out. What’s worse, when the corporation’s own vigilance wing raised a red flag on the violations and started probing the Rs 350-crore tender proposal, its investigation was allegedly stonewalled by the corporation’s board of directors.

The investigating team was then forced to file two Right to Information (RTI) applications against its own corporation, in which it sought nearly 3,500 pages of tender documents (worth R14,000), but even these were turned down by senior MSRTC officials in a written reply (file no. 3827) this week.

To top it all off, the MSRTC has in what is being seen as a bid to curtail the independence of the vigilance department decided to go ahead with the inclusion of vigilance officials in the decision-making process. The vigilance cell had even issued a circular this week to try and block the move, but it was overruled by the corporation’s board of directors.

“All of these frauds and issues clearly show that corruption is being carried out on a large scale in the corporation and has become a big racket. We request you take strictest measures against these malpractices in tendering, ticketing, real estate, diesel pilferage,” reads the report (RP/security/KA/1749) submitted to the Government of Maharashtra by the vigilance cell on June 25.

Tender lapses
A recent report by the vigilance department has raised serious questions on the propriety of the board members of the MSRTC, who had proposed awarding a tender worth Rs 350 crore for auctioning of scrap in clear violation of the guidelines of the Central Vigilance Commission (CVC), which bar a government body from dividing the tender between more than one bidder unless it is specifically mentioned in the pre-tender conditions.

Also Read: BJP closes ranks as another procurement scam surfaces

This means that a body cannot enter into post-tender negotiations with bidders other than L-1 (the lowest bidder). The tender in question, announced by the MSRTC, proposes award of 26% of the contract to L-1 (the lowest bidder), 42% to L-2 (second lowest), and 32% to L-3.

However, a vigilance report (number 1733/19-06-2015) points out that the proposed award is ‘arbitrary’ and in violation of the CVC guidelines, which bar post-tender negotiations with L-2 and L3, and make it mandatory to declare percentages related to the division of work as a pre-tender condition for special items.

“In this case, no pre-tender conditions mentioned how the work would be divided between the bidders, and was later, as an afterthought, divided in an arbitrary manner. We recommend award of 100% of the work to L-1 under these questionable circumstances, as the tender has yet not been finalised, or we recommend holding the tender back,” the report submitted to the principal secretary (transport) reads.

‘Turned blind eye’
The reports also highlight that a vigilance team had found that of the 2,767 commercial establishments leased out by the MSRTC in bus depots, 770 establishments had illegally, in connivance with the MSRTC staff, encroached on more space than was originally assigned by the corporation to lessees, causing a revenue loss of Rs 44 crore a year.

“When we started our probe in June, it turned out that the concerned MSRTC staff at the depots had connived with lessees to illegally extend their areas and then use it for their personal gains. The area occupied by these establishments was much greater than was contracted by the MSRTC in the first place. The officials, despite seeing the violation, turned a blind eye to this large- scale fraud,” reads a report (RP/security/ KA/ 1749) of June 25.

Tickets disappeared
Another June report (ST/STY/PA/1546), in possession of mid-day, highlights the disappearance of tickets worth R1 crore by conductors across the state. The reconciliation of manual tickets in nearly 200 depots and divisional offices revealed that tickets worth Rs 1.12 crore had disappeared.

The most missing tickets have been reported in Mumbai, Ahmednagar, Latur, and Gadchiroli, and the report recommends the strictest action against the custodians of the tickets. As many as 50,000 instances of conductors doing ‘some kind of bungling’ were also reported in June alone. “Considering the fact that there are only 36,000 bus conductors, it is evident the pilferage in revenue collection is enormous,” reads the vigilance report.

No tender finalised: Raote
While most of the reports have been forwarded to the chairman, vice-chairman, and managing directors of the corporation’s board, no action has been forthcoming.

The chairman of the board is state Transport Minister Diwakar Raote of the Shiv Sena. Raote took charge of the board barely a month back, after the court ended a long-running tussle between him and the board of the MSRTC, which was headed by Jeevanrao Gore, a relative of NCP leader Ajit Pawar.

A division bench of Justices A S Oka and C V Bhadang, on May 28, refused to order the reinstatement of Jeevanrao Gore as chairman of the board of directors. Raote told mid-day that he has not yet approved any tender and, if any approvals were given, it was the work of the previous board of directors.

“Under me, we haven’t yet finalised any tender and we will have to check if this has been approved by the previous board of directors in the Congress-NCP regime,” said Raote. The minister told mid-day that he has no knowledge of any irregularity in the tender. Senior officials, however, said that they had a meeting with Raote on June 29 and the vigilance reports, including the one on the tender, were submitted to him.

‘Nexus of greed’
Senior officials from the corporation told mid-day that the MSRTC has become a hotbed of corrupt practices, which is contributing to it running into losses, thanks to power tussles within the transport body.

Just this week, the MSRTC’s vigilance cell issued a circular blocking any future inclusion of its 215 staff in the decision-making process in order to make them more efficient. However, the board of directors overruled the circular claiming they had themselves sanctioned the inclusion of vigilance officials in the process.

“If the vigilance officials will start taking decision to award tenders, how will they morally probe these tenders? The MSRTC needs an independent and powerful vigilance cell to stop these corrupt forces and shatter the nexus of greed,” said an official.

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