Dairy officials in the dock over machinery purchases

Oct 18, 2013, 06:34 IST | Vinod Kumar Menon

RTI reveals how dairy officials across units colluded to float a tender for a Rs 60 lakh machine that the Aarey dairy at Goregaon did not need, allegedly to favour a firm which is yet to supply and install it in entirety

Dairy officials seem to be milking the enterprise to skim a pretty penny on the side. A high-level probe is being conducted by the office of the state dairy development commissioner against senior officials for rushing to float tenders for Rs 60-lakh machinery for Aarey dairy in Goregaon in 2010, which has not yet been installed.

Cash cow: Central Dairy at Aarey Colony, Goregoan East. Pic/Nimesh Dave

Moreover, even before all the equipment was supplied and fitted, 80 per cent of the payment was made to the bidder in advance. The irregularities came to light after MiD DAY obtained documents related to procurement of machines for Aarey’s Goregaon and Worli units under the Right to Information Act.

A proposal for procuring a glycol chilling machine worth Rs 60 lakh and a cream separator worth Rs 32 lakh for Central Aarey Dairy, Goregaon, and a hot water generator worth Rs 8 lakh forKurla dairy was made on September 18, 2010 by then general manager of Greater Mumbai Milk Scheme, S R Virkar.

Incidentally, as MiD DAY has learnt, the Central Aarey Dairy, Goregaon was in need of a homogeniser, but instead, the officials procured the glycol machine. Six days later, the then dairy development commissioner R D Shinde approved the proposal, which was forwarded to the District Planning Office, Bandra -- under the suburban collector -- to get funds to the tune of Rs 1 crore.

Rushed bid
Documents with MiD DAY show that the tender processing began on September 27, 2010, and a request letter was shot off to the directorate general of information and public relations (DGIPR), Mantralaya for release of ads. The advertisements appeared in three local Marathi newspapers, which are not known for featuring commercial tender notices. Moreover, these ads were published before the dairy department could even get the District Planning office’s approval for the funds. The letter sanctioning the finances was received only on October 11, 2010.  According to Mantralaya officials, a tender process cannot begin without obtaining the District Planning’s letter of approval for finance. And ideally, the tender notices should have appeared in mainstream newspapers for better promulgation and healthy competition.

Favoured firm
Soon after the tender was floated, Mahim-based M/S Premier Refrigeration and Air Conditioning (P) Ltd quoted a price of Rs 59.85 lakh for the glycol machine, close to its cost of Rs 60 lakh. The contract was awarded to it against an earnest money of Rs 1.79 lakh. Incidentally, the second bidder (name not provided under RTI) had quoted a price of Rs 64 lakh. Sources say a senior dairy officer had recommended Premier’s name. According to Aarey officials, Premier was paid 80 per cent of the quoted price, that is a sum of Rs 46.40 lakh, even before the supply, installation and commissioning of the machine. Despite numerous reminders to Premier, the machine is not operational even today. Its control panel has not yet been put up. It was only on May 30 this year that the acting GM of Greater Mumbai Milk Scheme, Worli, D D Kulkarni, moved to encash the security deposit of Rs 1.79 lakh given by Premier. “If found guilty, the officers responsible can be tried for dereliction of duty and action will be initiated as per the service rules,” said a senior dairy officer on condition of anonymity.

Another bites dust
RTI documents also reveal that a sleeving machine (for protective wrapping) for Aarey Worli’s Energee drink section was procured for Rs 10 lakh some 18 months ago. And although 80 per cent of its Rs 7.20 lakh cost has been paid, the machine is still lying unused. The machine was installed in 2013 and a trial run was conducted in May. But soon after, a major component was stolen and a police complaint was lodged by deputy commissioner Nitin Badgujar against security personnel. The case is still under investigation. MiD DAY has learnt that an inquiry has been initiated in the matter and a report would be submitted to the government soon.

Chief secretary says
State chief secretary Jayant Banthia, said, “If payments were made even before the machine was supplied, we will have to affix responsibility. Also we have to see if it was done deliberately or if it was an oversight. I will speak to the dairy commissioner.” Officials speak

The then GM of Greater Mumbai Milk Scheme, S R Virkar, said, “The machinery in Aarey was more than 40 years old. It required replacements for efficient utilisation of water, power and furnace oil. So it was decided to procure a glycol machine to allow milk to stay chilled for a longer period.”

He added, “The machine was installed successfully at Sangamner dairy and it should have been installed in Goregaon soon after. My role as GM was limited, and all I can say is that my intentions when we procured the machine were good.”

When contacted, Dairy Development Commissioner Y E Kerure said, “I will inquire into the matter and will submit my report to the government.” Dairy secretary Anil Digikar said, “I am unaware of such an incident and will have to look into it.”

Questions that remain unanswered
>> Why was the glycol-chilling machine procured when Central Dairy, Aarey Goregaon needed a homogeniser?

>> Why was the firm, Premier Refrigeration, which was suggested by a senior dairy official considered for the bid?

>> Why was a tender amounting to Rs 60 lakh floated even before approval from district planning commission?

>> Why was 80% of the machinery cost given to the bidder before supply and installation of the glycol machine?

>> Why has the machine’s control panel not been installed till now?

>> Why was no action initiated after the bidder failed to fulfil the tender agreement?

>> Why was the sleeving machine for Energee drink not installed for over 18 months even after it was supplied? 

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