Rs 100-crore e-tendering scam: BMC engineers manipulated system

Sep 17, 2014, 06:22 IST | Laxman Singh

Caused losses to civic body, taxpayers by opening up electronic system late at night or early in the morning for their favoured contractors to bid, and shutting it off for everyone else, says BMC official

The BMC’s ambitious plan to reduce corruption and bring in more transparency by introducing the e-tendering system seems to have backfired, with vigilance officers detecting a R100-crore scam in the process.

While an inquiry has been initiated against 21 engineers from 9 wards, mid-day has found that an ingenious modus operandi was being used by the accused to favour certain people, costing the BMC, and the taxpayers, crores of rupees.

E-tendering was introduced two years ago to replace civil works contracts (CWCs) for petty works at the ward level, and the involvement of its own engineers in the alleged scam has made the civic body rethink the system. A highly placed official in the BMC said the engineers misused the SAP online bidding system for their own gain and caused losses to the civic body.

“E-tendering works pertain to small contracts (Rs 3 lakh - Rs 7 lakh) for minor road, drain, footpath repairs in wards. The engineers formed a nexus with some contractors and gave them the time when the SAP system was ‘open’ and could be used for filing their bids. Most of the time, this was done at midnight or early in the morning, so that other bidders would not find out,” said the official.

“After their favoured contractors finished bidding, the engineers made sure the system did not work for other bidders. This began barely a month after the e-tendering system was introduced,” he added.

The engineers’ favoured contractors bid 5-25 per cent below the cost set for the work. However, there were other contractors who wanted to bid 40-50 per cent below the cost but could not do so because of the nexus. The BMC ended up paying more for the works because of this, said the official.

From 2012 to 2014, work worth Rs 600 crore has been done under e-tendering, and officers from the BMC’s Test Audit and Vigilance Officer (TAVO) department had found lapses in nine wards which are R-South (Kandivli), R-Central (Borivli), R-North (Dahisar), P-South (Goregaon), P-North (Malad), K-East (Andheri East), K-West (Vile Parle, Andheri), H-East (Bandra) and S (Bhandup). 21 engineers are accused in the scam and Municipal Commissioner Sitaram Kunte had ordered an inquiry in the matter.

Official speak
Opposition leader and Congress Corporater Devendra Ambekar said, “We want this whole system to be scrapped. The nexus between engineers and contractors resulted in a loss of around R100 crore. We will raise this issue in the BMC’s general body meeting. What is the use of having e-tendering in place of CWC if the same thing is happening?”

Additional Municipal Commissioner Rajeev Jalota said, “I had received a complaint on this matter from someone. It was a handwritten letter, which I then forwarded to the TAVO department and asked them to report in 10-15 days, which they did.

They have done a good job and now we have started working on the system already. We realised there is a need to have thorough IT professionals who can get us the details of this case and how the engineers manipulated things.”

“There were about 21 engineers, against whom the harshest of action will be taken. But, a detailed inquiry is still going on. We do not want such things to be repeated and, hence, the action will speak for itself. As of now, we have found the losses to be around R25-30 crore,” he added.

- Inputs by Chetana Yerunkar

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