Author: J
Gopikrishnan
Publication: The Pioneer
Date: March 19, 2012
URL: http://dailypioneer.com/home/online-channel/360-todays-newspaper/50852-us-loco-giant-pits-montek-against-planners.html
In the midst of political turmoil over the railway fare hike, an intense fight is going on in higher echelons of bureaucracy over the selection of bidders for two locomotive factories that then Railway Minister Lalu Prasad Yadav had announced for his parliamentary constituency in Bihar in 2009.
Publication: The Pioneer
Date: March 19, 2012
URL: http://dailypioneer.com/home/online-channel/360-todays-newspaper/50852-us-loco-giant-pits-montek-against-planners.html
In the midst of political turmoil over the railway fare hike, an intense fight is going on in higher echelons of bureaucracy over the selection of bidders for two locomotive factories that then Railway Minister Lalu Prasad Yadav had announced for his parliamentary constituency in Bihar in 2009.
In the 2009 Railway
Budget, Lalu had announced setting up of one electric locomotive factory at
Madhepura and another diesel loco factory in Marhowra on PPP model.
The process of
selection of bidders has pitched two key Ministries - Railways and Finance -
against the Planning Commission. Top officials of Railway Board and Finance
Ministry have objected to the proposals of Plan panel to change the
Cabinet-approved bidding process and supply conditions for these two pending
projects, which have reached nowhere in three years.
The official
communication and file notings available with The Pioneer show that top
officials of Railway Board and Finance Ministry protested over the changing of
the Cabinet decisions to favour certain bidders by Plan panel deputy chairman
Montek Singh Ahluwalia's Advisor Gajendra Haldea.
For executing the
bidding process, the Cabinet in 2009 formed an Empowered Committee consisting
of officials drawn from Railway Board, Finance Ministry and Planning
Commission. The controversies started when Haldea mooted some changes last year
in the Cabinet-approved proposal.
In case of Madhepura
project, senior officials of the Railway Board and Finance Ministry noted down
that the minutes of the meeting were also "changed" and
"misquoted" to propose major changes in the bidding documents to
favour the US
giant, General Electric.
In a series of
communications between the Empowered Committee members, Finance Ministry and
Railway Board officials have stated that Haldea's proposal to change the
Cabinet approved bidding procedures and supply conditions would place an extra
burden of more than Rs16,405 crore.
Sources told The
Pioneer, in several meetings of the empowered group, heated exchanges took
place and some members alleged that these changes were introduced to suit
General Electric - the lone bidder for the project.
In the bidding
process of Marhowra project also, top officials of the Railways and Finance
Ministries protested Haldea's high-handedness. "Haldea apparently thinks
that India
is a Banana Republic that can be forced to accept a con game….," noted
Sanjiv Handa Member (Mechanical) of Railway Board in a note seen by the Railway
Board Chairman.
In the same note,
Additional Member (Production Unit) SK Sharma of the Railways wrote that
"it is unfortunate that professionalism, probity and regard for highest
standards of integrity of the mechanical directorate are being questioned by
resorting to sensationalism, misinformation and slander, rather than reasoned
debate. It is for the investigators to determine whether this was part of a
larger agenda aimed at compromising the Indian Railways interest."
The Finance Ministry
officials also expressed displeasure on changing of Cabinet-approved bidding
and supply conditions. A Railway Board note of June 28, 2011 read,
"Economic Affairs Secretary R Gopalan specifically asked financial
commissioner the decisions of the Empowered Committee at the behest of the
bidders will need to be seen with regard to their financial aspects so as to
ensure that gaming by the bidders is ruled out and Railways interest will not
be compromised. The minutes do not include these concerns of the Secretary,
Economic Affairs."
In a communication to
Montek on February 9, Planning Commission Member Secretary Sudha Pillai
questioned the authority of Haldea for approving the changed proposals, which
he himself mooted.
"Subsequently,
several amendments that were proposed to the terms approved by the Cabinet were
also admittedly authored by him. These proposals altering the terms of the
proposed contracts in significant ways were quickly endorsed by the
Infrastructure Division (headed by Haldea), bypassing me on some occasions.
"However, these
amendments when subjected to detailed discussion and scrutiny by the Empowered
Committee were found to have serious implications which had not been adequately
addressed. It was clear that these amendments were not subjected to independent
and impartial scrutiny. This created a very embarrassing situation for me as a
member of the Empowered Committee," said Sudha Pillai in a communication
to Montek.
Tug of war
* Montek's Advisor
Gajendra Haldea moots changing of Cabinet approved bidding and supply
conditions for Madhepura Electric Locomotive Factory
* Finance, Railways
officials and Planning Commission Members protest and say these changes are to
favour US giant General Electric at an extra burden of Rs16,405 crore
* Empowered Committee
of Cabinet objects to Haldea's proposals
* Railway officials
also protest against Haldea's suggestions on Marhowra Diesel Loco Factory
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