Arappor Iyakkam alleges corruption in purchase of distribution transformers by Tangedco

In a complaint filed with the DVAC, the NGO has flagged corruption, involving Minister V. Senthilbalaji and others, that is alleged to have caused a loss to the tune of ₹400 crore to the exchequer

Updated - July 07, 2023 07:42 am IST

Published - July 06, 2023 08:00 pm IST - Chennai

The 45,800 transformers were purchased between 2021 and 2023. File photo

The 45,800 transformers were purchased between 2021 and 2023. File photo

Arappor Iyakkam, a non-governmental organisation (NGO), has alleged corruption involving Minister V. Senthilbalaji and other officials in awarding of contracts for supplying distribution transformers of varying specifications — from 25 KVA to 500 KVA.

The distribution transformers were purchased between 2021 and 2023. In a complaint filed with the Directorate of Vigilance and Anti Corruption (DVAC) on Wednesday, Arappor Iyakkam flagged corruption in the purchase of 45,800 such transformers, alleged to have caused a loss to the tune of nearly ₹400 crore to the exchequer.

The NGO has also sought criminal investigation against Rajesh Lakhoni, Tangedco’s Chairman and Managing Director, and V. Kasi, Financial Controller (Purchase).

Addressing a press conference in the city on Thursday, the Convenor of Arappor Iyakkam, Jayaram Venkatesan, urged the DVAC to file an FIR against the public servants and firms involved in the corruption and sought a thorough investigation against Mr. Senthilbalaji, Mr. Lakhoni and Mr. Kasi.

He said evidence was collected after scrutinising 10 tender documents of Tangedco. Public tender data has found that distribution transformers of various capacities were purchased for a total cost of ₹1,182 crore. Noting that a syndicate of contractors had worked in tandem in the purchase of the transformers, Mr. Venkatesan questioned the efficiency and transparency of the e-tender procurement wherein 30 to 40 contractors/manufacturers participated in all the 10 tenders and quoted the same price for the bids.

He also alleged a “total misuse” of the Tamil Nadu Transparency in Tenders Act, 1998.

Referring to the tender quotation details of the 500 KVA distribution transformers, for which the bid was opened on November 23, 2021, and the Tangedco board gave its approval on March 25, 2022, he said there were 26 bidders and all of them quoted the same price of ₹13,72,930. All 26 contractors, he said, were selected as ‘L1’ suppliers of the distribution transformers. The total value for purchasing 500 KVA transformers (800 in total) was ₹63 crore.

Further, comparing the rates of the tender bid for the 500 KVA distribution transformers, Mr. Venkatesan said the final rate per transformer was awarded at ₹12,49,800, while the Government e-Marketplace (GEM) rate was ₹8,91,000 and the cost data sheet of the TNEB Engineers Association was ₹7,89,753. The Rajasthan Government had procured transformers of the same capacity at a cost of ₹7,87,311.

The GEM rate being quoted by electricity officials was wrong as they showed the ‘On load tap changer transformers’, while Tangedco had purchased ‘Off circuit tap changer transformers’, he said.

The Arappor Iyakkam provided similar proof for all the 10 tender procurements, alleging a huge scam. Mr. Venkatesan further said that Mr. Lakhoni had erred legally on two issues — reinstating Mr. Kasi, who was suspended and asked to go on compulsory retirement by the previous CMD, Pankaj Kumar Bansal, on March 19, 2021; and approving the tenders without questioning the ‘collusive bidding’.

Mr. Kasi was the key conspirator of the scam as he had carried out the work from the official residence of Mr. Senthilbalaji, he added.

Annamalai seeks action

Meanwhile, BJP Tamil Nadu president K. Annamalai has demanded action against Mr. Senthilbalaji, senior officials of Tangedco and other employees involved in the alleged scam.

Referring to the details presented by the NGO, he said corruption of such a scale, to the tune of ₹397 crore, would not have happened without the direct involvement of the officials heading Tangedco.

He also thanked Arappor Iyakkam for their efforts in exposing the details of the alleged scam and filing a complaint with the DVAC.

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