Tender transparency, plugging loopholes can save exchequer thousands of crores

Chennai: Tender-related scams continue to remain among the biggest sources of corruption in Tamil Nadu, with fresh controversies in the Greater Chennai Corporation and rural development department once again exposing loopholes in the system. Two weeks ago, both departments floated limited tenders in separate cases to execute works, triggering allegations of favouritism and lack of transparency.Though the state govt swiftly withdrew the tenders and suspended officials concerned, and also issued a series of directives to curb corruption, industry stakeholders and former officials say systemic reforms are needed to prevent such complaints from recurring and it would help in saving over ₹5,000crore for the exchequer per annum.Under the Tamil Nadu Transparency in Tenders Rules, 2000, all works above ₹25 lakh must be published in district bulletins inviting competitive bids. However, officials continue to float tenders worth much higher amounts for only a few hours: a practice widely seen as “setting a contractor”.Similarly, while tenders above ₹50 lakh must be published in the state bulletin and newspapers, officials split multi-crore works into six or seven smaller packages valued at ₹49 lakh each to avoid wider publication and competition. This was the case with GCC’s latest tender on renting earthmovers, which were cancelled.Jayaram Venkatesan, convenor of Anti-Corruption NGO Arappor Iyakkam, said the tender transparency rules require an amendment, mandating competition even at financial qualification. “At the moment, competition is mandated only at technical stage. Many contractors are nudged out with various certificate and machinery demands. Only the selected contractor enters the financial stage. If competition at finance stage is mandated, there will be competition and you cannot set tenders,” he said.Stakeholders also flagged non-adherence to standard schedule-of-rates for construction materials and labour, saying this allows artificial inflation of project costs by 10% to 20%. “The scheduled rates account for harsh weathers and possible delays too. Yet, the “pre-setting” nature creates a space for officials to confidenty quote inflated prices knowing there won’t be any competition. If there’s competition, the govt can actually allow tenders at their own rates, saving the exchequer money,” said Venkatesan.Former MAWS officials said the problem lies less with the digital tendering system and more with alleged interference in deciding the lowest bidder (L1).“When I was the Ambattur municipality commissioner in 1992, for a work worth ₹1.92 crore, a minister sent a recommendation with three names, and told me to fix the tender among them by splitting works. I went ahead and moved for open-tendering through newspaper ads, when digital tendering wasn’t there too. Now, it is easier as everything is digital. Officials have to be honest from higher level to lower levels, to not collude with politicians. Only if this is there, tenders cannot be tampered with at any level. Appointing honest officials at the scrutiny stage is key,” said former MAWS additional director D S Sivasamy.Greater Chennai Contractor Association president R Ramarao said the state could save a minimum of ₹5,000crore if they prohibit human interference in tendering. “That’s the amount of dirty money leakage from all key executive departments of Tamil Nadu. If end-to-end digital tendering is followed, the 10.5% commission culture can be eradicated,” he said.