IP set regularisation scheme comes under CAG scanner

IP set regularisation scheme comes under CAG scanner

Unnecessary procurement and delay has cost Bescom crores of rupees

CAG has found that the Bescom has placed an order to procure material for regularising 60,000 unauthorised Irrigation Pumpsets (IP sets) after inviting tenders in 2005, when only 14,670 sets were registered for regularisation.

The company had invited tenders in March 2005 to procure line materials to meet the requirement of the first quarter of 2005-06 as well as for regularising 60,000 unauthorised irrigation pumpsets (IP sets). The total cost was assessed at Rs 28.80 crore, based on the lowest offer received.

On July 2005, the Central Purchase Committee placed purchase orders on the two bidders, Dhanalaxmi Engineering Enterprises and Ratnatray Enterprises for a total value of Rupees five crore, the limit up to which it was vested with powers, with January 2006, fixed as a deadline to supply the material. The procurement of remaining quantity of line materials for Rs 23.72 crore was approved in September 2005, with a delivery schedule fixed between December 2005 and March 2006. The delivery schedule was extended to August 2006 and subsequently to December 2006.

CAG on February 2008 had observed that the Board of Directors, while approving the procurement of balance materials in September 2005, did not consider the fact that only 14,670 IP sets were registered for regularisation till then.

It further observed that the company extended delivery schedule twice to avoid inventory pile up and lack of adequate storing space. Despite this, line materials valued at Rs. 4.90 crore supplied between August 2005 and March 2008 were lying idle at the end of June 2008.

Thus, improper assessment of the requirement and consequent procurement of line materials resulted in blocking of funds to the tune of Rs 4.90 crore. Though the Government on June 2008 stated that the non-utilisation of the materials was due to the receipt of only 15,000 applications for regularisation of IP sets as against 60,000 unauthorised IP sets, the extension of due dates for regularisation of the same did not help in any way.

However, CAG refused to accept the government’s reply saying that the 14,670 applications for regularisation of IP sets were received as on September 2005 and in spite of non-receipt of further applications for regularisation, the company placed purchase orders in Sept 2005 for balance quantities required for the entire 60,000 IP sets.

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