Exchequer lost Rs 5 cr to misuse of KTPP exemption

Exchequer lost Rs 5 cr to misuse of KTPP exemption

Keonics accused of overcharging for equipment

The Karnataka State Electronics Development Corporation Ltd (Keonics) caused losses to the state exchequer by misusing the exemption it enjoys under the Karnataka Transparency in Public Procurements (KTPP) Act. 

The office of the Accountant General’s recent inspection report exposes discrepancies and additional expenditure caused in the procurement of various materials by Keonics for government and recognised private Industrial Training Institutes (ITI) under the Directorate of Employment and Training (DET). 

The discrepancies were found in the purchase of solar lights and other equipment. The inspection report stated that the DET failed to evaluate the price quoted by Keonics with the prevailing market rate. An additional expenditure of Rs 4.47 crore was found in the procurement of solar study lanterns in 2015 because they were purchased at a higher cost than the market price. 

Similarly, Keonics came up with a proposal in 2014 to supply solar LED lighting system by taking exemption under the KTPP Act. The supply of 381 solar streetlights to 77 government ITIs in backward areas was assigned to Keonics. Again, the DET agreed to the price quoted by Keonics without verifying the market price. The DET could have saved at least Rs 38.63 lakh had there been a verification of the market price, the report stated. 

Explaining the reasons for the loss, the report pointed out that in the said case, the report stated that the exemption under 4 (g) of the KTPP Act lacked justification. It also said DET representatives were not part of the price finalising committee before fixing the price. “The rates charged by Keonics had been far higher than the market rates,” it stated. 

Keonics is one of the agencies that got exemption under Section 4 (g) of KTPP Act. The exemption empowers the agency to skip calling tenders. The agency invites quotations from private companies or individuals and chooses the lowest quotation. 

In the past, discrepancies were found in the execution of works and procurement of material through agencies that get exemption under the KTPP Act. Several reports were filed from the Upalokayukta after discrepancies were found during enquires on works assigned to agencies like the Karnataka Rural Infrastructure Development Limited (KRIDL), Nirmithi and Nemmadi Kendras.