Delayed tender process cost Tangedco Rs 57 crore in additional expense: CAG report

CHENNAI: The Comptroller and Auditor General of India (CAG) has pulled up a Tangedco official for the delay in processing of a tender for conductor-procurement, which led to the cancellation of the initial tender where bidders had quoted a lower price. This resulted in an avoidable additional expenditure of Rs 57.06 crore.

In the CAG report for March 2022, tabled in the State assembly on Tuesday, CAG said that Tangedco, in February 2021, had floated an e-tender for procurement of 30,000 km of 7/2.50 mm all-aluminium alloy conductor for effecting the tatkal scheme agriculture for 2020-21.

It said that the bids for eligible bidders were opened in May 2021, and Siri Conductors Manufacturers, Warangal, had emerged as the lowest bidder (L1) quoting Rs 23,815.42/km but offered to supply only 3,000 km. Hence, Tangedco negotiated with other bidders and 17 out of the 22 agreed on June 24, 2021, to match the price of the L1 bidder.

However, they requested to make payments within 45 days from the date of acceptance of materials, against the existing payment condition of 90 days and to consider the quarterly delivery schedule against the monthly delivery schedule mentioned in the tender clause.

The report noted that Tangedco had extended the tender validity up to August 31 with the concurrence of all 17 bidders. The utility submitted the proposals for the modification of the payment and delivery schedule to the Board Level Tender Committee (BLTC) on August 23, 2021, which accepted it on the same date.

However, it had failed to immediately communicate it to the bidders and to issue purchase orders within the accepted time schedule of August 31, 2021. After the bidders refused to yet another extension upto September 2021, the tender was cancelled.

Subsequently, the audit report said that another tender was floated in January 2022 for the supply of 60,000 km of AAA conductor by including the terms to pay within 45 days from the date of acceptance of material and the quarterly delivery schedule. After evaluation and negotiation, the rate of L1 bidder ANVIL Cables, Jharkhand, was finalised at Rs 42,834 per km. Totally, 26 purchase orders were issued in February 2022.

“All the 22 bidders (who were found to be eligible in the first cancelled tender) were again selected, and the tender was finalised in January/February 2022, and orders were issued. Thus, the suppliers who offered lower prices in May 2021 were unduly benefited by awarding the contract at a higher price within one year,” it said, noting that the additional expenditure of Tangedco was Rs 57.06 crore.

The CAG report recommended that the State government should ensure that responsibility should be fixed on the concerned officials for the undue delay in submitting the proposal to BLTC, which had forced Tangedco to incur additional expenditure.