THIRUVANANTHAPURAM:The audit report of the Comptroller and Auditor General tabled in the Assembly on Tuesday made a scathing attack on the functioning of the Malabar Cements saying the state-owned company has been functioning violating provisions of the Stores and Purchase Manual (SPM) related to purchase, e-tender, fixation of validity of tender, splitting of purchase orders, collection of EMD, security deposit, and compromising BIS standards in production, resulting in production loss.
This comes a day after the company’s files went ‘missing’ from the High Court. The files went missing were part of a 2015 petition, seeking a CBI probe into some alleged instances of corruption, including the violation of rules in import of fly ash and limestone. The CAG audit found that there had been gross violation of rules in 21 tenders it examined out of the 40 tenders and 49 purchase orders (POs) valuing Rs 190 crore out of 104 POs issued during 2014-15 to 2016-17 period.
In four out of 21 tenders scrutinised, the company divided the tendered quantity to multiple bidders at lowest rate even though the lowest bidder was ready to supply the entire quantity. Further, the company incurred a net loss of Rs 3.91 crore by failing to finalise the bids within the validity period of tenders envisaged in SPM.
For instance, the company dragged its feet by not issuing the purchase order within the offer validity period of 60 days from the date of opening the tender. Later, price quoted for the coal Rs 6,344 per/MT had to be purchased at a rate of Rs 8,689 per/MT to meet emergency requirement, incurring an extra expenditure of Rs 1.75 crore, which had also affected production after non-availability of imported coal on time resulting a loss of Rs 2.16 crore, the report found.
Further, in 11 out of the 21 tenders scrutinised, there was a short collection of the security deposit to the extent of Rs 2.03 crore. And the company didn’t terminate the contract to recover risk and cost amount of Rs 2.02 crore incurred in procurement from alternate sources in three cases. Another irregularity was found in the procurement of quality coal to the company.