CHENNAI: The Commissionerate of Handlooms and Textiles (CHT) failed to use the e-procurement system and prevent bid rigging during the procurement of yarn for government school uniforms during the 2021-22 academic year, resulting in a loss of Rs 4.8 crore as more than 1,000 tonnes of yarn was procured at prices higher than the market rate.
The CAG report has recommended an investigation into bid rigging through cartelisation and the resulting losses apart from making the e-procurement system mandatory. The report also pointed out that the commissioner of school education (CSE) and the director of elementary education (DEE) failed to verify utilisation certificates submitted by CHT, leading to Rs 33 crore being blocked in a bank account from 2015-22. Based on the requirement for uniforms given by CSE and DEE, CHT procured 3,011 tonnes of yarn through tender and 2,876.08 tonnes of polyester cotton yarn without tender.
While open tenders were invited, only three bids were received from yarn traders, and no bids were received from yarn manufacturers. The Tender Acceptance Committee (TAC) finalised the supply rate on January 29, 2021, and it was noted that the same individuals represented three companies in different instances.
The report highlighted that CHT didn’t use the e-procurement system despite receiving only three bids. “The prevalent market price at that time ascertained from the Southern India Mills Associations was Rs 438 per kg, but due to bid rigging, CHT procured the yarn at a higher price through the first bidder at Rs 475 per kg.
With regard to procurement of 1,300 T of combed dyed cotton yarn alone, Tamil Nadu government approximately incurred an avoidable excess expenditure of Rs 4.81 crore,” the report said. While the state government said that the National Handloom Development Corporation Limited (NHDC) rate was fixed by TAC, scrutiny of tender proceedings did not reveal why it was preferred over the Southern India Mills Associations rate which was lower.