Another Scam in MP, Opposition Alleges CM’s Involvement in E-tender Scam

While the Vyapam scam continues to haunt the Madhya Pradesh government, another multi-crore corruption case, ‘e-tender scam’, has surfaced in the state just a few days before the assembly polls.

Emergence of this scam has given ammunition to the opposition parties in order to corner the government when polling is just 10 days away. Congress on Wednesday alleged that there was a Rs 8,000 crore-scam in allotment of e-tendering contract in MP.

“The estimate of the worth of the scam could go up to Rs 50,000 crore after the investigation, according to the documents that the party possesses,” claimed Congress Chief Spokesperson Randeep Singh Surjewala, while addressing the media in Indore.

He further alleged that MP Chief Minister Shivraj Singh Chouhan and State Chief Secretary BP Singh could have played a role, and they could have tampered the evidence. He promised that the Congress will probe the matter if voted to power in the state.

Before Congress, AAP Madhya Pradesh too had raised this issue a month ago, and had claimed that the scam is worth Rs 8935 crore.

Talking to Newsclick, AAP state convener Alok Agrawal alleged that despite several irregularities, highlighted by the software company in its report, Major Project Control Board (MPCB) headed by Chouhan and Singh cleared the tenders. 

“CM Chouhan is the head of MPCB, and all the tenders have been cleared by him. So, he is directly responsible for the scam. More so, instead of punishing, Chouhan has rewarded Chief Secretary BP Singh, and postponed his retirement for six months, and has transferred the officer who had identified the irregularities,” alleged Agrawal.

The state government had transferred Madhya Pradesh State Electronic Development Corporation’s (MPSEDC’s) Managing Director Manish Rastogi, who reportedly identified this scam, to other department soon after the news of the scam broke out.

Currently, the matter is before the Economic Offences Wing (EOW) of the state police.

E-tender scam and its timeline

In January 1, 2013, the MPSEDC and its partner firm TCS entered an agreement with a Bangalore-based Antares Systems for customisation, integration and data migration, implementation and maintenance of e-procurement and tendering portals of the state government.

On March 3, 2018 Tender Opening Authority (TOA) PK Guru received an error message saying ‘the content has been modified’ on the e-procurement system while flagging off the tender of Madhya Pradesh Jal Nigam worth Rs 6,000.

Guru reported the error to the MPSEDC’s then MD Rastogi. Rastogi conducted an investigation, and issued a ‘show cause’ notice to the service providers TCS and Antares System. In reply, Antares said the tender was indeed rigged to favour the companies by breaching the system.

As the Antares submitted its report, Rastogi forwarded it to BP Singh, who, in return, marked it to EOW of the state police, and directed to register an FIR.

But, the EOW conducted a preliminary enquiry in June 2018, and no FIR has been registered so far.

Findings of the report

Acting on the direction of Rastogi, Antares had conducted an internal enquiry which concluded that the tendering process that was flagged by Guru, and that involved three water supply tenders worth Rs 600 crores was breached to benefit M/S GVPR limited, The Indian Hume Company Limited and JMC Projects (India) Limited.

The software company Antares’ investigation said that the entire process was breached with the help of a dummy ID PT_4 that was allotted to M/S OSMO IT Solutions Bhopal to carry out performance testing of the tendering portal in June 2016. More so, the OSMO IT Solutions is also empaneled with the Madhya Pradesh Agency for Promotion of Information Technology for training purposes.

Antares, in its finding, further concluded that the bids of the three companies mentioned above were modified to make them the lowest bidders after seeing the price bids of the remaining companies.

Later, on May 10, 2018, TCS and Antares informed MPSEDC that six more tenders of the Public Works Department, Water Resource Department and the MP Road Development Corporation that were similarly rigged.

Soon after the scam surfaced, state government cancelled all nine tenders, amounting to a little over 3,000 crores.

However, the dummy id PT_4 through which the system was breached was allotted to M/S OSMO IT Solutions of Bhopal in 2016. Since then, tenders of worth over Rs 10,000 crores have been processed by MPSEDC.

According to an estimate, MPSEDC, TCS and Antares have processed tenders worth over Rs three lakh crores since 2013 – when the three had formed an agreement.

When contacted, Minister of Revenue and Science and Technology Umashankar Gupta said, “We have identified the scam just because of the software. Earlier, there were no such mechanism. The government has cancelled all the tenders that were rigged, and has asked EOW to investigate the matter.”

Companies involved in scam as per the finding of the report by MPSEDC MD, sent on May 8, 2018 to chief secretary

1. GVPR Engineers Limited

2. Indian Human Company Pipe Company Limited

3. JMC project (India) Limited

Tenders allotted to companies who were involved in the alleged scam

1. JMC Project (India) won the bid of Narmada-Jhabua-Petlawad-Thandla-Sardarpur Micro lift Irrigation Project worth Rs 1699 crore, and  Nagalwadi Lift Micro Irrigation Project of Rs 949 crore in June 2018.

2. GVPR Engineers Limited won the bid of Bhikangaon-Binjalwara micro lift irrigation scheme of Rs 706 crore, and Jawar Irrigation project of Rs 411 in August 2018.

Source: Finding report of Antares