The Public Works Department has virtually been converted into a Public Waste Department thanks to a contention circular that has a chequered history of being withdrawn following serious objections by the Vigilance Department, only to be reinstated not once but twice.
The circular in question pertains to acceptance of tenders for PWD works. The circular stipulates that all quotations for works which are below 20 per cent of the estimated cost should be rejected.
True the circular was first issued at the instance of then PWD Minister Ravi Naik who was also the Deputy Chief Minister on 2nd March 2001 and the reasons given for it were: “in order to maintain proper quality of works, tenders pertaining to roads, buildings, water supply and sewerage works quoted more than 20 % below the estimated cost put to tender, should be rejected.”
However, the Vigilance Department while investigating a complaint lodged with it on 29th January 2002, found that contractors were quoting exactly 20 per cent below the estimated cost and came to the conclusion that the circular was the cause of this new phenomenon.
The vigilance department also noted that some contractors were being favoured under this new scheme and noted that C V Pereira had bagged as many as six tenders.
The Additional Director, Vigilance in his note dated 18th April 2005 opined that the circular was “illegal and of distortionist nature inclined towards protecting the interest of Contractors rather than that of the government.”
In fact, Ashwani Kumar, Secretary Vigilance in his note dated 27th July 2005 had some very critical comments on the circular wherein he very categorically asserted that it was in the interest of the government that there is a competition amongst the bidders to bring down the level as low as possible.
He also rejected the PWD’s contention that tenders going below a certain limit would result in poor quality of works, arguing that the PWD engineers have to ensure the quality of work and further pointing out that contractors would be quoting intelligently and would not quote against their interest.
Following these observations, the Governor of Goa recommended that the circular be amended and accordingly it was withdrawn on 7th June 2005.
The main grounds for withdrawing the circular were that it was in violation of the Central Vigilance Commission norms, in violation of Central Public Works Department norms, not in public interest and not the correct method to ensure quality of work.
However, surprisingly two months later, on 12th August 2005 to be more precise, the circular was reinstated for no reason except a lame one stating that a government official misinterpreted the direction and did not seek the Vigilance Department’s opinion while reinstating the circular.
The only reference to its reinstatement is apparently a reference made to it by then Panchayat Minister Subhash Shirodkar at the second cabinet meeting held on 15th July 2005.
However, two years later, on 16th August 2007, the circular was withdrawn once again and this time one of the reasons cited was to avoid “probably malpractices amongst the contractors to quote exactly to the tune of 20 % below.”
Thereafter, Churchill Alemao after taking over as the PWD Minister, moved a note on 24th September 2007 to reinstate the circular stating: “considering the large number of works tendered enforcement of quality becomes that much more difficult particularly when on one hand tenders are accepted at rates based on GSR….” And further stated that “it would be prudent to take pre-emptive measures towards quality control by ensuring that works are taken at workable rates.”
Following his directions, the circular was once again re-instated on 12th November 2007. In doing so, the political compulsions that allowed this to happen is revealed. When the file was moved to reinstate the circular, the PWD Secretary noted that approval from the Finance Department and concurrence of the Chief Minister should be got.
Given the various grounds raised against the circular by the Vigilance Department, the then Finance Secretary recommended that the Finance Minister “may like to take a view” on it.
The then Finance Minister Dayanand Narvekar very conveniently noted in the file: “I will leave it to PWD Minister” and having received the sanction from the Finance Minister, the circular was re-instated.
The question is why is this circular making a comeback time and again despite the strong stand against it taken by the Vigilance Department which convinced even the Governor to recommend its amendment? The reason is quite glaring when one studies the methodology adopted by the PWD while awarding the works.
Earlier, when there was no cap on the lower limit, five or six contractors would form an informal cabal and bid for the work. However, only one contractor would bid and that too more than the estimated cost but within the prescribed margin. The additional amount above the estimated cost would be distributed between the contractors who did not bid. In fact, sources in the PWD revealed that there are some contractors who survive only on collecting their share for permitting some other contractor to take the work as they do not execute any work for the PWD but only bid.
However, the ground rules are now changed as contractors bid exactly 20 per cent below the estimated cost. Sources in the PWD and interaction with various contractors indicate that at present, the PWD minister decides who should get the tender and how the selection is done is known to all and sundry as kickbacks and commissions are involved.