The Hindu Business Line : National Aviation Co joining PSUs in a bid to check fraud in tenders

Mumbai, Feb. 27 National Aviation Company of India Ltd (NACIL), the company formed after the merger of Air India and Indian, would soon be joining the 20 large public sector enterprises namely ONGC, SAIL, Concor, which have started taking steps to check kickbacks and malpractices in global tenders floated by them.

The key feature of the mechanism called Integrity Pact is a provision for having independent monitors who will supervise the tendering processes from the time of their issuing to their execution.

The monitors are chosen from the people of high integrity and stature in the society who have served on important posts such as the Comptroller and Auditor General, the Chief Vigilance Commissioner, Secretaries to Government of India and others.

In India, the Central Vigilance Commission or CVC is administering this anti-corruption mechanism.

It is a tool developed in the 1990s by Transparency International, which binds the company issuing the tender as well as the parties applying for it in a moral bond of not indulging in any malafide practice during the tendering process, said Mr V.K. Gupta, Additional Secretary, CVC.

According to Transparency International, an NGO working against corruption globally and the founders of the instrument, these pacts could help save Rs 60,000 crore annually, which amounts to 10 per cent of Rs 6 lakh crore the Central and State Governments spend on procurements and construction work every year.

This, in turn, is 15 per cent of India’s Gross Domestic Product of Rs 40 lakh crore.

Be it NACIL looking for better accommodation for its travelling cabin crew staff, Airports Authority of India looking for a third-party to develop an airport, ONGC scouting for oil exploration, infrastructure tenders floated by Steel Authority of India Ltd or any other requirements or procurements by any public sector company, floating of tenders, inviting technical and financial bids is the way of functioning.

Transparency International says that malpractices in the tendering process start right from the stage of notice inviting tenders.

While giving out specifications of supplies, often the estimated cost is made higher or the tender specifications are such that could suit a particular firm and so on.

Similarly, cases of participating firms indulging in illegal means to get the contract are also very frequent, says the organisation.

Mr B.R. Lall, a retired IPS officer and a member of the Indian chapter of the NGO, told Business Line, “The pact would lead to speedy payments for contractors and a tendering process which is more fast and transparent.”

The companies agreeing to implement the pact are required to include it in their subsequent tenders.

ONGC was the first to implement the mechanism in 2006.

NACIL has recently agreed to include the pact in all its contracts of the value of Rs 10 crore and above.

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