Indian Bicycle Manufacturers Association has written a letter to Karnataka governor Mr HR Bhardwaj and chief minister Mr BS Yeddyurappa to float a new tender for procurement of 1,127,376 bicycles in state for boys and girls studying in 8th standard, belonging to below poverty line for the year 2011-12.
Karnataka government is all set to procure bicycles for boys and girls studying in 8th standard, belonging to below poverty line for the year 2011-12. A noble cause undertaken by the Karnataka government.
However there is more to it that meets the eye. The Ministry of Education through the Department of Public Instructions has floated a Tender for the Procurement of Bicycle as an eye wash totally violating the Central Vigilance Commission, the World Bank Guidelines and the Karnataka Standard Tender Documents for Procurement of Goods and Equipment under the Karnataka Transparency Act has also been grossly violated.
Mr KK Seth VP of IBMA said that "Similar issue was raised last year also then the Karnataka Chief Minister had ordered enquiry into the whole tender system as why a stringent term of INR 200 crore turn over has been put in the tender against CVC norms for tendering. But the same clause is again being used."
According to IBMA, the stringent terms laid down by the government, which outrightly favors four Manufacturers where as there are over 40 small and medium quality bicycle manufacturers in the country. Despite committed efforts by the Indian Bicycle Manufacturers Association to apprise the government of their shortcomings in terms of restrictive terms & conditions which resulted in the Karnataka Government paying higher price for the same Bicycle compared to other States under the same Bicycle scheme last year, this time too Karnataka Government is playing a mute spectator to the recommendation of the IBMA and National Small Scale Industries Corporation.
This year small bicycle manufacturers had tendered through NSIC offering 15 % less rate than these major four cartel manufacturers, but it was turned down by Karnataka Government to help these four manufacturers.
As done last year, this time too the procurement has been invited in four schedules and there are precisely four manufacturers who qualify to participate in this tender. In 2010, the four manufacturers had formed a cartel and divided the four packages equally amongst themselves and charged the government INR 2600 to INR 2700 for boys and girls bicycles while open dealer price of these manufacturers for similar bicycle is less than INR 2200. The bicycles of same companies are available at much less cost than the Karnataka Government is buying at.
One of the bidders M/s Atlas Cycles (Haryana) Limited supplied similar bicycle to government of Rajasthan at INR 2065 or approximately INR 400 lower than government of Karnataka. Prices of other states who have open competition are INR 300 to INR 400 lower than Karnataka while specifications of Karnataka tender also have been lowered down in comparison to other states to pass on benefit to cartel members.
Stringent & restrictive terms & conditions have been laid where in only those Bicycle Manufacturers having a business turnover of INR 200 crores or more can qualify to participate and further the manufacturer should have supplied earlier 300% of the proposed quantity to establish Satisfactory Past Performance, both these Pre conditions are in violation of the Central Vigilance Commission guidelines, which suggest 30% Turnover of the estimated Contract Cost & 40% Past Supplies is sufficient for these clauses. Even the World Bank norms do not require turn over more than 30% of the approx purchase value. A manufacturer who wants to participate for supplying in one package which has been allowed in terms, this supply value shall be less than INR 20 crores only. Then why he should be asked to quality for total value of all the 4 divisions or INR 200 crore turnover questions IBMA.
Even neighboring state of Tamil Nadu has kept turnover clause of INR 10 crores only for procurement of 5,32,000 bicycles while other states like Rajasthan, Jharkhand, MP are having no such restrictive clauses. With fair competition they are purchasing bicycles at much lower prices but higher quality than Karnataka. It is clear that it has been done with the conspiracy to eliminate a healthy competition and to debar quality manufacturers from participating in this procurement process, as their participation would result in fair prices and better quality for the government of Karnataka but with no benefits to the officials.
For participation tender has been divided into 4 groups so that all the four pre decided manufactures could qualify and divide quantity amongst themselves but for qualifying in participation in bid, turnover has been fixed total INR 200 crore. It is learnt from the previous Bicycle procurement made by the government of Karnataka that officials of the department have worked hand in glove to turn a blind eye to the representation made by the Indian Bicycle Manufacturers Association & other Quality Bicycle manufacturers. This time too this matter has been brought to the notice of all higher authorities including concerned minister and CM and if no action is taken by the government this time too, it will be well established that the Department of Public Instructions has vested interest in this procurement and has the blessings of higher authorities.
