The Comptroller and Auditor General (CAG) of India has pointed out in its latest report that power equipment major BHEL awarded contracts worth Rs 26 crore to a banned company.
Heavy Power Equipment plant, a unit of BHEL, had banned a company, whose name is not provided in the report, in March 2006 as it was found to have indulged in forming a cartel to bag an order quoting high prices.
However, the Project Engineering Plant, another unit of BHEL awarded two projects to the banned firm in June 2006 and October 2006, respectively.
The CAG report stated that these works could not be considered as “ongoing” as financial bids had not been opened at the time of issue of the ban order.
The BHEL management stated that the ban order was not implemented to avoid delay in the procurement process and by accepting the bid of the banned firm, the company had, in fact, gained Rs 5 crore compared with the second lowest bid.
Apart from BHEL, CAG has found deficiencies and irregularities in management of 15 per cent of PSUs under audit jurisdictions, which had financial implications amounting to Rs 1,846 crore. Irregular payments to employees on account of ex-gratia and incentives amounted to Rs 916 crore, which contributed the highest of around 49 per cent of the total financial irregularities.
Other sectors in which PSU accounts showed major irregularities were petroleum and natural gas, coal, civil aviation, defence and power.
