core sector communique

Civil Aviation Minister Ch. Ajit Singh takes tough Stand; Orders Immediate Suspension of Six Senior AAI Officers Following Irregularities in Awarding Airports Ground Handling Contracts

Union Minister of Civil Aviation, Ch. Ajit Singh has ordered immediate suspension and initiation of major penalty proceedings against six senior officers of Airports Authority of India (AAI). A CBI inquiry has found these officers involved in committing irregularities and favouring a particular company namely M/s Bhadra International India Ltd in award of contracts for ground handling services at certain airports. The officers are Shri L.L. Krishnan, Executive Director (Commercial), Shri R. L. Saran, DGM (Finance), Shri S. Basu, Additional GM (Commercial), Shri Arun Mehan, DGM (Operations), Shri P. K. Chadha, DGM (Operations) and Shri Ravi Verma, GM.   The Minister has also ordered filing of the First Information Report (FIR) against Shri Prem Bajaj, MD of the suspect company, Shri R. V. Narayanan, Retired ED (Commercial), Shri A. K. Dubey, Retired ED (Finance), AAI and others for their acts of manipulation, forgery, criminal breach of trust, criminal conspiracy and corruption under Indian Penal Code (IPC) and Prevention of Corruption Act.  It has also been decided that action may be initiated against M/s Bhadra International India Ltd. for cancellation of the award/contract and recovery of dues.  Shri Singh has directed the AAI to take corrective measures to prevent participation of defaulter contractor/parties (even if the default is by their sister/ related concerns) in future tender processes by incorporating suitable provisions in the rules and regulations.              Following complaints of irregularities in award of contract for ground handling services by the AAI, the CBI had conducted a preliminary enquiry. The enquiry into award of contract for ground handling services at Chennai and Kolkata Airports found that the officers of the AAI made certain deviations from the Commercial Manual in the Notice Inviting Tender (NIT). The deviation in particular included deliberate incorporation of the term “tie-up” arrangement in the Eligibility Criteria as stipulated in the NIT to make M/s Bhadra International India Ltd. eligible in joint venture technical agreement with M/s Novia International Consulting APS for participating in the Bid process.  The justification by the officers that the deviation in the NIT had been made as improvements  keeping in view similar tenders floated by DIAL and MIAL were found misleading in the inquiry as the NIT of DIAL and MIAL have not used terms as “tie-up” arrangement. As per the legal opinion, the term “tie-up” arrangement has no legal status/sanctity. The experience and turnover of the lead company was to be taken into account. In this case, the lead company is M/s Bhadra International India Limited which is doing ground handling work while the turnover and experience of M/s Novia International Consultancy were counted.  The enquiry further found that the financial bid of consortium of M/s Bhadra International India Ltd. and  M/s Novia International was tampered after opening of the tender by modifying the rate of royalty payable to AAI by  the consortium so that it becomes greater than the quotes of other two competing companies and  the consortium could win the contract.  The figure of “NINE AND HALF” was manipulated to make it “NINE AND HALF” interpreting it Nineteen & half while evaluating the tender.               TEEN                                              Further, either of M/s Bhadra International India Ltd or M/s Novia International Consulting APS as lead member did not have minimum experience of five years in ground handling as required in tender conditions.  The experience of Novia Group of Companies was taken into account by the officials in violation of tender conditions.  As there was no minimum annual turnover of Rs. 200 crore for M/s Novia International Consulting APS, the annual financial turnover of entire Novia Group of Companies was taken into account by the officials of AAI.              The CBI also found grave and serious irregularities in award of contract of ground handling services for Trivandrum, Coimbatore, Calicut, Mangalore and Tiruchi.  In this case also in order to favour M/s Bhadra International, the term “tie-up” arrangement was incorporated in the NIT.  Here also during evaluation the turnover of entire group of Novia was taken into account instead of tender condition that Ms. Novia International Consulting APS alone should have had the required annual financial turnover.             The enquiry also revealed that the M/s TDI International also owned by Shri Prem Bajaj, sister company of Ms Bhadra International was having a huge outstanding of Rs.36 crores to AAI in an advertisement contract. Further, Shri R. V. Narayanan, Retired ED (Commercial) who was liable for drafting NIT joined M/s. Bhadra International India Ltd. as its Vice President after his retirement. Taking serious exception of this Ch. Ajit Singh has also directed AAI to suitably amend its service rules by incorporating provisions for seeking the permission by the retired employees to seek employment within a period of two years after retirement. On some independent complaints, the Chief Vigilance Commissioner (CVC) is also conducting investigations in these cases through the Chief Vigilance Officer of Airports Authority of India and CVC has asked to initiate disciplinary action against some officers.  The Minister has asked the compliance report on his directions positively by the end of this month.