Arappor Iyakkam, an anti-corruption NGO based in Chennai, has alleged corruption by the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) in the floating of tenders to buy electricity distribution transformers, when Dravida Munnetra Kazhagam (DMK) leader V Senthil Balaji was the Minister for Electricity and Prohibition. According to the NGO, tenders for buying 45,800 transformers were floated after the DMK came to power in 2021, causing a loss of Rs 397 crore to the government exchequer.
Arappor Iyakkam said it scrutinised 10 tenders worth Rs 1,182 crore floated between 2021 and 2023 and found that in all tenders, more than 20 bidders participated and won the tender by quoting the same amount to secure the contracts. The perusal of documents revealed that the amount quoted by the bidders is higher than the actual market price of the transformers. The NGO has lodged a complaint with the Directorate of Vigilance and Anti-Corruption (DVAC) seeking a thorough investigation into the alleged scam.
The NGO argued that it is mathematically impossible for more than 20 bidders from various companies to quote the same rate and alleged that the bidding process was pre-decided. “Unless it is prefixed, it is impossible for all of them to quote exactly the same rate,” Jayaram Venkatesan, convenor of Arappor Iyakkam, said at a press meet in Chennai.
"The complaint is about the criminality of corruption, collusion, conspiracy, and fraud in the award of tenders for the supply of distribution transformers of a range of specifications, starting from 25 KVA up to 500 KVA, during the years of 2021, 2022, and 2023," Jayaram said. He added that this alleged scam by the TANGEDCO led to the unjust enrichment of vested interests and a loss of Rs 397 crore to the exchequer.
Arappor Iyakkam also alleged that there is clear evidence of collusion and cartelisation among the bidders, further noting that this is against the preamble of the Tamil Nadu Transparency in Tenders Act.
Arappor Iyakkam document's showing all bidders quoted same amount
As per section 29A-1 of the TN Transparency in Tenders Rules, the Tender Accepting Authority may reject a tender if it has determined that the financial bid in combination with other constituent elements of the tender is abnormally low or high in relation to the subject matter of the procurement. However, in the last three years, this authority failed to reject the tender. “It negotiated with the bidders and awarded the tender by splitting the orders equally to the bidders who accepted the negotiated rate,” Arappor Iyakkam alleged.
The allegations of a major scam concerning the TANGEDCO comes at a time when Senthil Balaji is facing heat from the Enforcement Directorate on charges of money laundering, and has been placed under arrest. Jayaram also urged the intervention of the Chief Minister MK Stalin and the removal of Senthil Balaji from the Council of Ministers. He demanded stringent actions against V Kasi (Financial Controller), IAS officer Rajesh Lakhoni, and other public servants for their alleged involvement in the irregularities.