The Nuclear Power Corporation of India Ltd (NPCIL) favoured Larsen & Toubro Ltd (L&T) by offering it a contract without competitive bidding, said the Comptroller and Auditor General of India (CAG).
The public sector company placed purchase order for end shields for Rajasthan Atomic Power Project on nomination basis instead through competitive bidding in violation of guidelines laid down by Central Vigilance Commission (CVC), observed CAG.
The Government auditor pointed out that NPCIL awarded a contract for Rs 59.80 crore to L&T without inviting competitive bids. This forfeited the benefit of refund of terminal excise duty resulting in a loss of Rs 5.93 crore.
As per Foreign Trade Policy (FTP), supplies made to NPCIL would be eligible for benefits of deemed export. For utilising the benefit of refund of excise duty, it was necessary that the company invite competitive bids.
NPCIL informed CAG that L&T was better placed to meet the demanding delivery schedule of June 2013. Moreover, any firm other than L&T would have to add or incur additional cost of Rs 2 crore for transportation and other expenses.
However, CAG has quashed the atomic power company’s explanation saying, “It is not clear how NPCIL without exactly having gone in for competitive bidding concluded that awarding contract to L&T on nomination basis would be more economical and technically acceptable than other firms, which had experience in the field.”
The audit also observed that though NPCIL selected L&T on nomination basis on the plea that other firms would not be able to meet demanding delivery schedule of June 2013. “..the delivery date was subsequently extended to April 2014 in favour of L&T,” said the Government auditor.