Questions raised over SCCL explosives tender, sidelining of senior official
Serious allegations have surfaced over irregularities in Singareni Collieries Company Limited’s (SCCL) tender for procurement of Site Mixed Emulsion (SME) explosives. A whistle-blower claims that a Board director was sidelined and tender conditions were manipulated, leading to an estimated Rs 300–350 crore additional burden on the PSU.
Hyderabad: Almost on the same lines of the details revealed by former Minister T Harish Rao on irregularities in the Singareni Collieries Company Limited (SCCL), serious questions are being raised over the handling of a major tender for procurement of Site Mixed Emulsion (SME) explosives by the company, including alleged manipulation of tender conditions, sidelining of a Board director and an estimated additional financial burden of up to Rs 350 crore on the PSU.
According to a whistle-blower who preferred anonymity, a Board director overseeing the purchase department was appointed on February 1, 2023 for a two-year term, with eligibility for extension till retirement. In March 2024, SCCL floated a tender worth about Rs 2,400 crore for procurement of SME explosives, following procedures laid down in the SCCL Purchase Manual. As per established practice, technical conditions were aligned with Coal India Limited (CIL) tender guidelines.
Suppliers reportedly objected to certain penalty clauses in the tender. It is alleged that the then Chairman and Managing Director, with “ulterior motives”, provided “incorrect information” to the State government and instructed the above-mentioned official to go on leave, allegedly to get him out of the way while authorising the Acting Director (E&M) to proceed with the tender as per suppliers’ requirements.
Subsequently, the official was also asked not to attend duties from September 2024 until further orders. Meanwhile, the tender was cancelled and later re-floated with modified conditions. The revised tender was approved by the SCCL Board on November 4, 2024 and purchase orders were issued.
Existing explosive supply orders placed on May 4, 2022 were valid until May 4, 2024. Based on requirements from the target committee, the tendering process was initiated in November 2023, with oral intimation to the management during monthly review meetings.
Coal India Limited had floated a similar tender on August 5, 2023 for procurement of SME explosives for its subsidiaries, followed by corrigenda on August 19 and August 21, 2023. CIL issued purchase orders on October 7, 2023.
Based on CIL’s Notice Inviting Tender, SCCL floated its tender on the Telangana e-procurement portal on March 28, 2024, with a closing date of April 24, 2024.
Approval was accorded on July 25, 2024 to open price bids. However, ‘representations’ were received seeking cancellation of the tender.
During this period, IDL Explosives Ltd, Hyderabad, one of the participating firms, was banned by CIL for two years. After obtaining legal opinion from the Additional Advocate General, the tender was dropped on August 28, 2024 and a fresh short tender was floated on September 24, 2024.
Concerns have been raised over changes introduced in the new tender. While an additional clause was inserted to deal with bidders being banned during the tender process, another key clause relating to penalties in technical specifications was also modified.
Earlier, penalties ranged from one per cent to 10 per cent of the monthly supply value based on the number of failed samples. In the revised tender, the penalty was reduced to one per cent of the supply value of the item supplied during the preceding 90 days, according to official documents furnished by the whistle-blower.
Despite the reduction in penalties, the quoted prices of SME explosives in the new tender were reportedly 13 to 20 per cent higher per metric tonne than CIL running order prices. With a total quantity of about 4.6 lakh tonnes, the additional cost to SCCL was estimated at around Rs 248 crore.
Further, six additional items included in the tender were allegedly priced 24 to 80 per cent higher than CIL rates, adding an estimated Rs 50 crore. The total additional burden on SCCL was estimated at Rs 300–350 crore.
It is alleged that the official was asked to go on leave to facilitate the diversion of funds and that efforts were made to terminate him much before his tenure was due to end.
