August - November, 2009

vxLr & uoEcj] 2009

MECON’s New Director (Commercial)

Shri Anup Kumar Ghosh has taken over as MECON’s New Director (Commercial) from 1st
September, 2009. Shri Anup Kumar Ghosh was born on 29th February 1952. He completed
B.Tech. in Mechanical Engineering with distinction from NIT, Nagpur and did his Post Graduate
Diploma in Business Management from AIMA, New Delhi. He did specialized training in
erstwhile USSR and INCOS course from IIT Kharagpur.

He was one of the first batch of MECON’s Graduate Trainee in the year 1974. He has been
shouldering the responsibilities of Ports, Material Handling and Infrastructure group as General
Shri Anup Kumar Ghosh
Manager of MECON since 2006. He has over 35 years of experience in design & engineering Director (Commercial)

and worked in various capacities and has been instrumental in steering MECON in completing large scale consultancy
engineering assignments. He has been responsible for completing large turnkey projects in the area of Ports, Harbour,
Bulk Material Handling and Infrastructure. He has vast experience in project execution and led from the front in the
turnkey execution of 5A & 6A berths at Mormugao Port for M/s. South West Port Limited and also for the development
of the complete Material Handling System for handling 5.0 Mt/yr coal within time.

He has to his credit turnkey execution of ADB funded 16.0 Mt/yr Coal Handling Plant at Ennore for Tamil Nadu Electricity
Board before schedule. He is presently leading a team for executing Lignite Handling System for 2 x 250 MW Thermal
Power Plant for Neyveli Lignite Corporation, Neyveli on turnkey basis and providing design and engineering services
for 6.0 Mt/yr Integrated Steel Plant of Bhushan at Meramandali, 6 Mt/yr Integrated Steel Plant of JSPL, Angul, JSPL
Patratu, JSL Duburi, Neelachal Ispat etc.

He was instrumental in MECON’s restructuring, revitalizing and largely contributed for establishment
of Design & Engineering of Ports & Harbour and Material Handling Division. He was associated with
prestigious projects and design & engineering activities like Bhilai 4.0 Mt expansion, NMDC Bailadila - 5,
JSW at Tornagallu, Bhushan Steel Ltd. & Bhushan Steel & Power Ltd., JSPL, Raigarh, Bokaro 4.0 Mt expansion. RSP
turnkey supply projects like BF highline upgradation, Sinter Base Mix Prep Plants, Sinter Fines disposal system,
Mangalore Pellet Plant, KIOCL.

He has completed major assignments in development of Ports and Material Handling facilities in major ports like
Mormugao, Ennore, Krishnapatnam, Hazira, Gopalpur, Dolvi, Abu Dhabi, Trinidad & Tobago, Qatar, Indonesia, Haldia,
Kolkata, Paradip, New Mangalore and Visakhapatnam.

He was instrumental in developing several software for in-house use and has hands on experience with softwares like
PROBELT, Auto CAD, MS Project, Primavera, etc.

He has also presented a number of technical papers in several high level conferences like 'International Conference on
advances in Bulk Material Handling in Ports, Power, Steel & Mines', '24th National Convention of Institution of Engineers
[I] (Mechanical)', 'International Convention of Metallurgical Process Technology' by Indian Institute of Metals, 'National
Convention of Bulk Silo Technology' by NMDC, Hyderabad.

He has organized two prestigious International Conference on "Bulk Material Handling" and has been selected on the
prestigious Conference Board of "Bulk Solids INDIA 2010". An International Conference & Exhibition on Storing, Handling
A House of & Processing Bulk Solids and Powder organized by NURNBERG - MESSE, BULK SOLIDS HANDLING, GERMANY.
Engineering Excellence
 2

MECON NEWS
MECON Procures Order for Project Management Consultancy (PMC) Services for
GAIL’s Cross Country Pipeline Project
MECON has procured an order of Rs 21 Crores from M/s GAIL (India) Limited, New Delhi through open international
competitive bidding on 18th September 2009 for Providing Project Management Consultancy Services for Kochi-Kanjirkkod-
Banglore-Manglore-natural gas cross country pipeline project.
The project will be done in two phases:
Phase I: 24” X 27 Km, 12” X 28 Km, 8” X 41 Km
Phase II: 24” x 835 Km, 12” x 38 Km, 8” X 214 Km
Time Schedule for this project is 36 months (24 months for Phase I and 36
months for Phase II from the date of Fax of Acceptance)
The proposed pipeline project consists of pipeline from Kochi to
Mangalore via Kanjirkkod and Bangalore shall be of 24” line size and
the length shall be 862 km. There will be spur lines of varying sizes of
8” & 12” having total length of 252 Km. Design capacity of the pipeline
is 16 MMSCMD and pipeline design pressure is 92 Kg/cm2.
MECON’S SCOPE OF WORK : Route Map of Kochi-Mangalore-Bangalore Pipeline

The Project Management Consultant (PMC) is appointed for executing the project right from Design to Commissioning &
project close out on total and single point responsibility basis. The scope of work of the PMC broadly covers the following:
• Review of existing DFR inputs including technical & commercial aspects like technology, line sizing, pipeline
configuration, costs etc. Generally X-70 grade line pipes are used in GAIL projects. However, looking into the
technological advancements in line pipes, consultant may be required to use higher grade line pipe like X-80 grade
• Design & Detail Engineering
• Basic Engineering & Hydraulic study
• Planning & Scheduling
• Tendering/ Retendering & Ordering including purchase of all equipment and materials, Customs Clearance and
Transportation of materials/ equipments to site etc. The consultant has to follow GAIL’s C&P Procedure for all
purchases. It may be noted that GAIL has recently adopted e-procurement practices and the same practice is required
to be followed by the PMC for this project
• Inspection/ Expediting of equipment/Materials being manufactured by vendors including contractors supplied items
• Certification and forwarding the contractor’s bills to GAIL within the stipulated time
• Management of Construction Stores, Stores Accounting in GAIL’s ERP system based on SAP and assistance for
capitalization of the project in SAP
• Construction Management & Supervision
• Project Commissioning
• Project Cost Control, Management & Monitoring
• Risk Management of the project along with the detailed risk analysis (Qualitative as well as Quantitative)
• The Risk Management Plan (RMP) & Disaster Management Plan (DMP) is also to be prepared by the consultant
• Health & Safety Management
• Project closeout

MECON Bags Order for Consultancy Services for Waste Heat Recovery System (WHRS)
of Rashtriya Ispat Nigam Ltd., Vizag
MECON has procured order for consultancy services for Sinter Cooler hot gas based Thermal Power Plant for Rashtriya
Ispat Nigam Ltd., Vizag on July 2009.
This unit will generate 20.6 MW electric power by utilizing hot gas emanating from the Sinter Cooler, which otherwise
would be exhausted into the atmosphere. This Model Project will generate electric power, encurtail emission of a green
house gases thereby ensuring benefit of carbon credit through CDM.
This will be the first installation in India of its kind.
 3
MECON Entrusted with Detailed Project Report (DPR) for Gogi Uranium Mining Project
During last five decades, with the increasing demand of energy for the accelerated
agricultural and industrial growth, the nuclear power programme in our country has
gained considerable momentum. Uranium Corporation of India Limited (UCIL) is the only
organization in India, which supplies the nuclear fuel to
the country’s reactors. Augmentation of the production
capability to achieve the proposed enhancement in the
Headgear frame of vertical shaft at Gogi nuclear power generation capacities of the country has
invigorated development of new uranium mining and processing plants.
Encouraged with significant discoveries of uranium deposits at Gogi, Gulburga district of Karnataka,
UCIL has proposed to commence underground mining & matching process plant. Shaft sinking operation in progress at Gogi

UCIL has again entrusted MECON with preparation of Detailed Project Report, Mine Plan Report, EIA/EMP Report. Considering
the complexities of the uranium deposit, Gogi uranium mine is going to be one of the most complex underground mines designed
by MECON. Detailed engineering services shall also be rendered by MECON during the execution of the report. MECON is also
assisting UCIL for getting the project clearances from different Government statutory bodies, like Atomic Mineral Directorate
(AMD), Directorate General of Mines Safety (DGMS), Ministry of Environment & Forest (MoE&F) etc.

MECON Pioneered in 'India Electricity Fair', 2009

MECON participated in the India Electricity
Fair, 2009 organized by Federation of Indian
Chambers of Commerce and Industries (FICCI).
This mega event was held from 10th - 12th
September 2009, at Pragati Maidan, New Delhi.
Hon’ble Union Minister of State for Power, Shri
Bharatsinh Solanki inaugurated the fair.
A team of top brass MECONians, namely Shri
J. Mathew, ED (Power),Shri Rupak Biswas,
GM, MECON, Kolkata, Shri S.K Chaterjee, DGM
(Electrical PT & D) and Shri M.M Bakshi, DGM
Shri Bharatsinh Solanki, Hon'ble Union Minister for Power, with other dignitaries are being recieved at MECON Stall
(PP & EE), represented MECON as honorary
by Shri J. Mathew , Executive Director (Power), MECON Delegate in this prestigious event in power sector.
Many dignitaries visited MECON stall. Hon’ble Union Minister of State for Power, Shri Bharatsinh Solanki, Dr.Amit Mitra,Secretary
General,FICCI, Shri Y.K Modi, Chairman & CEO, GEEC Ltd and Former President, FICCI are to name a few. All of them appreciated
MECON’s endeavour in providing engineering assistance to the growing Power sector of the nation. The stall attracted large number of
visitors across the globe and number of queries related to power project development were entertained during the event. Shri R. Verma,
Administrative Officer, Ms. K.Sharma, Senior Administrative Officer and Ms S. Pradhan, Trainee Officer coordinated the MECON stall
during this fair.
MECON Successfully Completed Unit 9 of 2 x 120 MW Captive Power Plant of NALCO, Angul
MECON was awarded Detailed Engineering & Consultancy services of 2 x 120 MW Captive
Power Plant (Unit 9 & 10) by NALCO for their Aluminium plant at Angul. Unit 9 has been
commissioned successfully on 20.8.2009.
The work was executed based on different packages concept. The scope of work included
preparation of Technical specifications, selection of vendors, Engineering & Consultancy, day-
to-day site supervision, inspection & expediting, stores management, testing & commissioning
Unit 9 of 2 x 120 MW Captive Power Plant of
and performance guarantee. NALCO, Angul
 4
Metex India 2009 - MECON Leaves an Imprint
MECON took part in the mega trade show - Metex India 2009
held at Trade Centre KPTO, Bangalore from 16th - 18th September
2009, MECON put up one stall displaying the areas of activities
in its four SBU’s (Strategic Business Units). The event was
inaugurated by Hon’ble Union Minister of Mines, Govt. of India,
Shri B. K. Handique. Shri Handique appreciated the recent Eco-
friendly exploration being conducted by different organisations.
Shri Siddharth Rungta, President, Federation of Indian Minaeral
Industries, Shri Sanak Mishra, President, IIM was also present in
the Convention.
Shri B. K. Handique, Hon’ble Minister of Mine, Govt. of India along
with other dignitaries visited the MECON stall and exchanged
Shri B.K. Handique, Hon'ble Minister of Mine, Govt. of India is being received at
his views with Shri N. Balakrishnan, General Manager, Bagalore. MECON Stall by Shri N. Balakrishnan, GM (Projects) MECON, Bangalore

MECON Dazzled in Delhi High Level

Conference on "Climate Change Technology Development and Transfer"
MECON participated in Delhi High Level Conference on 'Climate Change Technology Development and Transfer' at Vigyan
Bhawan, New Delhi on October 21st to 23rd, 2009. MECON had setup a beautiful stall in the exhibition held at Vigyan
Bhawan, New Delhi. This International Exhibition was inaugurated on 21st October, 2009 by Shri Pranab Mukherjee, Hon’ble
Finance Minister, Govt. of India alongwith Shri Jayram Ramesh, Minister of State for Environment & Forest, Govt. of India
alongwith with vast number of International and Indian personalities.
A team headed by Shri M.K. Deshmukh, Director (Engineering) alongwith Shri S.K. Singhal, General Manager, Dr. Veejinathan,
Shri Ashutosh Bhatt and Shri Rana. S. Chakravarty participated in this exhibition cum high level conference.
MECON’s stall was highly appreciated by all the visitors. MECON stall depicted the strength of its Environmental Engineering
Division. MECON’s endeavor towards CLEAN AND GREEN ENGINEERING was highly appreciated. The recent prestigious
project wherein MECON is the consultant for carrying out the model project for waste heat recovery system from sinter cooler
(sintering plant) at Rastriya Ispat Nigam Ltd. Visakhapatnam alongwith NEDO and Steel Plantech Company, Japan, is one
first project in India aiming towards the concept of clean and green engineering. MECON also depicted the Environmental
Laboratory setup which is recognized by Central Pollution Control Board and MoE&F New Delhi alongwith other state
pollution control board. MECON is facilitating various clients in the field of Clean Development Mechanism.
The conference on Climate Change Technology
Development was inaugurated on 22nd October,
2009 at Vigyan Bhawan by Hon’ble Dr. Manmohan
Singh, Prime Minister of India, wherein he stressed
upon India’s commitment towards reduction of
Green House Gases. The guest of honour was H E
Mr. Mohamed Nasheed, President of the Maldives,
Shri Jairam Ramesh, Minister of State, Environment
and Forest, Govt. of India, Mr. Sha Zukang, Under
Secretary General, United Nations, Department of
Economic & Social Affairs (UNDESA), Shri Vijai
Sharma, IAS, Secretary MOE & F, Govt. of India and
host of International and Indian personalities in the
field of Climate Change and Environment.
MECON Stall at the "Climate Change Technology Development and Transfer" Conference
 5

The 62nd Anniversary of Independence was celebrated with lot of pomp and show
at MECON Football Ground, Shyamali, on 15th August, 2009. All MECONians,
SAIL employees, members of Commercial Audit and their family members
assembled for the flag hoisting ceremony. Shri Drona Rath, CMD, MECON,
the Chief Guest of the function unfurled the National Tricolour with the
National Anthem sung by the students of JVM Shyamali. Shri A.S.
Mathur, Executive Director, CET, SAIL, was the guest of honour
of the function and read the Independence day message and
congratulated all MECONIANS and SAIL Employees.
Shri M.K. Deshmukh, Director (Engineering), MECON gave the
Shri Drona Rath, CMD, MECON
Independence Day message in Hindi. Shri A. Bhattacharya, then Director
(Commercial), Shri B. Sankararaman, Director (Projects), Shri L.R. Singh, Director (Technology) of MECON, Shri
N.K. Jha, Executive Director I/c SAIL (RDCIS), Shri S.Y.K. Minz, CVO and General Managers of MECON and a large
number of employees were present on this occasion.
On this auspicious occasion a friendly football match was played between MECON football team and Veteran players of
MECON in the MECON Stadium. A cultural programme was also organized in the evening at Community Hall, Shyamali.
Glimpses of Celebration

Shri L.R. Singh, Director (Technology) is being welcomed by a Shri B. Sankararaman, Director (Projects) is being welcomed by a
student of JVM, Shyamali student of JVM, Shyamali

Shri M.K. Deshmukh, then Director (Engineering) reading out the Shri A.S. Mathur, ED I/c RDCIS, SAIL, reading out the
Independence day message in Hindi Independence day message

Mrs. R. Rath distributing sweets to a boy at Ispat Hospital, Mrs. Deshmukh handing over a bax of sweets to a patient at Ispat
Shyamali Hospital, Shyamali
 6

MECON observed ‘Sadbhavna Diwas’

On 20th August 2009, the birth anniversary of Late Prime Minister of India, Rajeev Gandhi, MECON Limited observed
‘Sadbhavna Diwas’.MECON office was ornated with colorful banners with message of national Integrity.
MECONians gathered at the reception hall to take the ‘Sadbhavna Diwas’ pledge. Shri A.Bhattacharya, the then Director
(Commercial) elaborated about the importance of ‘Sadbhavna Diwas’ in today’s world. Sri B.Sankararaman, Director
(Projects) and Shri L.R Singh, Director (Technology) read out the ‘Sadbhavna Diwas’ pledge in English and Hindi respectively.
All MECONians took the oath of irradicting violence and promoting goodwill among the people and creating a healthy
environment in the work place.
MECON also celebrated Communal harmony Fortnight from 20th August to 3rd September,2009.

From Left to Right : Shri L.R. Singh, Director (Technology), Shri B. Sankararaman, Director MECONIANs taking the Sadhavna Pledge
(Projects) and Shri A. Bhattacharya, then Director (Commercial) conducting the pledge ceremony

MECON Employees Union Election 2009–11

Congratulation!
MECON Employees Union election for the term 2009 – 2011 was held on 7th
Major Ratnesh Kumar
August ,2009 at MECON Head Office, Ranchi. 223 non-executive employees
Singh, son of Shri S.
franchised their rights to
V. Singh, DGM, Elect
choose their representatives.
(PT&D) has been
The Returning Officer
awarded the prestigious
Shri M.K. Roy and Asst.
Major Ratnesh Kumar “SHAURYA CHAKRA”
Returning Officer Shri S.S.
on Independence Day 2009 for act of
Prasad conducted the MEU
exceptional bravery and gallantry while
election smoothly. Shri
fighting with terrorists in J&K. He was
Mahadeo Oraon and Shri
a pioneer student of Jawahar Vidya
Debasis Banerjee were
Mandir prior to joining the National
The newly elected Members of MECON Employes Union (MEU) declared President and Vice
Defence Academy in 1998. He was later
President respectively.For the other posts Shri Kadir Quarashi was elected as
commissioned in the RAJPUT REGIMENT
the General Secretary. Shri Bimal Karkusha, Shri M.S. Pathak & N. Horo were
of the Indian army in June 2002. The award
selected for the three posts of Secretary.
will be conferred to him personally by Smt.
Shri Santosh Kachhap was elected as the Treasurer and Shri R. Kerketta were Pratibha Devi Singh Patil, Honourable
elected as Jt. Treasurer. President of India in a ceremony to be held
Shri Birsa Kachhap, Shri Durga Lal Hela, Shri Lagan Ram, Shri B.Kujur, Shri at the Ashoka Hall, Rashtrapati Bhawan.
Suraj Kumar Balmiki, Shri Shiv Shankar Kewat, Shri Rang Dhari Singh, Shri He has also been awarded the “Chief of
Ravindra Gond, Shri Md. Moinuddin, Shri Ram Sewak Ram, Shri Rajendra the Army Staff” Commendation Card for
Kumar and Shri Nand Lal Ram were declared as the Executive members of the gallantry on two earlier occasions.
Union. Our heartiest congratulations to all the elected members.
 7

MECON'S MAGNANIMITY, A PANACEA FOR SOCIETY

Former President Visits Cheshire Home

Dr. Kalam with the inmates of Cheshire Home Dr. Kalam in an interactive session with the inmates.
Former President Hon'ble Dr. APJ Abdul Kalam paid visit to
Cheshire Home that brought cheers to the physically challenged
children residing there. Former President distributed sweets /
chocolates to the residents of Cheshire Home and met them
individually.
Former President also inaugurated the Kitchen Block and
Cow Shed constructed by MECON. MECON has been
providing constant support to Cheshire Home in their
endevor of helping physically challenged children in and
around Ranchi.
Dr. Kalam handing over a Calipers to a physically challenged boy,
Shri H.L. Choudhury, Chairman CDC & GM Civil assisting Dr. Kalam

Blood Donation Camp Medical Camp

For MECON, social responsibility has always been of
paramount importance. As an act of benevolence towards
society, Ispat Club of MECON Shyamali has organised a
blood donation camp for its members and employees of
MECON, RDCIS & CET-SAIL with the help of Ispat Hospital,
Shyamali & Jharkhand State Aids Control Society at Ispat
Club premises on 12th of July, 2009.
A large number of volunteers came forward and donated
blood for a noble cause denouncing once again that they
are mere mercinaries.
The blood donated at this camp will go to the needy and
poor being treated at Govt. Hospitals in Ranchi district.
Under the “Community Medicine Program”, MECON’s
Community Development Committee (CDC) along with Ispat
Hospital, Shyamali, organized a day long “Medical Camp”
and “HIV/AIDS Awareness Program” on 30.07.2009 at “Holy
Faith Mercy Home (for Orphanage)”, Joda Bagicha, Khunti.
Dr. Gajendra Kumar, Dr. S. K. Mishra & Dr. J. K. Rath of
Ispat Hospital examined the patients in the medical camp.
About 150 people including children of “Mercy Home for
Orphanage” and adjoining areas were examined and given
medicines for various diseases. They were also explained
about importance of hygine and sanitation.

Volunteers donating blood at Ispat Club "HIV/AIDS Awarness Programme" at Joda Bagicha, Khunti
 8
CVC’s Guidelines on Tender
PRE-TENDER STAGE
Pre-Tender Stage can be sub-divided into two stages
• Appointment of Consultant
• Preparation of Detailed Project Report (DPR)/Detailed
Estimate
Appointment of Consultants:
The consultant should be appointed in a transparent and
competitive manner for need based and specialized jobs containing
adequate provisions for penalizing the defaulting consultant.
Consultant’s fee should be based on some fixed value of the
contract.
Some deficiencies in the appointment of consultants as well
as in operating the consultancy contracts has come to notice
such as –
• Arbitrary appointment without publicity & competition
• Restrictive criteria adopted in pre-qualification
• Pre-qualification carried out not as per notified criteria
• Credentials not verified
• Offer of L1 ignored on flimsy grounds
• Decision making left to the consultant
Case-1 : One consultancy firm was appointed as consultant for
a housing work costing Rs. 60 crores without inviting tenders.
Organisation should have invited open tenders from capable
consultants.
Case-2 : Limited tenders were invited from known consultants
for a Hydro Power Project costing Rs. 130 crores instead of open
tendering.
Case-3 : Initial payment of Rs. 3 crores was paid to the consultant
for mobilizing resources for consultancy. The consultant neither
deployed the required man-power as per agreement nor supplied
the design and drawing in time defeating the very purpose of
granting mobilization advance.
Department should have insisted on timely services from the
consultant and deployment of sufficient staff.
Case-4 : Estimate was prepared by an outside consultant, which
was to be checked by the department. Even the basic rates of
various items such as cement and steel had been taken on a higher
side. Other coefficients for labour and machinery were also taken
on the higher side. Thus effective control was not exercised on
the consultant’s job resulting in inflated estimates.
Case-5 : A Power Sector PSU appointed 4 Consultants on
nomination basis. One Consultant was appointed for the
preparation of the feasibility report for the different sites. Another
Consultant for verifying the estimated cost. A Central PSU was
appointed for the consultancy services up to the commercial
operation date with a provision to escalate rate on account of wage
revision. Awarded another work of consultancy for the supply and
installation of infrastructure project management software and
hardware to another Central PSU. Consultancy charges were 46%
higher than estimated cost of supply of hardware and software
which was not justified by any standard practice.
At best two consultants for the complete job should have been
appointed duly adopting a proper tender system.
Preparation of DPR/Estimate:
Successful contract performance depends on the quality of Detailed
Project Report. The detailed project report is prepared on adhoc
basis based on some old project and not as per the present site
requirements, then there shall be delays, deviations, resulting in
time and cost overrun. The detailed project report is prepared in
a hurried manner without checking the conformity/consistency
among various schedule of items, drawings, specifications, and
contract conditions etc. leading to time and cost overrun leaving
opportunity for the contractor to exploit and gain profits out of
ambiguity in the contract.
Estimates should not solely rely on last accepted rates only.
Quoted rate needs to be reasonable and justified and compared
with the estimated rates. If the last accepted rates are high for
any reason, it results in award of the contract at higher rates since
no analysis of circumstances under which the last contract was
ordered is gone into. This new awarded rate becomes the basis
for estimation of rates for the next tender. Thus this problem has
a cascading effect.
Organisations do not prepare estimates based on actual site
conditions but based on the borrowed quantities from some
previous similar project, without modifications for the current
project resulting in large-scale deviation, especially in foundation
items.
Case-1 : In case of an ‘earth filling package’ of one thermal power
project, an estimate amounting to Rs. 73 crores was prepared
taking into account the local site conditions such as lead involved
in the transportation of earth, cost of the earth etc. L1 bidder
quoted Rs. 129 crores which was on the higher side in comparison
to the estimated rates. Tender Evaluation Committee decided to
look into the reasonableness of the estimated cost and concluded
that an amount of Rs. 100 crores could at best be justified. The
tenders were discharged.
Total revision of estimate was carried out and in place of initially
proposed borrow area involving 4-5 kms. lead, a fresh borrow
area involving 14 kms lead was stipulated and an estimated cost
of Rs. 103 crores was worked out. Lowest bid was for Rs. 192
crores. The option of assigning the work to some other PSUs
engaged in construction work was explored. Most of the PSUs
were excluded and finally the work was assigned to NBCC at a

cost of Rs. 118 crores. Since, the estimate of Rs. 103 crores was
worked out considering all the relevant factors and current rates,
assigning the work at a cost of Rs. 118 crores thereafter, does not
appear to be justified.
The work was being executed by way of borrowing earth from
the area involving a lead of 4-5 kms only, whereas the estimate
amounting to Rs. 103 crores was prepared involving a lead of 14
kms. There appears to be no justification for preparing an estimate
and justifying the cost of award of work considering a borrow area
involving a lead of 14 kms.
Case-2 : Detailed estimate for a power project ‘X’ was prepared
based on the rates borrowed from another previously executed
power project ‘Y’. In Project ‘X’ the electricity & water
supply was supplied to the contractor free of cost. In project
‘Y’ contractors were to arrange electricity & water supply.
Obviously, the estimated cost of project ‘X’ should have been
less than for the project ‘Y’.
Quantity of ‘extraction of rock’ in the coal handling area deviated
from 5000 cum to 56000 cum, which indicates that estimate was
not prepared on the basis of actual site conditions.
Organisation should have prepared realistic estimates considering
the local conditions.
Case-3 : In another case of thermal power package, estimates
were taken from the award value of an exactly similar package of
another work which was awarded at Rs. 1,860.33 crores in April,
2004. Estimates for the new package prepared in November, 2004
were, however, taken as Rs. 2,250.38 crores, 20% higher than
the last award rates within a time span of 5 months without any
justifiable reasons on record.
Case-4 : One PSU awarded the work on nomination basis to
another Central PSU without arriving at a realistic estimated
cost. As the initial cost was not properly worked out before
award, an amount of Rs. 30.50 crores was allowed in addition to
the initial cost without any justification. After issuing the LOA,
an amendment letter to this effect was issued later on. Even the
sanction of the cost estimate was issued after approximately 15
months of issue of LOA. The work awarded on nomination basis
to the PSUs are getting executed through private agencies by a
back to back arrangement. Keeping the estimates loose in the
beginning results in award of work at higher rates to private parties
in a non-transparent manner.
The estimated rate is a vital element in establishing the
reasonableness of the prices being offered. It is very important
that the same is worked out in a realistic and objective manner
on the basis of purchases made by other organizations, prevailing
market rates, the market trend and assessment based on intrinsic
value etc.
Few check points for preparation of Detailed Project Report:
• Prepare DPR as per actual site requirement in consultation
with the field staff; otherwise it may lead to deviations &
delays.
9
• Prepare Estimates on the basis of detailed analysis of rates
considering rates prevailing at the project site to arrive at
realistic cost.
• Ensure conformity among nomenclature of the item,
drawings and specifications to avoid ambiguities at a later
stage.
TENDER STAGE
Tender Stage can be sub-divided under four headings
• Preparation of tender documents
• Inviting and opening of tenders
• Pre-qualification
• Evaluation of bids and award of work
Preparation of Tender Documents:
An ambiguous agreement leads to poor contract performance
and gives an opportunity to a contractor to make profit out of
ambiguous conditions. Often they are prepared in a hurried
manner without checking the conformity among the schedule of
items, drawings, specifications, and contract conditions etc. due
to the reason that different parts of the tender document such
as schedule of quantities, specifications, drawings, and general
conditions prepared by different people are compiled without
correlating them. Sometimes they are copied from old tenders
without giving a thought to the applicability of the conditions to
the present work.
Inviting & Opening of Tenders:
Award of Public Contract through open tender is to ensure –
transparency in public procurement, to maximize economy and
efficiency in public procurement, to promote healthy competition
among tenderers, to provide for fair and equal treatment to all the
tenderers and to eliminate irregularities, interference and corrupt
practices by authorities concerned. This is also required by the
Article 14 of the Constitution of India.
In an open tender, bids are invited giving wide and adequate
publicity.
In the case of small value works, urgent works and in case
only a few bidders are available in the market, limited tenders
from such bidders who have been empanelled are invited.
Empanelment should be done in a transparent way and updated
periodically.
Award of contracts on nomination basis is to be resorted to only
under exceptional circumstances such as natural calamities and
emergencies or there were no bids to repeated tenders or where
only one supplier has been licensed (proprietary item) in respect
of goods sought to be procured.
In Nagar Nigam, Meerut Vs Al Faheem Meat Exports Pvt. Ltd. case,
Hon’ble Supreme Court emphasized that all the public tenders
should be in an open and transparent manner with adequate
publicity.
 10
Publicity : Widest possible publicity through well-circulated
national and local newspapers is essential for greater transparency
in open tenders in addition to uploading NIT on the website.
Website publicity is to be given even in the case of limited
tenders.
Receipt of tenders : Suitable arrangements for receipt of sealed
tenders at the scheduled date and time through conspicuously
located tender boxes needs to be ensured. In case of bulky tender
documents the provision for submission of bids to designated
officials by hand should be made in the tender document itself.
Opening of tenders : CVC in its circular dated 08.06.2004 has
instructed to open the bids in the presence of bidders.
Case-1 : One power sector PSU ‘N’, awarded the work of
main plant and off site civil work of a power projct to another
construction PSU ‘H’. The PSU ‘H’ had an adhoc panel of four firms
for piling work. The PSU ‘H’ invited bids from three firms and the
4th firm was left out. Two out of these three were not interested,
so only one firm was left in the fray. Since there was no broad
based panel of contractors that was prepared in a transparent way,
there was lack of competition. The PSU ‘H’ got very low margin
percentage. Even when, one other interested party contacted this
PSU ‘H’, it even did not bother to consider their offer.
In the same work, the PSU ‘H’ made out a panel for pre-tender tie
up by taking the six firms who had approached them and adding
three more working contractors. The panel was prepared in a
totally arbitrary manner.
Case-2 : The work of cooling tower (costing Rs. 62 crores) for
a power project was awarded on nomination basis to a private
firm even though there are a number of agencies in the market
executing similar work. The concerned PSU should have invited
competitive tenders.
Case-3 : In another case, Commission’s guidelines violated.
If L1 bidder backs out due to any reason, there should be a re-
tender in a fair and transparent manner.
Case-4 : In one case, the Tender Receipt Register was not found
maintained. In case of bulky size of the tender documents,
information to be displayed at the entrance/reception to ensure
a convenient approach for the bidders for submission of the
tender.
Case-5 : In another case, the corrected quoted amount was Rs.
40.79 crores, which was just Rs. 5 lakh less than the L2 quote of
Rs. 40.84 crores. In the price bid, a discount of 11% on total price
is seen to have been mentioned below the stamp and signature
of the tender opening committee. Incidentally, this insertion also
was not attested by the tender opening committee leaving a doubt
as to when the discount amount was added i.e. whether after the
opening of the price bid ? Such manipulations were possible in
this case as the column reflecting number of corrections was blank
and was prone to be misused by any interested party.
Case-6 : In another project of a Power Sector PSU, the covering
letter of the price bid of one of the bidders to whom the work was
finally awarded was having a list of all the documents enclosed in
the bid. However, in the same bid, a letter indicating a discount
was also enclosed but this letter was not having any mention on
the first page of the price bid which was containing the list of all
the enclosures. Incidentally, this bidder could become L1 only after
considering the discount as per this letter, which leaves enough
room for suspicion that the discount letter might have been added
at a later stage.
Case-7 : In a case of award of a project of Rs. 3400 crores by a
Power Sector PSU to another Central PSU on negotiation basis,
the justification was given that one Stage Government has also
given the work to the same Power Sector PSU on negotiation
basis. The PSU skipped the normal tendering procedure to award
the work to the Central PSU. This procedure is not correct due to
the following reasons:-
The procedures followed by the State Government may not be
taken as precedence to obviate procedures adopted in a Central
Govt. Organisation.
Considering the amount involved and the long gestation period
of the project it is not found prudent to skip the tender process
just to save some time.
As per the Govt.’s sanction, this project was to be executed in the
10th Plan period and, therefore, there was sufficient time available
for the organization to go in for a regular tender process.
Opening of tenders in the presence of trade representatives should
be scrupulously followed. While opening the tenders by the tender
opening officer / committee, each tender should be numbered
serially, initialed and dated on the first page. Each page of the
tender should also be initialed with date and particularly the
prices, important terms and conditions etc. should be encircled
and initialed by the tender opening officer / committee. Alterations
should be initialed legibly to make it perfectly clear that such
alteration, erasing or cutting was present on the tender at the time
of tender opening and this fact be also recorded by the tender
opening officer / committee.
Pre-qualification:
The pre-requisites of pre-qualification process –
• Transparency, Fairness, Competition should be ensured.
• Neither too stringent nor too lax.
Following deficiencies were observed –
• Stringent PQ Criteria resulting in poor competition
• Unduly restrictive criteria, creating entry barrier for
potential bidders.
• Evaluation criteria not notified to the bidders, making the
PQ process non-transparent.
• Credentials of the bidders not matched with the notified
criteria.
• Credentials of the bidders not verified.
The purpose of any selection procedure is to attract the participation
of reputed and capable firms with proven track record. It should

be ensured that the PQ criteria are exhaustive, yet specific and
there is fair and adequate competition. It should be ensured that
the PQ criteria are clearly stipulated in unambiguous terms in
the bid documents.
Tender Evaluation and Award of Work:
This is the most sensitive area susceptible to corruption. Corruption
is inversely proportional to transparency and fairness. To ensure
that evaluation is done in most transparent and fair & open manner,
following points should be taken care of :-
• Evaluation of tenders exactly as per the notified criteria.
• Timely decision within validity period.
• Complying with Commission’s circular regarding
negotiation.
• Ensuring that conditions / specifications are not relaxed in
favour of contractor to whom the work is being awarded.
• Ensuring that L1 is not ignored on flimsy grounds.
• Compliance with the purchase preference policy of the Govt.
• Ensuring that work order / supply order is placed within
justified rates.
CVC guidelines issued vide following circulars:
• Circular No. 8(1)(H)/98(1) dated 18.11.1998
• Circular No. 98/ORD/1 dated 24.8.2000 / 15.03.1999
• CVC’s Office Order No. 13/3/05 (005/VGL/4) dated
16.03.2005
• Circular No. 06-03-02-CTE-34 dated 20.10.2003
• Circular No. 004/DSP/11-6594 dated 24.02.2005
• Circular No. 005/CRD/012 dated 03.03.2007.
Shri Solomon Yash Kumar Minz, IPS, CVO, MECON Limited receiving Vigilance Excellence
Award, 2009 from Shri Pratyush Sinha, Central Vigilance Commissioner, Delhi in a function
organized by Vigilance Study Circle at Jubilee Hall, Hyderabad on 10/08/09
Check points suggested to prevent
above deficiencies:
Preparation of Tender Documents
• Adopt updated standard bidding document
• Ensure conformity among nomenclature of items,
specifications, drawings, general and special conditions.
• Avoid stipulating such conditions in the contract, which
are not feasible to be operated.
• Stipulate performance guarantee clause to eliminate non-
serious bidders.
11
• Conduct pre-bid meeting (i) to bring clarity regarding
spirit of various provisions & (ii) to bring necessary
modifications, if required. Make minutes of the pre-bid
meeting as part of agreement.
• Provide clause to deal with ambiguous provisions (order
of precedence) in the tender document and ambiguity in
the tender submitted by the contractor.
• Stipulate all prevailing Govt. policy orders such as
purchase preference policy (CVC’s Circular dated 15.03.99
& DPE’s Circular dated18.07.05), customs exemptions for
material to be imported etc.
• Provide enough safeguards against misuse of mobilization
advance (CVC’s Circular No. 4CC-1-CTE-2 dated 10.04.07).
• Notify objective evaluation criteria in the tender document.
• Stipulate condition regarding splitting of quantities, if
required, in the tender document.
• Notify criteria of splitting in the tender document itself if
splitting of work / supply order is envisaged (splitting is
envisaged when L1’s capacity is less than required or to
avoid heavy reliance on one firm).
Inviting Tenders
• Prefer open tendering as far as possible.
• In case limited tenders are resorted to, prepare & update
panel of contractors / vendors in a transparent way.
• Ensure adequate & wide publicity. (Web publicity is
necessary even in case of limited tenders).
• Ensure adequate time for submission of offers.
• Upload NIT & tender document on website, even in case
of limited tenders (CVC’s Circular dated 11.02.2004).
• Notify complete address of place of tender submission
(CVC’s Circular dated 08.06.2004).
Opening of Tenders
• Open the bids in presence of bidders.
• Attest and account for corrections, omissions, insertions,
overwriting.
• Prepare ‘on the spot summary’ in tender opening
register.
Pre-qualification
• Keep the PQ criteria neither too stringent nor too lax.
• Prepare the PQ criteria specific to the requirement of the
work in clear terms.
• Notify the evaluation criteria in the PQ document
• Verify PQ credentials.
• Evaluate the bids exactly as per the notified criteria.
• Retender if relaxation in PQ criteria is necessary.
(excerpts reproduced from CVC’s Study on Preventive Vigilance
in Public Procurement)
For important CVC Circulars, please browse ‘meconinfo’
Vigilance
 12
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Edited and Published by Shri Rana S. Chakravarty, Incharge Corporate Communication, MECON Limited
and Printed at Kailash Paper Conversion Pvt. Ltd., Bharatpuri, Purulia Road, Ranchi
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