The Nuclear Power Corporation of India Ltd., ( NPCIL ) got the rap from the Comptroller and Auditor General for not following transparency guidelines while awarding a contract for equipment of an atomic power project.
The CAG said NPCIL issued purchase order for ‘end shields’ for the Rajasthan Atomic Power Project 8 to L&T on nomination basis without inviting competitive bids 'though several firms/vendors were available in this field'.
The auditor pointed that by not inviting bid, the NPCIL violated CVC guidelines based on a Supreme Court judgement. It said award of contracts by a government agency on nomination basis would amount to breach of Article 14 of the Constitution guaranteeing the right to equality 'which implies right to equality to all interested parties'.
The apex court had made observations on transparency in works, contracts and consultancy contracts awarded on nomination basis.
The CAG, in its report on Union of India (Commercial), 2013 said that as per the foreign trade policy, supplies made to nuclear power projects would be eligible for benefits of deemed export in case the process of competitive bidding was followed.
It said by not following the competitive bidding process, NPCIL forfeited the benefit of refund of terminal excise duty resulting in a loss of Rs 5.93 crore.
The audit rejected the stand of NPCIL - backed by the Department of Atomic Energy - that L&T was selected as other firms would not have been able to meet the demanding delivery schedule of June as the delivery date was subsequently extended to April, 2014 in favour of the company.