Pungrain inked pacts for silos a day before state poll results

NORMS FLOUTED Terminates 25 contracts on legal advice for non-fulfilment of conditions

CHANDIGARH : The Punjab Grains Corporation Limited (Pungrain), the nodal agency for setting up silos for storing wheat in Punjab, has issued termination notices for 25 sites of private players, who were awarded contracts by previous Parkash Singh Badal regime, for not meeting conditions.

The most glaring is the timing of signing of the pacts. The corporation inked concession agreements for creating capacity of 15.5 lakh metric tonnes (LMT) at 28 sites with successful bidders on February 23 last year, after assembly elections and March 10, a day before the results were declared and the Congress returned to power.

In its note to chief secretary Karan Avtar Singh, the corporation has pointed out blatant lapses in the tendering process. The bids were floated under design, build, operate and own (DBOO) as well as design, build, operate and transfer (DBOT) basis through newspaper advertisements issued between September to November 2016 for a concession period of 30 years.

The letter of agreement (LOA) for 28 silos – two under DBOT and 26 under DBOO – were issued on December 25 that year, weeks before the model code of conduct

kicked in on January 11. State’s accountant general in its 2017 report red-flagged the contacts allotted on DBOO basis as a “deviation from policy” and lack of transparency in tendering .

But the Amarinder government still pursued the matter with the Food Corporation of India, which has refused to stand guarantee for the silos saying it was not consulted before tendering, neither do the storage sites adhere to requisite storage gap requirements and are road-fed not rail-fed. Caught in a bind, the corporation MD issued intention to terminate notices to the concessionaires on May 11 this year. Their replies have revealed that 25 had not fulfilled all or some conditions. At seven sites, none of the conditions on land, performance security, permits were met.

Pungrain’s legal retainer Rameeza Hakeem advised termination of contracts. In August, 14 contracts of companies, including LT Agri Services, A2 Silos, GTM Warehousing, RGA Agro, were terminated along with that of Adani Logistics, which had sought permission for change in site but the request was found legally untenable. Later, contracts of 11 other sites were terminated for not fulfilling conditions.

Principal secretary (food) KAP Sinha says Punjab procures and stores wheat for FCI, so the money for rentals has to flow from the central agency. “But FCI refused to do so, raising objection to the road-fed silos. We have issued termination notices due to deficiency in discharge of contractual obligations,” he said.

Then food and civil supplies minister Adaish Pratap Singh Kairon, son-in-law of ex-CM Badal, says the silos were to address storage crisis. On their termination, he said, “I consulted all stakeholders. A minister can only make the policy. Its execution depends on the officials.”

Though as per the corporation’s Articles of Association, director (food) is ex-officio MD of Pungrain, Kairon had appointed his confidante, retired IAS officer Satwant Singh Johal, at the post. Johal was shunted out by the new regime. On timing of signing of the agreements and the lapses that led to termination, Johal said, “Its been a long time, I cannot recall the details.”

(Tomorrow: Badal cabinet approved one model, Pungrain tendered another to benefit private players)