Hyderabad: Bitten by a financial crunch, the government has written to MLAs and collectors that they must stop the practice of splitting project work to smaller bits worth less than Rs 5 lakh so as to skip the tender process.
The practice is to breakdown a project to smaller components of less than Rs 5 lakh, the threshold below which tendering is not necessary. These smaller bits are then given on nomination basis. The projects are recommended by the MLA from the constituency funds allocated by the government. The government has warned against such practices as it is running short of funds.
The Rs 5 lakh cut-off is imposed by GO No 19 which, activists say, encourages corruption.
Legislators are allocated funds worth Rs 3 crore per annum towards constit-uency development. The collector has to approve the work and release the money.
When works like construction of roads or culverts are approved, the estimates prepared by the engineers run into Rs 20 lakh to Rs 30 lakh. This will require tenders to be called. To avoid this, district administrations divide the work into bits of less than Rs 5 lakh in value and allocate works on nomination basis.
Mr Padmanabha Reddy, secretary of the city-based Forum for Good Governance, alleged that in practice the nominated contractor is generally a follower of the MLA. The Forum Against Corruption has demanded cancelling GO 19.
To end the practice, principal secretary (finance) K. Ramakrishna Rao wrote: “Whenever a work of worth more than Rs 5 lakh is to be taken up, so as to avoid calling for a tender, it is divided into bits of Rs 4.99 lakh (less than Rs 5 lakh) and allotted on nomination bases. In the view of the above, all the collectors are requested to ensure that such practices shall not occur in their respective districts.”
“They are requested to issue necessary instructions to all the executing agencies to examine the entire work, keeping in view the ground reality and not to split the work if it is worth more than Rs 5 lakh,” Mr Ramakrishna Rao wrote in his missive to the collectors.
Earlier, in an attempt to stem the outflow of money, the finance department had instructed departments not to pay bill to contractors which are in excess of Rs 10 lakh without its consent.
