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Crores swindled in rice distribution nexus; tainted, controversial company hired for 10 years

August 30, 2017

Srinagar, Aug 27: For a decade, a tainted and controversial company has been the Department of Food, Civil Supplies & Consumer Affairs’ only choice for transporting rations to parts of state.

Since 2008, the company—M/S Ladakh Road Lines, which functions from its Parimpora head office and branch offices in Jammu and Leh—has been continuously working with the State Road Transport Corporation (SRTC) and Department of Food, Civil Supplies & Consumer Affairs (FCSCA).
The records, however, indicate that the company’s past is filled with controversies and possible scandals.

It is yet to clear its challans amounting to Rs 12 crore; for its dubious role, the company’s name surfaced in reports of Central Vigilance Committee and Crime Branch; and as per a complaint lodged in the High Court, the company, in connivance with the government officials concerned, has swindled crores of rupees.

Official documents and sources revealed to The Kashmir Monitor that “corruption, monopoly, and disregard to rules” has become a norm in SRTC and FCSCA.
The official process requires the FCSCA to use SRTC’s services for supplying rations.

The SRTC, given its dearth of vehicles, opens tenders to hire a private transporter to do the job, and gives the contract to one which promises to pay the highest commission to SRTC.

The hired transporter files the challans of the vehicles and trips it has made, which first go to the SRTC and eventually to FCSCA for release of payments.

A Crime Branch report reveals that Ladakh Road Lines (LRL) got the contract for a month in 2008, however the same was extended for the whole 2008-09 “without any tendering process and without fixing the commission of the SRTC”.

The SRTC, the report adds, again extended the contract to the company for 2009-10 “without issuing tenders” and LRL were paid “without executing any agreement”.

For the years 2010, 2011, and 2012, the company continued as a contractor while offering a commission of 11.5 per cent to the SRTC.
On February 24, 2012, SRTC invited tenders for 2012-14 duration, and LRL, as per official records, filed its tender at 37.10 per cent—300 percent more than what it paid to SRTC as commission in previous years.

It, as a result, easily grabbed the contract.
However, as per the Central Vigilance Committee (CVC) Report of December 2012, LRL withdrew its offer on 30.03.2012, for reasons “which were not quite apparent”. The company then, the report says, itself filed some writ petition in the High Court thereby enmeshing SRTC in litigations.
The SRTC cancelled the tender and forfeited the earnest money LRL had deposited.
It, however, allowed LRL to again bid and eventually get the contract 18.5% commission.
Since the court had ordered that the tendering may go on, but the final contract order may not be made, LRL continued to work on only 11.5 % commission.
At present LRL continues to be contractor for the JKSRTC and the FCSCA even though its last contract expired in 2016.
A top official at SRTC, wishing not to be named, told The Kashmir Monitor that there are, at least, 98 trips made by LRL, with the earliest of them in 2010, which have not be reconciled since there is a clash between the vehicle details furnished by FCSCA department and the actual vehicle numbers.
“It seems the rations meant to be distributed in those 98 trips have been siphoned off. If that is true, it is a huge scam worth at least Rs 40 crore. We have halted the payments until we get a clearer picture,” the official said.
The official added that LRL has created a monopoly since some of the top rung employees at SRTC and FCSCA were “on its payrolls” or “even silent partners” who ensure that if there is a tender out, it only and only goes to LRL.
The same point was made by the 2012 CVC report which stated that “whenever tender is invited, it would contain such terms and conditions which will keep out the other competitors”.
The Kashmir Monitor was also able to access the list of 98 missing vehicles compiled by SRTC’s Traffic Manager (Load) on August 08. The column header “actual vehicle number” was left blank.
The official added that “there was a lot of pressure” to release the payments and “to not fiddle with LRL”.
“I can tell you that except the CM’s office, I have received calls from everyone asking me why I was interfering in this matter,” the official said.
To enquire into the scam, the Vice-Chairman SRTC, last month, formed a 5-member committee to conduct an enquiry into the case of mismanagement in handling and transportation, and siphoning off food grains worth crores.
With Financial Advisor and Chief Accounts Officer (FA&CAO) SRTC as its Chairman, the team was supposed to submit its report within one week.
Haji Pervez, Vice-Chairman SRTC, told The Kashmir Monitor that the report had not been prepared yet.
“You know how things work in Kashmir. Since 2014, Ladakh Road Lines has halted our commission by not submitting the challans worth crores. When I took over in March, I sensed that there was something wrong and hence constituted the committee to inquire into it. I expect them to file the report soon. We have sent them a few reminders,” he said.
The FA&CAO SRTC, Pritam Singh, who headed the committee, told The Kashmir Monitor the team has “conducted a meeting into and will furnish the report soon”.
He, however, claimed that LRL had “not created any monopoly” and had received all the contracts only after offering the best rates.
Contrary to the VC, Pritam claimed that “no challans were pending from LRL”. When this reporter showed him a copy of one LRL letter dated October 2016 in which the company itself claims that challans amounting to Rs 12 crore were pending, the CAO said that since then, the new records show that “SRTC has received challans for Rs 6 crores”.
On the 98 trips, details of which are missing from the records, the CAO blamed the FCSCA department saying that they were responsible to “check the vehicles”.
“The Food Department asks for the list of the vehicles, they are the ones who load them and tell them where to supply the ration. They then pay us as per the vehicles they have used,” he said.
Apprised of the whole matter, Chowdhary Zulfikar Ali, Minister of FCSCA said that his department “had properly registered and checked all the vehicles used to ferry the ration.”
He added that the matter was actually nothing but “a tiff between the two companies who are competing for the tender”.
“We had received an audit objection of 1100 vehicles supplied by SRTC of which we did a detailed verification but nothing was established. As far as giving out tenders are concerned, it is the job of SRTC. We have nothing to do with it,” he said.
A petition was recently filed in the High Court by one Haji Goods Carrier against LRL, SRTC and the Food Department.
The court, on August 23, directed the authorities to look into the complaint “with zeal and zest”.
“It is also expected that the complaint of the petitioner shall be looked into and the enquiry shall be logically concluded,” court of Justice M K Hanjura directed.

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