BEL under scanner over Rs7,900-cr IACCS project: report
02 April 2019
Defence public sector undertaking Bharat Electronics Limited (BEL) is under the scanner for allegedly compromising national security by awarding a highly sensitive air command and control contract of the Indian Air Force to an ill-equipped and newly formed private design firm in 2011.
An internal enquiry report on the award of the Rs7,900-crore project for implementation of the Integrated Air Command and Control System (IACCS) at 10 locations across the country has exposed massive irregularities in the way the contracts were awarded, say reports.
BEL is the executing agency for the highly-sensitive IACCS project - an automated command and control system for air defence operations that integrates all ground-based and airborne sensors.
Reports citing BEL's internal investigation report said a BEL official, who was instrumental in the hiring of a private vendor to put together the Preliminary Project Report (PPR) of the coded system, joined the same private company after retirement.
Also, the report said crucial project documents were buried to avoid scrutiny by the investigation team which was looking into the irregularities.
BEL’s internal inquiry report, prepared in October 2018, flagged discrepancies at various stages of the execution of the project. The report questioned the move to hire RD Konsultants to prepare the PPR in 2011 and then bringing the same company on board as the design consultant in 2013, violating the norms during UPA regime.
The inquiry report also red-flagged other serious issues, including monumental lapses in ordering the execution of the contracts at all 10 sites across the country and deviations in the implementation at certain project sites where BEL had to bear additional expenditure.
According to the inquiry report, BEL first hired RD Konsultants in September 2011 to prepare the PPR for IACCS. The firm, a 50-50 partnership between Ruby Kant and Suresh Kumar Anand, was barely one and a half years old when it was hired. Despite these, BEL top brass approved the proposal to award the contract to the company on 6 September 2011.
An accompanying note on the award also made it clear that "as per corporate vigilance guidelines, RD Konsultants' should not have been considered for similar requirements in the future.
The inquiry report also flagged the way RD Konsultants was hired to prepare the PPR. The note added that for the IACCS project, BEL would have to look for new consultants for "future requirements of consultancy".
"...No norms of Request for Proposal or tendering were followed, but it was selected just based on a recommendation by the Defence Research and Development Organisation (DRDO) with no written correspondence from the DRDO," it said.
But BEL officers went a step ahead to allegedly favor RD Konsultants in the second stage of the project while hiring a consultant to prepare a Detailed Project Report (DPR), the inquiry report suggested.
RK Handa, who was the general manager of the BEL's Network Centric System (NCS-Strategic Business Unit) at the time, was part of the committee that selected the vendors and hired RD Konsultants in 2011, the report noted.
"In fact the file raised in October 2012 should have been in continuation to the file initiated on 28 July, 2011. Why it was not done needs a detailed investigation with respect to malafide intentions to violate the Central Vigilance Commission's guidelines for hiring of consultants," it added. "Even in the selection of M/s RD Konsultants for the second time, there were a lot of deviations from the norms laid down."
BEL signed the second contract with the firm in September 2013 to prepare the DPR of all 10 IACCS sites. The inquiry report noted that RD Konsultants was paid Rs13.5 lakh for consultancy charges to prepare the PPR but Rs15.94 crore for the DPR, alleging that someone was pulling the strings to favour the company, and that the financial criterion was changed twice during the course of selection of vendors.
It was also verified by the chartered accountants that RD Konsultants' had been established in April 2010, but to show a turnover in the last three years as required, they showed a turnover in 2009-10. This clearly shows that false information was provided. Also, a company that came into existence on April 2010 showed that its employees had an experience of five years in 2013, again a false information.
The chartered accountant certificate enclosed with the inquiry report does not mention a telephone number. The letterhead of the CA firm merely shows an address of Shakarpur in New Delhi, the report adds.