New Delhi: Breaking syndicates formed by contractors, giving them monetary and other incentives, and rating them on their performances — these are some of the recommendations made by the Central Vigilance Commission (CVC) to prevent delays and improve the quality of projects awarded under the public procurement system.
A concept paper drafted by the CVC late last year has noted that over 80 per cent of public projects are currently running behind schedule. It also said the quality of various public projects that have been completed is a “major area of concern”.
The paper, a copy of which has been accessed by ThePrint, also said public procurement constitutes 20 per cent of India’s GDP or around Rs 40 lakh crore.
The CVC’s paper has been circulated among government departments. It came days after government think tank NITI Aayog made a recommendation to review the way bidders are selected for public procurements. NITI Aayog’s recommendation was part of a larger proposal to amend the General Financial Rules (GFR), 2017. These are a compilation of rules and orders from the Government of India, to be followed by anyone who deals with matters involving public finances.
The NITI Aayog had also recommended forming a national policy framework for the Swiss Challenge method as part of the GFR review. Under the Swiss Challenge method of procurement, a candidate makes a proposal for a project, which the government puts before the public to seek more proposals. Once these are received, the original candidate is allowed to match the best bid.
According to a senior government official, various government stakeholders are now deliberating on the recommendations made by the vigilance panel and the NITI Aayog.
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Why public projects get delayed
In its concept paper, the CVC has highlighted multiple factors that contribute to delays in public projects. In many instances, the paper noted, project reports don’t take into account the ground realities. As a result, the design of various components of some projects has to undergo changes in their later stages, it added.
Citing this as a factor that contributes negatively to the progress and quality of projects, the paper noted that invitation of tenders or award of contracts without securing the required statutory clearances — such as environmental, or those from the Archaeological Survey of India and other bodies — leads to further delays and unnecessary expenditure.
Invitation of tenders or awarding contracts without ensuring availability of required funds, delay in providing human resources, materials or machinery by a contractor, as well as unavailability of land, are some of the other major factors hampering a project’s development, it added.
Factors causing delays include the fact that a large number of subcontractors are hired by the main contractors, many of whom lack the competence to execute work under the requisite standards of quality and within the specified time frame, it said, adding that non-participation of all members in a joint venture is another reason.
It also flagged “non-usage” of IT-enabled project management systems, independent external monitors, lack of incentives, and a large number of arbitration cases.
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CVC’s recommendations
The CVC paper has recommended breaking “syndicates” formed by contractors and allowing newer players to bid for government tenders, in order to ensure fair competition. Syndicates refer to groups of contractors who bid in tandem for specific projects.
It also said providing incentives — such as a bonus for completing projects before time, and felicitating the best performer at public functions — and assuring timely release of payments could help in the completion of projects on time.
The CVC’s concept paper has also suggested having a robust system for judging the performance of contractors, and rating them accordingly.
Review of projects, keeping a check on the quality of materials used, and supervision of work are some of the other recommendations made by the CVC paper.
To check subcontracting of projects, the CVC paper has suggested monitoring a main contractor’s involvement in work, and imposing a penalty or issuing an adverse performance rating if they err. It has also recommended mentioning basic qualification criteria for selection of sub-contractors in the contract itself.
The paper has said that the public authority in-charge of a project should secure all necessary statutory clearances before inviting bids or the award of contracts.
Everyday progress of a project should be tracked using IT-based project management solutions, the CVC paper added.
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