The Rs 600 crore high-security hologram tender controversy in the excise department has brought out a new dimension in the ongoing tussle between the bureaucracy and the ministers. The Telugu Desam has accused excise minister Mopidevi Venkata Ramana of favouring one of the bidders - a joint venture of Holostik India Ltd and OITC Consulting -- in the tender process because his son was given stakes in the company.
Sources told this newspaper that the minister, however, complained to Chief Minister N. Kiran Kumar Reddy against his department’s senior officials for twisting the facts and leaking out wrong information to the TD leaders to defame him. The CM is also said to have been informed that all this was done to eliminate Holostik JV and award the contract to another company in which son of a former CS held interests.
Inquiries revealed that the government directed the excise department in August 2010 to also call for tenders for supply of high-security holograms and excise commissioner Sameer Sharma incorporated the bar code, track and trace system in the project to prevent sale of liquor on which paying duty is evaded. The hologram companies formed JVs with software firms and submitted bids. Of the eight bidders, Holostik, Uflex and a JV of Process Colour and Blue Frog Mobile Technologies remained in the fray.
In the meantime, the excise department asked Holostik to clarify on allegations that there is a “conflict of interest” in the form of the IT partner OITC, also owning a distillery. “Holograms are highly sensitive and distillers can’t access them illegally,” Mr Sameer Sharma pointed out. The records, however, established that there is no mention of conflict of interest in the bid document and the department indeed clarified in the pre-bid meetings that conflict of interest will arise only when a company finally bagged the contract.
Distillery owner Niranjan Agarwal also quit the IT firm to avoid conflict of interest. Without taking any decision on the explanation, the expert committee asked the three bidders to submit an undertaking that there will not be any conflict of interest once they were selected. Ironically, the department itself, while obtaining the undertaking, allowed conflict of interest up to five per cent. “The JV company can have stakes in any distillery only up to five per cent,” Mr Sharma said.
