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Karnataka’s Rs 620 cr Safe City project, irregularities in tender process, whistleblower D Roopa’s side of the story and links to IMA Gold scam

D Roopa, a whistleblower in the present case, found several irregularities in the bidding process and added that she only contacted the consultant firm to seek details on the manner in which tenders are being drafted to allegedly favour one firm.

Last week, a major controversy erupted in Karnataka after senior IPS officer and Home Secretary D Roopa made allegations of several irregularities in the bidding process for the Rs 620 crore Bengaluru ‘Safe City’ project.

The controversy began after a report had falsely claimed that a woman IPS officer in Karnataka had impersonated the state Home Secretary i.e, D Roopa, to seek classified details regarding the Rs 620 crore ‘Safe City’ project that is being funded by the centre’s Nirbhaya Fund. A report by Times of India had claimed that the Bengaluru City police was not happy with the officer’s interference in the project even as the process of selecting the bidder was underway.

The Bengaluru City Police had hired an independent project management consultancy – Ernst & Young to prepare a request for proposal (RFP) for the project and had uploaded it on November 11. However, the Bengaluru city police came to know that a woman officer had contacted the project consultants on November 7, even before the tender was uploaded, to seek details about their previous cancelled RFP based on the allegations made by one of the bidders.

The project, funded by the Centre under the Nirbhaya Fund and aimed at ensuring the safety of women and children, envisages installation of 7,500 different types of surveillance cameras across the city. Under the project, Bengaluru was one of the few cities in the country chosen to make urban spaces safer for women and children. The project includes installing of CCTV cameras, surveillance systems, panic buttons and GIS mapping of crimes in the city.

Later, it was revealed that the woman officer was supposedly IPS officer D Roopa, who had sought documents from the Ernst & Young officials in her capacity as the Home Secretary.

The Home Secretary had found serious irregularities in the RFP of the tender document for the ‘Safe City’ project when she studied the Nirbhaya Safe City project file in the Home Department. D Roopa clarified in detail stating that it was she who called the Ernst & Young officials to know the details pertaining to the tender documents, with the intention of ensuring that the tender process did not favour any single bidder.

D Roopa, a whistleblower in the present case, found several irregularities in the bidding process and added that she only contacted the consultant firm to seek details on the manner in which tenders are being drafted to allegedly favour one firm.

IPS Hemant Nimbalkar accuses Home Secretary D Roopa of ‘impersonation’ and ‘illegal interference’ in the project

Following the intervention by the female cop to seek the details of the tender over allegations of irregularities in the project, IGP Hemant Nimbalkar, the husband of Congress MLA Anjali Nimbalkar, who is the Chairman of Nirbhaya Tender Inviting Committee and chairman of Tender Scrutinising Committee, had filed a complaint with the chief secretary stating that the officer unauthorisedly tried to “access classified information before the publication of tender for wrongful gains”.

Nimbalkar wrote to the Chief Secretary on December 7, requesting an enquiry into what he said was “a clear case of impersonation” as Home Secretary to the Government of Karnataka for getting access to classified information with respect to the RFP in preparation for the Safe City project before the publication of the tender, for wrongful gains without any lawful authority and locus standi.

Though Nimbalkar has not named D Roopa in his letter to the Chief Secretary, he said the “impersonation as Home Secretary … amounts to undue illegal interference in the tender process initiated by the Government of Karnataka by an unauthorised person”. 

However, both the charges of ‘impersonation’ and undue ‘illegal interference’ in the tender process made by IGP Nimbalkar against Home Secretary Roopa are disputed, since firstly, D Roopa has herself disclosed that she in her capacity as the Home Secretary had sought details from the consultancy group regarding the irregularities in the tender process. Hence, she says that she acted under her powers as the Home Secretary of the state.

Secondly, the charges of undue interference into the project by the D Roopa, on the basis of which a complaint and enquiry committee has also been initiated by the Home Department, are also disputed since the Home Secretary was a part of one of the meetings of ‘Safe City’ Project as an invitee by the Additional Chief Secretary Rajneesh Goel on October 27, much before the tender was floated.

Here is a letter attached written by Additional Chief Secretary Rajneesh Goel inviting Home Secretary D Roopa to be part of the ‘Safe City’ Project meeting to discuss the tender bidding process. Hence, she was not only aware of the ‘Safe City’ Project but also was first to appraise the Additional Chief Secretary about the irregularities in the project, prompting CS Vijay Bhaskar to invite her for the Apex Committee meeting.

Letter written by Additional Chief Secretary Rajneesh Goel inviting Home Secretary D Roopa to be part of the ‘Safe City’ Project

According to D Roopa, she was handed over the ‘Safe City’ Project file by the Additional Chief Secretary of the Home Department Rajneesh Goel IAS himself, who asked her to study the project. It was when she discovered the irregularities in the project, which she promptly brought it to the attention of her senior officers, including the Chief Secretary.

From the above official communique, which was perused by OpIndia, it can be said that D Roopa, as the Home Secretary of the state, was very much part of the process and has all the stipulated powers to seek information pertaining to the ‘Safe City’ project.

Irregularities in the tender process

The tender inviting and bidding process of Bengaluru Safe City project envisaged to make the city safer for women and children by installing over 7,500 CCTV cameras, is being allegedly influenced to favour a particular vendor. It is pertinent to note that Hemant Nimbalkar IPS is the Chairman of both Tender Inviting Committee and chairman of Tender Scrutinising Committee of the ‘Safe City’ Project.

The proposal for the ‘Safe City’ Project, was first mooted by the police in 2013. However, it was approved by the Modi government only in 2018. Under the project, the centre will grant 60 per cent of the total funds, while the State government has to spend the remaining 40 per cent. The state government approved the project in October 2019. Since then, the tender process has been cancelled twice and the third one is underway but is at risk of being allegedly influenced to favour a single vendor.

The first RFP that was floated got cancelled in January 2020 over the failure of participants to pass pre-qualification criteria. The process started for the second time in June this year but was cancelled after one of the prospective bidders had pitched products from Chinese firm Huawei. The tender was cancelled in the light of the recent ban imposed on Chinese products by the Centre and the state government after the Galway Valley clash earlier this year.

Interestingly, the Bharat Electronics Limited, one of the bidders in the tender process, was in fact the first one to whistleblow pertaining to the irregularities in the project. After the tender process began for the first time in November 2019, the Bharat Electronics Limited (BEL) had written a letter to the Commissioner of Police, Bengaluru highlighting how the Request For Proposal (RFP) for inviting tender in the ‘Safe City’ project was drafted in such a way that it unreasonably favoured one of the two vendors.

In its letter, the Navratna company, which has a rich experience of delivering similar projects, noted to Bengaluru Police Commissioner that the tender inviting process has itself put the other bidders in a disadvantageous position despite having vast experience in the similar projects. The BEL, flagging the irregularities, said that some of the provisions of the tender also violated CVC guidelines.

Letter from BEL

In the letter, the BEL has explained in detail how certain technical provisions that have been included in the qualification criteria of the participation is not very selective but also violated CVC norms. Further, the BEL, without naming the particular vendor, alleged that the tender has been designed in such a way that it favoured a particular vendor.

The BEL has pointed out that the evaluation of the bid is based on Quality and Cost Based Selection (QCBS) methodology and the above clauses restricted wider participation thus ‘favouring few individual vendors during technical evaluation’.

Letter by BEL

According to the Karnataka Transparency in Public Procurements Rules, 2000, the Quality and Cost Based Selection (QCBS) method is not permitted for the ‘Supply for Goods & Services’ or ‘Construction’, but only be used to invite tenders in the ‘Consultancy’ process. In the QCBS process, unlike the ‘Least Cost Selection’ or ‘Single Source Selection’ – the bidders are selected on the technical parameters, based on a scoring process. The final vendor is then selected on the basis of the highest score a particular vendor has achieved.

Under this process, the Tender Inviting Committee and Tender Scrutinising Committee can influence the RFP in such a way that one particular vendor is favoured over others by imposing technical parameters that benefited that particular vendor. Thus, the tender committees enjoy a particular discretion in finalising the final vendor in a particular bid.

The BEL, in its letter to the Commissioner of Police, Bengaluru has highlighted the same by pointing out that how can a ‘construction’ and ‘Supply of Goods and Services’ have been tweaked to be included in the QCBS category.

Was Tender Inviting Committee and Tender Scrutinising Committee, headed by IGP Hemant Nimbalkar was favouring a single vendor?

However, months after a letter from the BEL, the entire tender process was itself cancelled as none of the participants was qualified to bid in the ‘Safe City Project’.

Tender for ‘Safe City’ Project invited again

In June this year, the RFP for the ‘Safe City’ Project was floated again by the Bengaluru City Police. Three bidders were finally selected based on the QCBS selection – BEL, Larsen and Toubro and another Hyderabad-based company named as Matrix Security and Surveillance Private Limited.

However, Ministry of Commerce and Industry wrote a letter to Chief Secretary of Karnataka, highlighting that the project will be not be finalised if vendors do not follow the Policy Order of Public Procurement (Preference to Make in India) Order 2017. The MCI had written a letter based on a complaint made by a vendor named ‘Tejas Networks’ asking them to include only Make in India products in the procurement procedure.

The second tender process also has to be cancelled by the Tender Scrutinising Committee after it was found that one of the bidders had pitched products from Chinese firm Huawei despite government banning procurement of Chinese products.

The Bharat Electronics Limited had also written a letter to the Commissioner of Police, again highlighting that there were irregularities in the bidding process. In its letter, BEL had mentioned that two bidders – Matrix Security and Surveillance Pvt Ltd and NCC Ltd, both having common directors who held more than 5 per cent shares, thus alleging that there was a conflict of interest in the bidding process. The BEL alleged that both the bidders had connived and submitted the proposals, which was a clear violation of the RFP conditions.

Interestingly, the BEL has also alleged that the particular company – Matrix Security Surveillance Pvt Ltd, which is allegedly being favoured by the Tender Inviting Committee and Tender Scrutinising Committee of the ‘Safe City’ Project, had quoted Chinese brand ‘Huawei’ for all equipment to be procured in the project and said that the Chinese equipment could possess a greater security risk as enormous data of the residents of Bengaluru can be accessed for tracking and monitoring.

Letter by BEL

Despite, the same tender process being cancelled for two times, the Tender Inviting Committee headed by Hemanth Nimbalkar has now floated another RFP on November 17, 2020, inviting bids for the ‘Safe City’ Project. The Third RFP for the ‘Safe City’ Project, which has been uploaded this month, also is alleged to be favouring particular vendors.

Does Third RFP for ‘Safe City’ project designed to favour a particular bidder?

According to the letters accessed by OpIndia, written by a senior officer to the Chief Secretary, the tender has specifically prescribed a lower turnover requirement, which itself is a violation of the procedures established by Finance Department for tender bidding and also KTPP rules. The third RFP, floated by Hemant Nimbalkar headed committee prescribes that any prospective bidder with the annual turnover of Rs. 250 crore can bid for the ‘Safe City’ Project.

The Third tender issued by the Bengaluru City Police for the ‘Safe City’ Project.

However, according to the KTPP rules and Standard Bid Document of the Finance Department, the turnover of the prospective bidder in at least two financial years must be more than twice the amount expected to be paid in a year in the tender.

The value of Safe City Project tender to be executed is Rs 620 crores and the payment of at least 500 crores is expected in the first year itself. Hence, a minimum annual turnover in at least two years should have been Rs 1,000 crores or at least Rs 500 crores as per the latest amendment by the Karnataka Finance Department. However, in the third tender issued by the Tender Inviting Committee headed by Hemant Nimbalkar has lowered down the limit of the annual turnover to just Rs 250 crores for the last three years.

The qualification procedure specified by the Finance Department in its Standard Bid Document.

Even, the BEL has pointed out the same irregularity saying that the annual turnover has been precisely kept low in the tender to favour specific vendors.

Addition to that, the standard bid document of the state Finance Department has clearly stated that bidding by joint ventures is strictly prohibited. However, the ‘Safe City’ Project tender has tweaked the rules a bit to allow the bidding by consortiums which is a clear violation of the procurement rules of the state.

The Standard Bid Document of Finance Department bars Joint ventures.

Apart from the violation, the ‘consortium’ provision also dilutes the responsibility of the bid winner if he happens to be a consortium and puts the project at undue risk as it allows two consortium members to fulfil the turnover requirement together. The RFP document also does not specify what happens if there is a dispute between the two members of the consortium, putting the project at risk.

To sum up, prima facie, the tender process itself is one where the eligibility criteria seem to have been tweaked by not only lowering the annual turnover but also imposing barriers for the other prospective bidders like BEL by invoking QCBS principle to select the vendor based on subjective criteria. The selection procedure also gives discretionary powers to the Tender Scrutinising committee headed by Hemanth Nimbalkar.

So far, no action has been initiated against the Tender Inviting Committee and Tender Scrutinising Committee even after BEL, a Navratna PSU, made serious allegations since November 2019 pertaining to the procedural lapses in the tender.

Hemant Nimbalkar: An accused in Rs 4,000 crore IMA scam

It is important to remind that IGP Hemant Nimbalkar, the husband of Congress MLA Anjali Nimbalkar, is one of the main accused in the Rs 4,000 crore IMA halal Ponzi scheme. The tainted officer is not only accused but also been charge-sheeted by the Central Bureau of Investigation in the IMA scam case for allowing the main accused Mohammed Mansoor Khan to dupe investors across the state to the tune of Rs 4,000 crore.

The CBI has registered four cases in connection with the IMA scam. According to the charge-sheet, the accused Khan had collected unauthorised deposits from a large number of depositors on the promise of a dream return and had duped them approximately Rs 4,000 crore. The CBI had said that the senior IPS officers including Nimbalkar not only gave a clean chit to the company but also recommended that the complaints be closed stating that IMA had not indulged in any illegal acts.

After charge-sheeting him in the case, the CBI had also recommended disciplinary action of major penalty against Hemant Nimbalkar and other officers for their alleged role in the IMA scam case. The major penalty in terms of the CBI recommendation is a ‘suspension’. However, instead of suspending him, the tainted officer has been made the Chairman of the Tender Inviting Committee and Tender Scrutinising Committee of the Rs 620 crore ‘Safe City’ Project.

The targetting of IPS D Roopa

Home Secretary D Roopa, who was one of the first to point out irregularities in the ‘Safe City’ project, has now been at the receiving end of the allegations of impropriety as a committee has been constituted based on the complaint of Nimbalkar for her alleged interference in the ‘Safe City’ project after she sought clarification from Ernst & Young about the RFP for the third tender issued this November.

The ACS, Home Department has now constituted a committee to enquire into the complaint made by the Hemant Nimbalkar against D Roopa. However, D Roopa has herself clarified that she was the one who called in her capacity as the Home Secretary and there was no question of impersonation. She had also clarified that she is the current Home Secretary and also being an invitee to the meetings of ‘Safe City’ Project, she had the jurisdiction to seek details pertaining to the project.

However, it is being reported that Nimbalkar’s complaint against Roopa to the Chief Secretary for alleged impersonation and illegal interference came after Home secretary D Roopa had given the prosecution sanction on behalf of Government of Karnataka against several in the IMA scam, in which, Nimbalkar is also an accused.

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