Lok Sabha Question No. 1572 (UNSTARRED), answered on 2020-09-20
Subject: Malpractices in Procurement and awarding of Contracts and Tenders by CPSEs
Ministry: HEAVY INDUSTRIES AND PUBLIC ENTERPRISES
Asked by: Bhola Singh, Jayanta Kumar Roy, Vinod Kumar Sonkar, Raja Amareshwara Naik, Sangeeta Kumari Singh Deo, Sukanta Majumdar

## GOVERNMENT OF INDIA MINISTRY OF HEAVY INDUSTRIES AND PUBLIC ENTERPRISES DEPARTMENT OF PUBLIC ENTERPRISES

## LOK SABHA

## UNSTARRED QUESTION No. 1572

## ANSWERED ON 20.09.2020

## MALPRACTICES IN PROCUREMENT AND AWARDING OF CONTRACTS AND TENDERS BY CPSES

## 1572. SHRI BHOLA SINGH:

DR. JAYANTA KUMAR ROY:

SHRI VINOD KUMAR SONKAR:

SHRI RAJA AMARESHWARA NAIK:

SHRIMATI SANGEETA KUMARI SINGH DEO:

DR.SUKANTA MAJUMDAR :

Will the Minister of HEAVY INDUSTRIES & PUBLIC ENTERPRISES be pleased to state:

- (a) whether  there  have  been  reports  of  malpractices  in  procurement  and  awarding  of contracts and tenders by Central Public Sector Enterprises (CPSEs);
- (b) if so, the details thereof, CPSE-wise;
- (c) whether there is a need for signing of Integrity Pacts by CPSEs and complete digitisation of procurement process to ensure transparency and if so, the details thereof;
- (d) whether there is an urgent need to delink CPSEs from administrative Ministries, run them by professionals and list them on stock exchange and if so, the details thereof;
- (e) whether  retiring senior officials  from  CPSEs  joining  lucrative  posts  with  private companies with which they have had dealings is a worrying trend; and
- (f) if so, the steps taken by the Government for improvement of the functioning of CPSEs?

## ANSWER

## THE MINISTER OF HEAVY INDUSTRIES & PUBLIC ENTERPRISES (SHRI PRAKASH JAVADEKAR)

(a)  &  (b):  The  Central  Public  Sector  Enterprises  (CPSEs)  function  under  the  administrative control  of  the  respective  Ministries/  Departments.  The  complaints  regarding  malpractices  in procurement and  awarding of contracts and tenders in respect of CPSEs  are dealt by Central Vigilance  Commission,  Vigilance  Offices  of  respective  Ministries/  Departments/  CPSEs  and action  is  taken  on  them  after  investigation  as  per  laid  down  procedure  by  the  concerned authorities.

(c): Government has issued instructions in July 2011 that all Government Ministries /Departments including their attached/subordinate offices and  autonomous bodies may use the generally applicable Integrity Pact in their procurement transactions/ contracts. These instructions have also been extended in September 2011 to CPSEs. The administrative Ministry/ Department  concerned  is  responsible  for  the  implementation  of  the  guidelines  in  respect  of CPSEs  under  its  control.  The  practice  of  entering  into  Integrity  Pacts  is  expected  to  address corruption in procurement transactions/contracts and to promote transparency in public procurement.  Department  of  Public  Enterprises  (DPE)  has  issued  guidelines/  instruction  to CPSEs  for  mandatory  publication  of  tender  enquiries  on  Central  Public  Procurement  Portal (CPP)  on  20 th December,  2011  and  on  boarding  of  Government  e-Marketplace  (GeM)  on  5 th November, 2018.

(d):  In  order  to  delegate  operational  autonomy  to  the  CPSEs,  Government  has  introduced Maharatna, Navratna and Miniratna schemes. The Board of such CPSEs are empowered to take decisions  in  the  areas  of  capital  expenditure,  investment  in  joint  ventures/subsidiaries,  human resources  management,  etc.  The  appointment  of  functional  Directors  of  CPSEs  (CMD  and fulltime Directors)  on the Boards of CPSEs is made on the basis of laid down eligibility criteria and selection process of Public Enterprises Selection Board in line with job description/operational requirements of the CPSEs . Regarding listing of CPSEs, Department of Investment and Public Asset Management (DIPAM) has issued guidelines on 17.2.2017 laying down the mechanism and procedure for time-bound listing of CPSEs on stock Exchanges. DPE has  also  written  on  13 th March,  2020  to  the  administrative  Ministries/  Departments  to  take appropriate  steps,  in  coordination  with  DIPAM,  to  ensure  timely  listing  of  eligible  unlisted CPSEs under their control.

(e)&(f): DPE has issued guidelines on  15 th May, 2008 which inter-alia provides that functional Director  of  the  company  including  the  Chief   Executive   who   has retired/resigned from the    service    of    the    company,    after    such    retirement/    resignation,    shall  not  accept    any appointment  or  post,  whether  advisory  or  administrative,  in  any  firm  or company,  whether Indian  or  foreign,  with  which  the  company has  or  had  business relations,  within  one  year from his/her date  of  retirement  without the prior  approval  of Government. The guidelines also provide that the concerned   administrative   Ministry/Department   shall   examine   requests received      from  Functional  Directors  including  Chief  Executives  on  a  case  to  case  basis.  For improvement  in  the  functioning  of  CPSEs,  DPE  has  issued  guidelines  on  (i)  Corporate Governance,  and  (ii)  professionalization  of  Boards  of  CPSEs  by  appointment  of  Independent Directors  on  the  Boards  of  CPSEs,  and  also  organizing  orientation  programmes  for  capacity building of Directors of CPSEs, etc.

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