Kochi: Profiteering by public sector undertakings is frowned upon as they have avowed social responsibilities assigned by the State. With increasing competition with private entities, PSUs at times manage to win contracts by bandying the public interest served by its business. The Kerala State Electronics Development Corporation (Keltron), which is in the eye of a storm over an AI camera-based road surveillance project, has been doing this for decades especially after it began trading instead of carrying out industrial activities, claimed industry veterans.
For the deals, Keltron shows a profit of 10% to 15% in the accounts. This is not called into question since it is a fair amount of profit. But crores would have changed hands under this cover. Keltron normally quotes many times the proper amount of contracts. This gets approved through non-competitive tenders in the name of the public sector.
An example is the contract won by Keltron years ago for the preparation of voter identity cards in Kerala. It demanded Rs 18 per card when the rate was only Rs 9 in Tamil Nadu.
After it was realised that Keltron's quote was excessive, a committee was appointed to examine the deal. The committee directed it to show how Rs 18 would be incurred on each card after allowing for a reasonable profit.
All the estimates given by Keltron were inflated. The prices of articles, including digital printers and A4 size papers, were shown as three times of the market rate. It became clear that the cost of cards would be high even at the rate of Rs 10 each. There were over 1.5 crore voters then. It was clear that when Rs 10 per card is received as profit for this number of cards, Rs 15 crore to Rs 18 crore would fill the pockets of some persons.
When it was found that the assessment of the committee was unfavourable, high officials of the Department of Industries hailing from North India intervened and warned not to stand against the interests of the public sector! Experts on the committee said that they had pointed out that it was not in the interests of the public sector but those of private persons. When the foul play was exposed, the rate had to be reduced below even Rs 10.
Instead of executing a contract that is won, Keltron often acts only as the mediator. The contract is subcontracted to many others. Most of the time, even before the tendering process begins, it would be decided which private companies should do the work and the amount of kickbacks that would be made through this.
Experts claim Keltron has been indulging in such unfair trade practices in buying software too. Often the software is bought through companies owned by the relatives of political leaders!
The latest row over Keltron follows allegations that it quoted an excess rate for the AI surveillance project for roads in Kerala and subletting the deal to undeserving private entities.
