Thiruvananthapuram: In a striking departure from normal policy, the Kerala Government has been granting major concessions to the Uralungal Labour Contract Cooperative Society.
For instance, a 10 per cent price preference is given in tenders to Uralungal as it is a labour contract society. This results in cost escalation. It is pointed out that works which could be completed at a low cost are being carried out by Uralungal at higher bills.
In normal cases, such concessions are given to public sector undertakings and cooperative societies facing a financial crisis. However, Uralungal is a society having assets worth over Rs 4,000 crore and it is reportedly the largest labour contract society in Asia.
The basic condition of any tender is awarding the contract to the institution quoting the lowest amount. However, Uralungal is always given the contract even if it quotes 10 per cent above the lowest amount. According to the government orders in this regard, Uralungal is eligible for the 10 per cent concession for labour contract societies.
Ironically, no other society in Kerala is awarded as many contracts as Uralungal. There are 23,167 societies in the state, including 400 labour contract societies. None of them enjoys as many government benefits as Uralungal.
Initially, Uralungal was given concession only in works under the PWD (Public Works Department). But in February 2020, the government issued an order extending the 10 per cent concession to all works related to all departments. Meanwhile, it is pointed out that awarding works related to KIIFB (Kerala Infrastructure Investment Fund Board), which are carried out with borrowed money, to Uralungal with concessions would cause a severe financial burden on the government.
Since 2008, the PWD and Cooperative Department of the state government have issued four orders in favour of Uralungal. Uralungal had a turnover of Rs 1,430.02 crore in 2021-22 alone and assets worth Rs 4,299 crore as of March 31, 2022.
It has carried out expansion and is presently engaged in sectors such as management consultancy. Even then, the state government is extending concessions to Uralungal as a labour contract society.
Reacting to these charges, Uralungal authorities said that they were only receiving concessions which are available for all labour contract societies. “The estimate of assets worth Rs 4,000 crore is based on the value of the machinery utilised to complete the projects we take up,” they added.
