Vigilance Awareness-for tackling corruption and deficit in governance

Vigilance Awareness-for tackling corruption and deficit in governance PRESENTATION BY M. P. JUNEJA Former ADDITIONAL MEMBER RAILWAY BOARD & EX-CTE/CVC 1

CORRUPTION • In layman’s language corruption is defined as misuse of official power for personal benefits. • By TI (Transparency International) Corruption is operationally defined as the misuse of entrusted power for private gain. 2

GOVERNANCE • Exercise of political authority and use of institutional resources to manage society’s problems and affairs (WB). • Use of power and authority by the govt. to realize people’s aspirations. • Laws, procedures & practices that determine the co’s ability to take decisions in the interest of stakeholders.

Corruption and Governance • Root cause of poor/deficit in governance lies in corruption. • Bane of the society • One of the most corrupt – as per TI • Poor governance in Govt. organizations affects the productivity, efficiency and image of the org.

EFFECTS OF CORRUPTION: Corruption affects everybody. • Its effects are four-fold: Political Economic Social Environmental POLITICAL : In a democratic system, offices and institutions lose their legitimacy, when misused for private advantage. ECONOMIC : Economically corruption leads to depletion of national value. 5

EFFECTS OF CORRUPTION: SOCIAL: It also damages the social fabric of society. People lose faith in the political system and its leadership. ENVIRONMENTAL: Environmental degradation is another effect of corrupt system. 6

Ethics and Moral Values • • Truthfulness Honesty Integrity Lack of these corrupts and corrodes the society 7

Secular and Spiritual • Highly Religious but one of the most corrupt as per Transparency International 8

Contradictions • Compassion vs Brutality • Sacred rivers polluted • Corruption in religious institutions • Worship of Women vs cruelty and neglect 9

Reasons for Corruption • Low risk High profit activity • Lack of Transparency and accountability • Red –tapism • Black money trap • Patronage-system 10

VIGILANCE • Watchfulness-Oxford • Every officer is vig. Officer for his area of jurisdiction. • Not a police function. • Friendly critic and part of the management. • Punitive vs preventive vigilance.

Preventive Vigilance • • Prevention is better than cure Check systems which breed corruption Delay in decision making Sensitive Post- identification Citizens Charter Black mailers vs Whistle blowers Role and extensive use of IT 12

Volumes and Challenges • 25% of GDP -$400 b • Likely to increase manifold with 7 -8%GDP growth • Need to de-mystify and simplify the procurement procedures • Total transparency, equity and fairness • Maximise the use of IT 13

Main Objectives of PSUs • To achieve planned targets /output with optimum utilisation of available resources • Resources- 3 M’s-Men, Materials, Money • 3 P’s-Productivity, Profit, Planned Growth • Mismanagement of contracts- results in leakage of revenue and affects image and productivity/profitability 14

Way -ahead • Prompt and Exemplary Punishment • Transparency • E-governance • Admn. Reforms • Role-models Contd.

Contd. • Recent initiatives to promote transparency and accountability • RTI Act 2005 • Integrity Pact • Introduction of Lokpal bill. • Expected reforms – electoral and judicial.

Fear vs greed • No need to fearfollow procedures • Be firm and upright in conduct • Be content • Be vigilant • Don’t be a part of a herd 17

MAJOR AREAS OF CORRUPTION: • • i. iii. iv. Over centralization of power, non transparency in government functions and lack of accountability are the major reasons of corruption. Areas are: Works Contract Supply Contracts Services to internal customers Services to external customers 18

ROLE OF CVC / CTE • • Organization Status Jurisdiction Inspections and Follow-up CVO’s to conduct CTE type inspections.

CVC Guidelines-on contracts • • • Use of IT- transparency Eligibility criterion Sufficient time No changes/amendments- post facto Negotiations-only with L 1 Non restrictive & non discriminatory bidding 20

GUIDELINES OF CVC TO CURB CORRUPTION • CVC guidelines for curbing corruption are available in official site of CVC i. e. www. cvc. nic. in • One of the major circulars by CVC to curb corruption is on banning negotiations with firms other than L-1. Circular dated 18. 11. 1998. CVC letters181198 nego. pdf 21

PURCHASE Two Categories: § § Govt. Purchase Non-Govt Purchase Govt. Purchase is otherwise called public buying or Public Procurement. 22

PUBLIC BUYING DEFINITION Covers the procurement of MATERIALS/WORKS/SERVICES by all government ministries, departments, public sector undertakings under the Central Govt. and the States, Municipal Corporations and other agencies using public fund. 23

CARDINAL PRINCIPLES OF PUBLIC BUYING TO PROCURE MATERIALS/ WORKS/ SERVICES OF THE SPECIFIED QUALITY WITHIN THE SPECIFIED TIME AT THE MOST COMPETITIVE PRICES IN A FAIR, JUST & TRANSPARENT MANNER. 24

Principles of Public Buying. (As per GFR-2005) 1. Efficiency, Economy, Transparency, Fairness & Equitability and Competition in Procurement. 2. Clear and complete specifications in the tenders free of any ambiguity, deficiency 3. Correct Quantity Estimations. 4. Well publicised tendering and bidding procedures. 5. Well recorded deliberations in decision making- No arbitrariness. 25

Contd. . 26

DEFICIENCIES IN PUBLIC BUYING CAUSES • NO MANUAL/ OUTDATED MANUAL • LACK OF STANDARDISATION IN CONTRACT CONDITIONS, SPECIFICATIONS etc. • LACK OF KNOWLEDGE IN EXECUTIVES OF THE PUBLIC PROCUREMENT PROCESS • CASUAL APPROACH • MALAFIDE INTENTIONS 27

PREVENTIVE MEASURSES SUGGESTED • 1. GENERAL 2. ARRANGE ADEQUATE TRAINING TO TECHNICAL STAFF TO SENSITISE THEM TO GOOD CONSTRUCTION PRACTICES / CONTRACT MANAGEMENT ETC. GET THE MANUAL UPDATED SUITING TO THE REQUIREMENT OF FAST TRACK PROJECTS, IF REQUIRED (PREPARE FAST TRACK PROCEDURE). 28

PREVENTIVE MEASURES IN THE ORGANISATION • • Proper manual. Uniform procedure through out organization Dedicated organization. i. e. manned by professionals of fixed tenures so that accountability can be fixed. Transparent & open system. Smoother & faster decision. Training Rotation of sensitive posts. Extensive use of IT-E-procurement. Contd. . 29

PREVENTIVE MEASURES • • Examine the existing organisation Regular inspections & surprise visits Identify sensitive posts/points List of officers of doubtful integrity Blacklisting of unscruplous contractors Conduct rules, Complaint redressal Cut delays, simplify procedures

PREVENTIVE MEASURES IN PUBLIC BUYING STAGES IN PUBLIC BUYING 1. PRE-TENDER STAGE 2. TENDER STAGE 3. TENDER FINALISATION STAGE 4. POST TENDER STAGE Contd. . 31

PREVENTIVE MEASURES IN PUBLIC BUYING • § § 1. PRE-TENDER STAGE i. Estimation of requirements and financial sanction / Project Formulation, Appointment of Consultants. Check on Excess/Inflated, Artificial generation of demand ii. QUANTITY REVIEW / DPR, Estimates / Design etc. Annual provisioning of items having constant demand. Zero based budgeting. Associating user in quantity review. Clubbing of demands for non-standard items. TODAY’s PROBLEMS ARE DUE TO YESTERDAY’S SHORT-SIGHTED SOLUTIONS Contd. . 32

APPOINTMENT OF CONSULTANT § § § Transparent selection through tendering. Fair opportunity to all. Clear evaluation criteria. Consultant is just an expert adviser and should not be the decision maker. Executive should not escape his responsibilities taking the cover of consultant. 33

PREVENTIVE MEASURES IN PUBLIC BUYING 2. (i) § § § Ø Ø (ii) § § TENDER STAGE TENDER DOCUMENT: Unambiguous, complete & easily understandable. Prequalification Criteria Specification: Functional based. Neither too rigid nor too sketchy. Specification & size of general items should be standard. INVITING & OPENING OF TENDERS: Best form of tendering like GT, AT, BT & sometimes LT. Non acceptance of late/delayed tenders. Opening in Public. Non acceptance of any change from firms during tender opening 34

PREVENTIVE MEASURES IN PUBLIC BUYING 3. TENDER FINALISATION STAGE § Evaluation Procedure: To be transparent. § Check for reasonableness of rate and other evaluation criteria including Delivery period § Proper distribution of quantity among firms in the zone of consideration § Recording convincing reasons for passing over cheaper offers § Avoid single quotation against Limited tender § Negotiations with L-1 that too as an exception to rule § Non acceptance of major deviation with financial implications after tender opening § Non acceptance of corrections in the offer without attestation by tender opening officials 35

PREVENTIVE MEASURES IN PUBLIC BUYING § § TENDER FINALISATION STAGE Contd. Non acceptance of conditional discount. Finalization within validity. Contract to be issued as per the firm’s offer- so that it is legally binding. § Ensure agreement is signed and sealed properly in time. 4. POST TENDER STAGE § Monitoring contract execution. § Ideally no amendment after contract. § Avoiding granting extention of DP in routine manner. § Independent confirmation of BG by bank & monitoring its validity. § Be vigilant for request for change in inspection clause, place of delivery, payment conditions, etc. 36

PREVENTIVE MEASURES IN PUBLIC BUYING 4. POST TENDER STAGE contd. i. Ensure that payment made is commensurate with the quantum of work done. ii. Ensure recoveries as per the contract. iii. Maintain proper record of hindrances. iv. All the conditions of contract are satisfied. v. Be vigilant about payment on PVC (Price Variation Clause) account. vi. If there is any performance guarantee clause see that same is complied with. 37

Continued: vii. Time and Cost over-runs to be avoided and penal clauses enforced as per the contract. viii. Watch deviations especially in abnormally high rated and high value items. ix. Carry out all mandatory tests and maintain proper records. x. Ensure compliance of conditions regarding licenses , insurance policies and deployment of technical staff. 38

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