‘Karnataka ration card project led to loss of Rs55 crore’

Karnataka’s food, civil supplies and consumer affairs department has wasted Rs54.53 crore by entrusting to a private company the computerisation project to digitise the data collected through a house-to-house survey and issue computerised ration cards to the eligible families.

The department wasted `54.53 crore through its failure to enforce the agreed terms of implementation during the projects lifetime,” said a CAG report, tabled in the just-concluded legislature session.

The project, approved by the government in 2005, sought to eliminate ineligible ration cards, besides creating an effective distribution management system to ensure availability of rationed articles, reduce leakages and provide an efficient and real-time Management Information System.

The department selected a partner in March 2006 under the Build, Operate and Transfer model of public-private-partnership through a bidding process to implement the comprehensive project over a period of five-and-a-half years.

However, the government’s decision to adopt the PPP route had not been taken after considering all alternatives. Balanced sharing of risks between the government and the private sector partner had not been ensured for enduring success of the PPP arrangement and the choice of PPP was not taken after due diligence.

The selection of the private partner and the qualifying procedures were flawed, resulting in selection of the partner who did not have the capacity to deliver.
   
( With inputs from PTI)