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CAG: MERC picked up consultant sans bid

The Maharashtra Electricity Regulatory Commission has been unable to keep its own house clean as pointed out by the Comptroller and Auditor General of India.

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As a quasi-judicial body, the Maharashtra Electricity Regulatory Commission (MERC) is expected to maintain high standards of transparency in its processes. Instead, when it came to keeping its own house clean, the commission has been unable to do so, the Comptroller and Auditor General (CAG) of India has found.

The MERC, which was using consultant firms on a case-to-case basis, decided in July 2005 to appoint one on retainer basis. But instead of inviting bids, it discussed its requirement with two firms, namely, Deloitte Touche Tohmatsu and ICRA Management Consulting Services Ltd, which had been rendering technical assistance to the commission.

Both offers were rejected. But the third, which came from a private firm founded by two ex-employees each from DTT and IMaCS, was accepted.

This was despite the fact that the DTT offer was Rs35.95 lakh less than that of the new firm, ABPSIA Ltd, and the offer’s validity was over before it was accepted.

The CAG noted that the commission accepted the offer on September 19, 2005, but the firm had already started working from September 9. This indicates the commission was determined to award the work to ABPSIA, the CAG said.

In its response to the CAG, the commission accepted the fact of
award of contract before registration of the firm. But it remained silent on why the commission did not invite public bids in a transparent process.

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