More trouble in store for Senthilbalaji, NGO alleges Rs 397 cr scam in transformer procurement, moves HC demanding probe

Chennai, Apr 12 (Representative) An NGO, which has been fighting against corruption, has moved the Madras High Court demanding a probe into the alleged Rs 397 crore scam in procurement of distribution transformers between 2021 and 2023 when V.Senthibalaji, now lodged in prison after his arrest in a moneylaundering case, was the Electricity Minister. The petition was filed by Arappor Iyakkam seeking a direction to the Directorate of Vigilance and Anti Corruption (DVAC) to register a case into the alleged scam. Apart from seeking a direction to the DVAC, the NGO also wanted a High Court-monitored probe by a Special Investigation Team (SIT), since materials collected by it had reportedly revealed losses to the tune of Rs 397 crore to the public exchequer due to collusive bidding for supply of the transformers to the Tamil Nadu Generation and Distribution Corporation (TANGEDCO). In an affidavit filed before the court on Tuesday, Arappor Iyakkam Managing Trustee Jayaram Venkatesan submitted that distribution transformers were used to step down the voltage used in distribution lines to a level that is usable by the end consumer. TANGEDCO procures these transformers in various capacities, ranging from 25 KVA to 500 KVA, depending on the load capacity requirements.

The procurement takes place by inviting tenders through online. Hence, the petitioner analysed 10 tenders floated between 2021 and 2023 for procurement of 45,800 distribution transformers. The total value of these tenders floated by the TANGEDCO amounted to Rs 1,182.88 crore, he claimed. The tenders were examined by Arappor Iyakkam from the viewpoint of the number of participating bidders, the value quoted by each bidder, the prevailing market rate, and other parameters to find out if there were any irregularities. The elaborate exercise led to the finding that in seven of the 10 tenders there was clear evidence of unjust enrichment to the contractors through collusive bidding and cartelisation, and the resultant loss to the public exchequer was found to be Rs 397 crore, he said. “It is interesting to note that in each of the 10 tenders, more than 26 bidders were shown to have participated, thereby creating an apparent image of healthy competition, but what is to be noted is that in all tenders, almost all bidders had quoted exactly the same price corrected to the same decimal points,” the affidavit said. It said “It is mathematically near to a zero probability for more than 20 bidders to have quoted the exact same rate in tenders.

The only logical and plausible conclusion that follows from this fact is that these bidders have conspired and colluded amongst themselves to prefix the rate and had thus snuffed out the competition and made a mockery of the tender process.” Stating that there were materials to suspect the involvement of the then Minister Senthilbalaji, TANGEDCO CMD Rajesh Lakhoni and Financial Controller (Purchase) V. Kasi in the entire process, the petitioner had included all three of them as respondents to its writ petition. Mr Senthilbalaji was presently in judicial custody after he was arrested by the Enforcement Directorate in the cash-for-jobs scam during his tenure as Electricity Minister during the previous AIADMK regime. He later quit the AIADMK and joined the DMK and made a Minister after the DMK came to power in 2021. He resigned as Minister after the court took objections in his continuance as a Minister without portfolio even after his arrest on June 14, 2023.