Above: Youth Congress activists demanding the resignation of MP CM Shivraj Singh Chouhan
As the din over e-bid tampering threatens to engulf Shivraj Singh Chouhan, the CM shows a gutsy officer the door to ensure that the truth remains hidden under the carpet
By Neeraj Mishra in Raipur
The CEOs of several large and veteran road construction companies were mystified when after the introduction of e-tendering in the Public Works Department (PWD) in Madhya Pradesh (MP) in 2013, their bids were constantly getting beaten by small margins. Some bids were even more mystifying, especially the ones for construction of roads in Rajgarh area, which were being won by a small Bhopal-based company.
The Bhopal-based company, worth Rs 500 crore in 2005, grew to Rs 20,000 crore, took out a public offering, and expanded to several states and countries. Other rival companies were watching these developments with interest and dismay. By 2016, the e-tendering process had become the norm in MP and as many as nine government departments were deploying it. Tata Consultancy Services (TCS) and Antares Systems Limited (Antares) were the backend service providers. A large technology company alerted the MP Jal Nigam (MPJLN) after it missed several tenders by the narrowest of margins. It complained about the encrypted e-document contents getting modified by backend operators, perhaps in connivance with private companies and bureaucrats. It realised that three of its e-documents had been tampered with after the financial bids were opened in March 2018.
The MP State Electronics Corporation (MPSEDC) which hosts the portal which puts out the e-tenders was alerted, and its managing director, Manish Rastogi, an IAS officer of the 1994 batch, was entrusted with the investigation. A computer expert himself, Rastogi was soon able to determine where the problem lay. He found that multi-village water supply schemes in Rajgarh and Satna districts had been altered in favour of two Hyderabad companies and one Mumbai company. The stakes were high as the concerned bids were stated to be around Rs 2,500 crore. He immediately issued showcause notices to both Antares and TCS.
Rastogi also realised that the bigger fish actually lay in tenders issued by the PWD and the MP State Road Transport Corporation. The methodology of reading the e-documents after they had been filed and subsequently selling them to other parties could not have been pursued without the connivance of backend service providers in charge of running the e-tender software. Both TCS and Antares were chosen due to their reputation and an internal safety check had been built-in by dividing their work. While TCS was responsible for maintenance, hardware, and training, Antares’ role involved development of application and training and maintenance of application software. Both companies and their MDs and heads of departments in charge of e-tendering were given a password which was protected by simultaneous and limited access.
How did Rastogi determine that tampering took place? The MP e-procurement application stipulates that a vendor’s bidding data should be encrypted using Department Tender Opening Authority (TOAs) digital certificate. Simultaneously, the vendor bidding data can be decrypted using TOA’s encryption certificate keys. In March 2018, price bids were opened for each of the three tenders submitted to execute MPJLN’s multi-village rural water supply schemes in two districts. It showed a mismatch of One Way Hash (OWH) value of the vendor. The OWH is a mathematical algorithm to index data of arbitrary size. The original OWH generated at the time of bid submission did not match with the tampered OWH. The “signature verification” page of the portal showed an error message for “signature and certificate validation status”—a crossed tick mark next to “document content is modified”—which meant that the document had been fraudulently accessed.
In response to the notice issued by Rastogi, neither company denied the allegation that e-documents were tampered with. But both companies denied their role in the tampering. That is crucial. That a scam was committed has been established well enough, and like always, now the search is on to determine the culprit or at least someone who can be blamed for it.
Another company called OSMO IT Solutions (OSMO) was engaged in 2016 to determine why the portal was drawing such a poor response. It appears that OSMO was provided with all the passwords. In its defence, OSMO has told the media that it was engaged for a very short time during which it operated out of MPSEDC’s office and submitted its report within two months. It appears that OSMO’s services had been discontinued in 2016 itself.
The facts so far: E-tendering is introduced in MP in 2013. A small Bhopal-based company starts to make profits. The exercise goes on unabated till a bigger company complains. Rastogi uncovers the plot. The scam in MPJLN stands at only Rs 3,000 crore but if one were to take into account all nine departments and all tenders issued since 2013, it will perhaps exceed Rs 60,000 crore. So, what next? Obviously, Rastogi has to be removed as the noise starts engulfing Chouhan and he is implicated by the opposition Congress. So, Rastogi is shown the door, and perfunctorily, in view of the elections in November, three MPJLN contracts are cancelled. The inquiry is handed over to the Economic Offences Wing (EOW) and not the Central Bureau of Investigation (CBI) and now everyone is sitting tight.
EOW ADG Madhu Kumar said: “We have registered only a PE (preliminary enquiry) at this stage and an FIR will be registered only after the PE reveals that a wrong has been committed.” Rather ominous, one would say, for the future of the probe and its direction, since a senior IAS officer has already determined that tampering took place. There are nine more tenders under the scanner and all those responsible for the entire tendering process in each department have been in the saddle since 2013. They have not been transferred out since the scam was unearthed.
The more important questions remain: Why has Chouhan not offered to hand over the case to the CBI? Who is he trying to protect? His name has often been linked with the promoters of the suspect Bhopal-based company. Is he trying to protect them by not including the entire e-bidding process in the ambit of enquiry? Only nine tenders of MPJLN have been included in the EOW enquiry, while the Leader of Opposition in the MP Assembly, Ajay Singh, has written to Prime Minister Narendra Modi that the whole process should be investigated thoroughly. For the Congress, it is a political issue which comes close on the heels of the Vyapam scam and casts doubts over Chouhan’s role. But so far, strangely, it has shown reluctance to go after the bureaucrats who may be involved or the promoters of the Bhopal-based company. Stranger things have happened in politics and we will have to wait and see if the e-tender scam is put to sleep or pursued vigorously. A lot will depend on the election results.