L-G Panel Recommends Delhi Govt To Scrap Rs 3,412 Cr Maintenance Contract For Low-Floor AC Buses 

The committee said that while the tendering procedure for the procurement of buses has no serious flaws, deviations from the process when it comes to the AMC tendering have been prevalent. 

(File Photo/ Getty)

New Delhi: A three-member committee chaired by Lt Governor Anil Baijal has recommended that the 12-year annual maintenance contract (AMC) of Rs 3412-crore, given by the Delhi Transport Corporation (DTC) for 1000 low-floor buses be terminated due to "procedural lapses." 

The committee concluded in its findings that while the tendering procedure for the procurement of buses has no serious flaws, deviations from the process when it comes to the AMC tendering have been prevalent. 

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“While separate bids for purchase and AMC can be justified with a view to getting greater competition and a larger number of bids, the efforts made to get more bids are not apparent”, it said. 

For the buses, the DTC issued separate purchases and AMC tenders. Originally, a Rs 4265 crore contract for AMC of 1250 buses was approved; however, the amount was eventually lowered to 1000 buses. JBM Auto and Tata Motors received a 70:30 split of the purchase order. The vehicle makers were also awarded the maintenance contract because they were required to bid for AMC. On June 12, however, the acquisition, as well as the AMC, were both placed on hold. 

The committee's report to the L-G stated that the eligibility conditions for the AMC offer were very tight, and the rates were "far higher" than those in prior contracts floated by the organisation adding that only a total cost review was performed while the procedure of discounting for a longer period contract was not done.  

On being asked about the issues that compromised the tendering process, the committee explained that because the DTC is only allowed to purchase low-floor CNG buses due to court rulings, it has to manage with a market with few manufacturers. 

The Delhi government had previously stated that after the low-floor buses are introduced, the total fleet of DTC0 buses, which currently stands at 376, will grow to 4760. The DTC last bought new buses in 2008.