Tur deal may cause Rs 1,500 crore loss to state exchequer

Govt changed terms to favour Nashik trader; marketing min Subhash Deshmukh in khichdi

Mumbai : A pot of khichdi, using tur dal, seems to have been cooked to a roast in the state. A year before the next Assembly poll, the Devendra Fadnavis-led BJP-Shiv Sena alliance government may find on its plate a scam in the milling and crushing of tur (arhar) worth Rs 1,500 crore.

Documents in possession of The Free Press Journal reveal that the marketing department awarded the bid to process 25 lakh quintals of tur into (tur dal) to a Nashik trader and supplier — Saptashrungi Traders, in violation of its norms. Finance Minister Sudhir Mungantiwar has expressed fears that an amount of around Rs 1,500 crore given to the Maharashtra State Cooperative Marketing Federation (MSCMF), the nodal agency to procure tur from farmers in 2017, will not be recovered.


 
According to Mungantiwar, tur is being stored in godowns across the state for the past 14 months and will soon go to seed for want of a speedy milling process. However, the owner of Saptashrungi Traders, Dwarkanath Rathi, has refuted the allegations and said that he was awarded the tender through legal channels and will achieve the milling target in the next three months. In season 2016-17, tur producer farmers found themselves in trouble after a record 115 lakh million tonne-harvest of tur. The procurement prices for tur declined and hence aiming to give relief to the farmers, the state cabinet, chaired by CM Devendra Fadnavis, had decided to procure tur from farmers through a market intervention scheme with minimum support price of Rs 5,500 per quintal. The government appointed the MSCMF as the nodal agency and procured 25,25,304.45 kg (25.25 lakh) quintals till June 2017.

The state government allowed MSCMF to borrow Rs 1,400 crore from nationalised banks to pay farmers for procurement of tur and also stood guarantor for the loan. The federation repaid banks Rs 11 crore in interest per month and is still paying Rs 1.5 crore as rent to use godowns for storage of tur.

The government decided to crush tur and distribute it to ration shops through the public distribution system (PDS) and provide it to various departments of the state as per their requirement.

Hence, the federation called for the first bid for the milling of tur on August 14, 2017. The most important and mandatory condition was: Only millers could participate. In all, 10 millers submitted bids but were all rejected on technical grounds.

Another bidding condition was that the millers had to produce ‘sortex’ quality tur dal and supply it to the government. (Sortex is a machine that ‘sorts’ or sieves rice/dal and ensures that the rice/dal that emerges is of uniform size and not a mix of small, normal and broken grains). In lieu of milling, the miller can keep and sell by-products in the operation but the yield must be 70 per cent. What this means is that for 100 kg tur, the miller must provide 70 kg of milled dal. The food and civil supply department, in its letter dated July 8, 2017, had stated that the expected yield would be 72. The National Agricultural Cooperative Marketing Federation (NAFED) and Food Corporation of India (FCI), the central nodal agencies in 2015-16, had given 71.92 per cent yield.

A second bid was called on September 9, 2017. This time the mandatory condition that only millers could participate was diluted to allow even traders and suppliers to participate. Nineteen bidders participated, of which four were rejected and 15 found eligible. Of these, the Khalapur-based ETC Pulses Company and Nashik-based Saptashrungi Traders made it to the final round. ETC had quoted 67.5 per cent yield for 50 kg packing, whereas Saptashrungi had quoted 65 per cent yield for one kg packing.

The Government Resolution (GR) of the food and civil supplies department, dated October 25, 2017, had clearly stated that the bid was to be given only to mills which had the capacity to process 2,000 metric tonnes per day. The government had informed MSCMF about this condition in October 2017 via email. Despite this, MSCMF awarded the tender to Saptashrungi, in clear violation of government orders.

Dhananjay Munde, leader of opposition in the council, alleged a nexus between Rathi and MSCMF. “Rathi is having tur crushed by other millers as he does not have the milling equipment. He is supplying substandard tur dal to the government as against the high-quality tur supplied to him by the government.”

Munde further alleged, “As of now, Rathi has only had two lakh MT tur crushed and at this rate, it will take nine years to crush all the tur. In this much time, the remaining tur will rot and become unfit for use. Rathi will earn at least Rs 139 crore by profiting from the sale of tur dal while the state stands to lose at least Rs 2,000 crore.”

Finance Minister Mungantiwar said, “At least, if the crushed dal is provided at a low cost of say Rs 35 per kilo to ration shops, we can recover some amount of the total Rs 1,500 crore given to the federation. We are reviewing this issue and it will be sorted out very soon.”

Rathi said, “I have hired at least 17 millers across the state and will able to crush all the remaining tur within the next three months. As of today, we have crushed around six lakh MT tur.” He refuted allegations that minister Subhash Deshmukh had favoured him. “It was the state government and the federation’s first experience in milling tur in huge quantities. No miller has the capacity to crush 2000 MT tur per day. Hence, the condition in the bid was reduced to 50 kg per day. This is not in violation of any rule or favouritism,” clarified Rathi.

Deshmukh, however, said that the allegations are baseless. “In fact, we received a tremendous response from 19 bidders.”




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