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Business EconomyPosted at: Aug 2 2016 8:12PM


APEC gave undue benefits of Rs 17.42 cr to TUL: CAG

New Delhi, Aug 2 (UNI) The Apparel Export Promotion Council (APEC), which monitor garment exports and imports, granted undue benefit to a private firm Teesta Urja Limited (TUL) by not following the proper tendering process for lease of furnished office accommodation and extended other contractual benefits resulting into a loss of revenue of Rs 17.42 crore.
“Tendering process adopted by APEC for leasing of furnished office accommodation was flawed. Though, Teesta Urja Limited did not participate in the tendering process, their bid was considered one week after opening of the bids,” the Comptroller and Auditor General (CAG) report said today.
A number of post contractual benefits were extended to TUL, which were highly unfavourable to APEC resulting in undue financial benefits to the company and loss of revenue of Rs 17.42 crore to APEC, it added.
The APEC received eight quotations by due date September 15, 2007. Out of them, three bidders were shortlisted that include E-Square International, The Institute of Planning and Management and JICA.
After opening of bids of other bidders on September 19, 2007, a bid of Rs 265 per square feet was received from Teesta Urja Limited on September 24.
The TUL did not participate in the tendering process, even then it was called for the further negotiations.
The first two bidders didn’t turn up for the negotiations and the JICA had quoted Rs 175 per square feet as their maximum price.
The APEC considered TUL as the highest bidder who agreed to take up the building at a rent of Rs 270 per square feet.
The TUL and APEC entered into a lease agreement for leasing of office premises for six years with effect from December 1, 2007 to November 30, 2913.
It was mentioned in the agreement that the rent would be enhanced by 15 per cent of the basic rent after the lapse of three years.
However, after a year, the TUL requested APEC to reduce the office rent from Rs 270 to Rs 150 per square feet. The APEC reduced the rate to Rs 190 per square feet with effect from April 1, 2009.
In February, 2009, TUL again requested for reduction in rate and the APEC slashed it to Rs 165 per square feet for a period of two years with effect from April 1, 2012 to March 31, 2014.
After expiry of the lease period on March 31, 2014, the APEC enhanced the lease rent from Rs 165 to Rs 225 square feet with effect from April 1, 2014 and the period was extended for another three years.
The audit observed that the entire tendering process was flawed since the beginning from the advertisement given in the newspapers to the final decision taken for giving the office premises on lease to TUL.
It found the information provided was incomplete and instead of raising the basic rent by 15 per cent, it reduced the lease rent.
The CAG report stated that the APEC failed to maintain the sanctity of the tendering process.
UNI ASH SB 2014
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Tags: #APEC gave undue benefits of Rs 17.42 cr to TUL: CAG
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