CAG flags Rs 1.57cr loss due to undue benefit to pvt firm

Jaipur: Rajasthan State Warehousing Corporation (RSWC) came under scrutiny after an audit report released last week revealed that it extended undue benefit of Rs 1.57 crore to a private firm by opting for a less favourable revenue-sharing arrangement, despite having access to more beneficial contracts.In April–May 2018, facing urgent demand for storage of wheat, gram, and mustard, RSWC acquired additional warehouses. Shree Shubham Logistics Ltd offered facilities at 33 locations with a capacity of 3.76 lakh MT at standard rent, under a 70:30 revenue-sharing arrangement.
Around the same time, Star Agri Warehousing and Collateral Management Ltd offered 1.16 lakh MT capacity at 16 locations, but under a less favourable 58:42 revenue-sharing ratio.Audit scrutiny revealed that RSWC chose Star Agri's warehouses at 10 locations, leaving 88,823 MT of Shree Shubham's more beneficial capacity unutilised. This decision resulted in a loss of Rs 1.57 crore in storage income and a corresponding undue benefit to Star Agri.The state govt defended the move, citing Section 31(1)(b) of the Rajasthan Transparency in Public Procurement Act, 2012, which allows single-source procurement in emergencies. Officials argued that Shree Shubham failed to provide facilities at several locations. However, auditors found no documentary evidence of such denial or penal action against Shree Shubham.The audit further noted that RSWC had sufficient time to initiate competitive bidding, as tenders for the subsequent Kharif season were finalised within 7 days at a more favourable 74:26 ratio.It concluded that revenue-sharing formulas must be standardised and procurement conducted transparently to prevent distress arrangements and safeguard public revenue.The findings raise serious questions about procurement practices in RSWC and highlight the need for stricter adherence to transparency norms in public sector contracts.