Cloud over debt tribunal e-link

Govt considers whether to allow re-bidding, after TCS asks for payment revision due to rupee depreciation; audit objections apprehended either way

Financial Services Secretary Rajiv Takru has questioned his predecessor D K Mittal's decision to select Tata Consultancy Services (TCS) for implementing the ambitious Rs 200-crore project to automate and electronically link all Debt Recovery Tribunals (DRTs).

The project is in a limbo at a time when the country is faced with a problem of mounting bad loans and might even be shelved altogether.

TCS, the country's largest software services company, had emerged as the lowest bidder in the tender floated by the Department of Financial Services (DFS) in 2012-13, in which smaller rivals Wipro and Tech Mahindra were also shortlisted. While several large technology companies had shown interest in the project initially, only these three gave financial bids.

According to people familiar with the development, TCS has gone back to the department to raise the price for the project, as the earlier cost quoted by it had significantly changed due to the rupee's steep depreciation against the dollar. The department under Takru, who took over from Mittal on January 31, feels if the project is re-bid, then more companies will be able to participate and DFS could negotiate an even lower price. The department also feels the request for proposal should be multi-vendor compliant; when a large number of entitties stayed away from the project, it meant there was something wrong with the tender specifications.

DRTs help financial institutions in expeditious adjudication and recovery of their bad debt. The project will allow petitioners to file their cases online. Hearing of cases, issue of notices, orders and e-auctions would also happen online. When asked, TCS declined to comment on the matter. "The project might now be re-tendered or be completely shelved," an official, who did not wish to be identified, told Business Standard.

Takru said the matter was under examination and a decision would be taken soon. Mittal said there was nothing wrong with the tender. "We did everything in a transparent manner. This (e-linking of DRTs) is a must to improve the efficiency of the banking sector. (But) there are some vested interests (behind delay in the project). However, if the government feels there were some lacunae, then they should bid it fast and close it soon," he said.

An official at a large information technology company, which had shown interest in the project but did not bid, said some of the tender criteria such as maintaining 36 or 50-generator sets were not very conducive. "It is not an IT company's job to fill fuel in a genset," the official said, as an example to explain why his firm did not participate in the project.

A fresh tender could mean significant time again gone in finalising the vendor for a project which had taken nearly 18 months to reach this stage. Lobbies of lawyers, recovery agents and some bank officials are reportedly not in favour of computerisation of DRTs.

While Takru has argued that a fresh bidding could get a lower price of Rs 100-120 crore, there is a different view in the ministry, that it would rather lead to a higher cost due to the rupee depreciation and could also delay the project by at least six months, and be shelved ultimately, if there is an audit objection.

There are 32 DRTs in the country and five Debt Recovery Appellate Tribunals.