TODAY IN PRESS CLUB IN SECTOR-27, Dr.KamalSoi,Chairman- Raahat- The Safe Community Foundation (Mobile : 9815033333, Email: kamaljsoi@gmail.com) briefed the Media about the captioned matter:

DL/RC Contract Scam is BIG –Mere Cancellation of Contract is not Enough – Please Order Vigilance/CBI Enquiry to Dig Out the Truth- DrSoi .

TERMINATION OF ILLEGAL DL/RC CONTRACT BY GOVERNMENT OF PUNJAB & NON RECOVERY OF PUBLIC MONEY CHARGED EXORBITANTLY FOR 5 YEARS IN THE STATE FROM THE CONTRACTING COMPANY IN CONNIVANCE WITH THE OFFICIALS

Chandigarh,21.09.18-Reference to the DLRC Project being undertaken in the State of Punjab on (Build, Own, Operate & Transfer) BOOT basis wherein termination notice was served on the contractor namely, M/s Smart Chip Ltd. (as Consortium Partner) vide letter no. PSTS/105429-31 dated 01/06/2018.

There have been petitions pending in the Hon’ble High Court of Punjab and Haryana pertaining to the implementation of the DLRC and ADTT projects in the State of Punjab. In one of the petitions the Court ordered the State to make payments to the tune of Rs. 10 crore in favour of M/s Smart chip Ltd., the State thereby agreed to pay M/s Smart Chip Ltd. an amount calculated by taking the cost of each card to be Rs. 45/-.

The State informed the Court that it was bound to make payment only to the tune of Rs. 8 crore and not Rs. 10 crore. To this, the Court refused to interfere holding that when the parties inter-se have agreed to a sum then the Court would not intervene and ordered the State to make the payments accordingly.

The rate of Rs. 45/- according to which the State reached an estimation of Rs. 8 crores does not hold good on being compared with the rates in other States. That the rate of Rs. 45/- in other States is inclusive of the profit and also the BOOT rate. That in the instant project, the company during the implementation of the DLRC Project has already recovered the capital component of the project during the first five years of the project. In addition to this, there has also already been a shift to VAHAN 4.0 so again there is no scope of incurring any additional expenditure. Therefore, the rate of Rs. 45/- is still excessive and the fact of government agreeing to such rate is astonishing for it manifests that the government is instead supporting loot of public money.

In the State of Punjab, especially with respect to this particular project, the capital component has already been recovered by the contractor and the only work that is left with the contractor is that of operation and management which certainly doesn’t require incurring of additional money. Thus, this rate of Rs. 45/- that too at this stage of project when everything has been done, and all that is left is the operational and management aspect of the project is certainly arbitrarily high.

The contractor was granted an extension by a letter no. PSTS/18749 dated 01/06/2015 for the next five years whereafter the contractor had zero cost over the initial investment and therefore, the rates being charged from the consumers should have been lower than the rates in the original contract.

Furthermore, adaptation of VAHAN 4.0 as designed, developed and maintained by NIC shrunk the scope of work for the BOOT operator as it eliminated the responsibility of using and maintaining the servers of local sites. Therefore, there is absolute no requirement or scope of the contractor incurring any further amount into this project and therefore is not entitled to charge such exorbitant amount for the project.

Therefore, the State to agree to pay the amount of Rs. 8 crores to the Contractor is rather an act of looting public money and the State ought not to have agreed to this rate. Bestowing this money to the contractor is highly irrational and certainly opposed to public interest especially in light of the fact that a larger issue is pending before the Hon’ble Court and there exists no reasonable basis to make such interim payments to the contractor.

Background :

An Agreement dated 27/09/2011 was entered into by the Government of Punjab with a consortium led by one M/s Smart Chip Pvt Ltd., whereby the letter was awarded the Contract for introducing E-Governance in Transport Offices of the State and for the issuance of Smart Card based Driving Licenses and Motor Vehicle Registration Certificates. The said Contract initially provided for a tenure of 5 years.

Under the Contract dated 27.09.2011, M/s Smart Chip charges an abnormally high price of Rs. 65 for DLs and Rs. 136.5 for RCs, while NICSI, a Central Government Company, charges a sum of only Rs. 45 for both DLs and RCs in the States in which the DL/RC project is carried out under its aegis.

The company M/s Smart Chip Pvt. Ltd., though incorporated in India, is a subsidiary to a Foreign company M/s Morpho whose share holding is to the tune of 97%. It is therefore not just the steep prices that were charged that’s questionable but also the fact that a Company with such an overpowering foreign hand could have been allowed to undertake and implement such an important project that requires constant generation and maintenance of sensitive data pertaining to motor vehicles and driving license in a state that borders the enemy territory of Pakistan.

In March, 2015, Department of Transport, Government of Punjab, issued an NIT for the setting up of Automated Driving Test Tracks (ADTT) Project at 32 locations of the State. In the bidding process that ensued, there was a tie between the financial bids of one M/s Rosmerta and M/s Smart Chip. However, after the draw of lots, M/s Rosmerta was declared as the lowest bidder.

Thereafter, Department of Transport, Government of Punjab, suspiciously cancelled the bid of M/s Rosmerta and annulled the bidding process altogether, citing frivolous reasons.

Subsequently, 01.06.2015, about one year before the expiry of the DL/RC Contract awarded to the consortium led by M/s Smart Chip Pvt. Ltd, the Transport Department clandestinely issued a letter to M/s Smart Chip Pvt. Ltd. whereby the DL/RC Contract under which the said company was exploiting the public was extended for a period of five full years from the date of its expiry i.e., 27.09.2016, and all civil works associated with the establishment of ADTT Centers was assigned to M/s Smart Chip Pvt Ltd. to be executed as a CSR project.

Prayer :

Please recover money Overcharged by the Contracting Company

Therefore, the State to agree to pay the amount of Rs. 8 crores to the Contractor is rather an act of looting public money and the State ought not to have agreed to this rate. Bestowing this money to the contractor is highly irrational and certainly opposed to public interest especially in light of the fact that a larger issue is pending before the Hon’ble Court and there exists no reasonable basis to make such interim payments to the contractor.

VEHICLE REGISTRATION CERTIFICATES:

Party

State

Rate

Status

Smart Chip

Punjab

136.35

Extendedon01.06.2015

SMARTCHIP

Chattisgarh

74.70

Existing

NICSI

Uttar Pradesh

55.00

do

NICSI

Rajasthan

55.00

do

DRIVING LICENSES

Party

State

Rates

Smart Chip

Punjab

65/-

Extended on 01.06.2015

SMARTCHIP

Gujarat

49.59

30.06.2015

NICSI

Uttar Pradesh

44.48

4thSept, 2012

NICSI

Rajasthan

44.48

12thJuly 2013.

For more information, please contact:

Dr.KamalSoi,

Top International Road Safety Expert

Chairman- Raahat- The Safe Community Foundation

Mobile : 9815033333, Email: kamaljsoi@gmail.com