The Day Railways Procurement Became Decentralised

About 10 years ago, it was decided by the minds that be that a significant portion of Railways procurement would be decentralized to Railways zones and Production units. The catch for the zones in particular was that suppliers would continue to be approved centrally, primarily by Lucknow-based Research Design & Standards Organization (RDSO). What resulted? The pre-fixed suppliers formed cartels, fixed prices, and fleeced the Railways, as they still do. They go from one zone to another hiking prices in tender bids in every purchase, claiming inflation or market conditions or providing no explanation at all as they are the only game in town given restricted competition. When the same zone would buy the same Railways part a year later, the price they would face from the lowest bidder would sometimes show as much as a 100% increase in a year. Poor CAG, they reported this occurence as best as they could within their limitations in 2006. But, no one in media or parliament even bothered about the resultant losses worth thousands of crores. The theft still continues in Railways in this fashion. This is the CAG report that speaks of this over-pricing in its own characteristically muted way.
CAG - Decentralization of Railway Procurement 2006(5)

Who Knows About Railways Corruption?

In short, everyone concerned. But, such is the structure of our national administration that no one is prepared to do anything about it. The following two documents are a part of intense criticism levelled in 2005 by the CVC, pushing Railways to change its approval system, which causes immense revenue losses amidst tremendous corruption. In the second document here, a Board advisor rightly labels the approval system as irrational and absurd and something that causes losses which he underestimates to be worth 'hundreds of crores'. He even mentions CVC's knowledge of the overwhelming corruption in quality inspections. So much for Railways safety. The beauty is that 5 years have passed since these discussions. So entrenched are negative forces in the Railway Board and RDSO that the system remains the same to this day. No Minister, even those who have been better administrators and less corrupt than others have been able to break the obduracy of the bureaucratic nexus.CVC About Problems in Approval System

Advisor Board About Corruption in Procurement System

THE FIRE RETARDANT SCAM

When you step onto a Railway coach next time, remember that much of the grime laden upholstery and fittings that you see are worth their weight in gold, given the amount of money already spent on them over the years. The dirty floors you step on these days made some suppliers multi-millionaires. The latest form of this age-old racket is courtesy a letter issued under the mandate of ex-Member Mechanical R.K. Rao and ex-Finance Commissioner R. Sivadasan in February 2007. This letter gifted pre-fixed suppliers an approximate cost in some cases more than double the market rate for 7 items labeled 'fire-retardant'. The business has already run close to Rs. 1,500 crores in the last 3 years. Even after accounting for reasonable profits, the scam runs anywhere between Rs 500–1,000 crore. The items upgraded to allow for 100% over-pricing and huge kickbacks are flooring sheets, cushion fillings made from recron, seat covers, suspension washers, silent blocks, and brake gear bushes. This letter is an anomaly within Railways, as it shows that the estimates, usually never given like this, were not prepared independently through a costing analysis, but likely prepared by the suppliers themselves. This letter is itself an open admittance to the scam.

The Fire Retardant Railways Scam

THE ODOUR CONTROL SCAM

Aaloo had a Khansamah. Apart from cooking wonderful food, the Khansamah is believed to have charged 2 l's for arranging a meeting with the Potato. This is the route through which 3 suppliers, all agents of one multinational are believed to have got final approval for contracts to make a killing selling odour control systems for Railways toilets. For the past 5 years they have sold lakhs of smell dispensers as well as their fragrances to Railways at 10 times the cost at which these products are sold in London. In early 2010 Railways vigilance appear to have decided that enough money had been made by the bureaucrats and suppliers concerned. This is that document. When you visit a Railways toilet next time (try not to think of Jack and Gill) remember: the stink you generate, is big money - big & dirty.

Odour Control System Scam Document

Annual Corruption of Rs. 5,000 crore Statistics

This document, prepared by a serving officer shows statistics of the Railways procurement robbery. Even after underestimations, and not including the leaks taking place in the purchase of fuel, the figure arrived at is Rs 5,000 crore annually.
Stats - How Railways Loses Rs. 5,000 Crore Annually to Corruption

THE GREAT RAILWAYS PROCUREMENT ROBBERY

The Railways has been a cash-cow for decades. After the reign of C.K. Jaffer Sharief, it is not the Railway Ministers, but the top Railways Bureaucrats who have made the most money. Conservative estimates put the figure of revenue loss due to exorbitant over-pricing allowed to chosen corrupt suppliers at higher than Rs. 50,000 crores in the past decade. It is primarily at the the Railways Research & Standards Organization (RDSO), Lucknow, and in the Railway Board, New Delhi, that competition is closed, suppliers fixed, for suitcases of cash and brothels of prostitutes. This document (a letter + annexures), written by a senior serving procurement officer, provides a structural view into how this corruption takes place, and how, using conservative and educated estimates, a minimum of Rs. 5,000 crore leaks out to suppliers and for kickbacks to bureaucrats every year.

Railways Procurement Scam (Letter to Minister)

Railways Procurement Scam Annexure

PLUMBING STATEMENT

Every community collectively creates something unique. The Savara in Orissa, for example, have a philosophically complex and outright beautiful cultural understanding of death. It adorns their paintings detailing an up-turned tree leading to the underworld and speaks through their shamans, who are women. The Savaras never die, ultimately their souls take the form of butterflies (see here). The Surma & Mursi in the L'Omo Valley in Africa have the most exquisite concept of instant body art. The beauty lies in using natural make-up to show one's creativity in an instant. And almost as soon as it is born it dies (see here). Mainstream Indians also have a unique gift to the world: Corruption. It is our art-form; it is our excrement; it is our cage. Everything we touch we smear and trap in our gift. It is grease that springs from our inequalities, strengthens them, and increases them. It is the most powerful - bureacrats-politicians-corporate honchos - who are the most corrupt; they make sure we remain a leaking nation. This space is dedicated to exposing those leaks, by itself leaking documents that make us better understand our own excremental art form, in all its pervasiveness, its uniqueness, its destructiveness. It is an initiative to plumb the depths of our ocean of corruption. This space is also dedicated to documents that show how our corrupt and unequal system is destroying older systems of knowledge, of freedom and equality and beauty that still exist in some pockets of our myriad tribal and nomadic communities.