Taking a cue from Uttar Pradesh and Uttrakhand, Haryana and Himachal Pradesh governments are considering strong action against unscrupulous firms that are trying to gain entry in the states by adopting unfair means.
The state governments are also proposing to undertake factory audit at the manufacturing facilities of all new companies who have no prior manufacturing experience, intend to supply pipes for their various drinking water supply schemes.
The move follows a representation from the All-India Foundry and Steel Manufacturers Association which urged state governments to take action against unscrupulous firms. ?It said that prior to enlisting such firms, the credentials of such firms should be verified and their enlistment be done by following a proper vendor approval system, which was already in force in Gujarat, Maharashtra, Uttar Pradesh, Uttarakhand, Kerala and Tamil Nadu?.
The body also observed that revenue intelligence tax authorities had issued a notice to one such company, Rashmi Cements, for tax evasion worth crores. Also the Association has taken a serious note of the group company, Rashmi Metaliks for allegedly fudging documents to rake in more than R500 crore profit. The Central Excise Department and Railways according to the Association are investigating the matter and a notice for recovery of R660 crore has also been served by the Railways . Interestingly the same firm had intended to supply ductile iron pipes to Haryana and Himachal Pradesh governments and had quoted lowest rates to clinch the deals.
Enquiries reveal that the Haryana government had rejected the offer of this company after finding that ?the said firm failed to meet the eligibility conditions?. The firm had also taken part in tenders invited by the Himachal Pradesh government along with five other firms on July 26 this year but it was not shortlisted to supply water supply pipes to the government.
In case of Haryana, the minutes of technical committee confirmed that “Rashmi Metaliks does not meet eiligibility conditions?. Further enquiries reveal that the same firm had been denied registration as an approved vendor of Gujarat Water Supply and Sewerage Board after a third party inspection by a PSU_ Certification Engineers International Limited, a subsidiary of EIL.
State government officials told FE that ?there is mushrooming of entrepreneurs who had no background of foundry for centrifugal castings venturing into DI spun pipes and getting ISI certification had become easy. Merely having the ISI mark does not mean that a manufacturer is fully equipped to produce quality pipes.?
The Association has urged the state governments to take measures such as credential checks of the new entrants and a thorough factory audit to check the manufacturing capabilities prior to allowing purchase of pipes for their various water supply projects.