Editorial: Getting CAG on board

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Published: January 26, 2015 3:54:07 AM

Good idea to have ex-CAG as advisor to Railways

Given how public sector organisations tend to be frightened to take decisions due to the fear of the CAG, CVC and CBI—in that order—the Railways has done well to get former Comptroller and Auditor General Vinod Rai as an honorary advisor. The former CAG’s job, it appears, is to advise the Railways on how to usher transparency in all processes, including procurement. The speed of decision-making is the critical difference between private and public sector organisations, and Rai’s job will be to help the Railways take quick, and correct, decisions without violating any of the guidelines applicable to public sector organisations. In the past, for instance, the Railways cancelled bids for locomotive manufacturing on the grounds that there was just a single bid and, therefore, unresponsive—the former CAG could lay down rules under which such bidding may be allowed. More important, however, would be the rules/procedures that need to be put in place to ensure the Railways don’t fall victim to what is called L1-itis, or the need to place orders with vendors who happen to submit the lowest financial bid.

In the past, the former CAG has been at pains to explain that, as long as the tender process is fair and transparent, there is no problem. Greater weights, for instance, can be provided for technical excellence, thereby ensuring only firms with the best track-record get selected. Similar procedures can be designed to ensure that there is enough flexibility to change contracts in the middle of a project without invoking the wrath of the CAG, CVC or CBI—in most large contracts, several unforeseen events take place that require the application of discretion on the part of those supervising them; discretion is something the rules, and the way they have been interpreted over the years, frown upon. One way to do this, perhaps, could be to allow changes of up to a certain proportion of the original cost to be okayed by officials at a certain level; those of a higher amount could be referred to a larger panel/board. Indeed, once the arrangement has been put in place and tested, it would be a good idea to extend this to other public sector organisations since the problems that plague them when it comes to decision-making are broadly similar.

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