Review tender issuing methodology to prevent loss to State exchequer: Kerala HC to Chief Secretary

The Kerala High Court on Thursday said the Chief Minister should review the methodology by which tenders are issued by the State government to eliminate all possible loopholes that could lead to loss in public finances.

A bench comprising Chief Justice Nitin Jamdar and Justice Syam Kumar VM issued the order while considering a public interest litigation (PIL) alleging that tenders awarded by the Irrigation department for cleaning of the state’s reservoirs had resulted in significant losses to public exchequer.

The petitioner had alleged in his PIL that the rate offered in the tenders held in 2024 for draining three dams in Palakkad district was much lower than the local market rate and would result in a loss of over ₹ 15 crore to the State exchequer.

Petitioner Chief Minister Shaji, a resident of Palakkad, claimed that he first complained about the issue to the Chief Secretary, but when there was no response, he filed a PIL.

The irrigation department had argued in court that the tender amount was below the local market rate due to deduction of mandatory screening costs.

The Finance department then told the court that there were irregularities in awarding the tender and the tender could be canceled and fresh tenders invited by appropriate amendment in the standard operating procedures (SOP) to avoid any possible loss.

The bench observed that the contract was awarded below the local market rate, which was “effectively reduced by the application of qualifying fee cuts.”

“No specific guidelines or policies have been placed before us on how elimination charges can be deducted. Giving the authority uncontrolled discretionary powers could result in a significant loss to public finances,” the bench said.

He further stated that the instructions given by him from time to time to record relevant details were not fully complied with by the Irrigation department and Water Resources department.

“We are of the view that the Secretary-General’s intervention is necessary not only to examine this specific tender, but also to review the methodology by which tenders are issued,” the statement said.

The court ordered that the files pertaining to the trial, including all the documents and affidavits filed in the present petition, be submitted before the Chief Secretary, Government of Kerala.

The Chief Secretary was directed to take necessary decisions regarding the issues raised by the Ministry of Finance regarding tenders for cleaning of dams.

The court said the Chief Secretary “will also determine whether any amendments or amendments are required in the SOP for the issuance of tenders, particularly in relation to the concept of qualifying fees and other deductions”.

The Board said, “The file will be presented to the Secretary General within two weeks, and he will take the necessary steps within the next four weeks.”