‘Proof’ of TN Ex-Chief Secretary Rama Rao’s Corruption Emerges

A Tamil Nadu activist released documents as ‘proof’ of the corruption and has filed a complaint with the CBI.

Former Tamil Nadu chief secretary P Rama Mohana Rao. (Photo Courtesy: The News Minute)

Weeks after the Income Tax department carried out raids at the properties and office belonging to former Chief Secretary of Tamil Nadu government Rama Mohana Rao, Arappor Iyakkam, a Chennai-based activist group, has filed a complaint with the CBI alleging that the bureaucrat misused his powers to pressurise the Tamil Nadu Medical Services Commission into awarding a tender worth Rs 520 crore to a company bearing links with his son.

Releasing documents that purportedly show corruption on part of the top bureaucrat, Arappor Iyakkam requested CBI to file a case under the Prevention of Corruption Act against Rao and arrest him.  The group also called for a probe into the role of Health Secretary J Radhakrishnan and Health Minister C Vijayabhaskar into the tender process. It also called for the tender to be called off and fresh tenders to be floated.

Also Read: Did Ex-TN Chief Secy Use Position to Help Firms Connected to Son?

According to Arappor Iyakkam, the Tamil Nadu Medical Services Commission (TNMSC) had floated a tender on 8 January 2016 to outsource housekeeping and security services for a total of 37 government hospitals and 20 medical colleges that comes under the control of Directorate of Medical Education. As per the original tender:

The bidder must be registered under Indian Companies Act 1956; the bidder must have experience of servicing at least 1 lakh sq ft in any of the last five years; the bidder must have had a turnover of at least Rs 10 crore in any of the previous three years and many more.

The original tender contract was also for a period of two years, noted Arappor Iyakkam.

While the last date of submission for bidders was 28 January 2016, a subsequent notification extended the deadline to 5 February 2016. Based on the original tender, Padmavathi Hospitality and Facilities Management was ineligible to compete, given that it was not registered under the Indian Companies Act.

Padmavathi Hospitality, the group alleges, is Rao’s benami company with its Managing Director Bhaskar Naidu also a director in another concern called Swan Facilities Services, whose owner is Vivek Papisetty, Rao’s son.

In its complaint, Arappor Iyakkam states that a day before the 5 February deadline, Rama Mohana Rao, who was the then Secretary to Chief Minister, misused his position so as to change the eligibility criteria of the tender and also extended a deadline further to 16 February.

“With absolutely no necessity, a corrigendum is issued and amendments were made to the eligibility criteria. One of the main change that was made to pave way for the entry of the successful bidder was to change the type of firms that could participate in the bid. Instead of only Public/Private Ltd, the amendment included partnership and proprietorship concerns as well to compete (Evidence Attached – Reference 5). This paved the way for the entry of the successful bidder Padmavathi Hospitality and Facility Management Services to become eligible for bidding,” the complaint says.

The complaint also alleges that more amendments were made so as to narrow the eligibility criteria, proving the conspiracy. The activist group notes:

The 1 lakh floor space experience in any of the last five years was increased to 10 lakhs. The turnover of Rs 10 crore requirement in any of the last three years was increased to Rs 20 crores. The contract period from being two years was increased to three years with a clause that it could be extended to the fourth year as well based on mutual consent (Evidence Attached – Reference 5). All these criteria have been changed to favour one Partnership company Padmavathi Hospitality and Facility Management Services.

Changes to the tender process, Aroppar Iyakkam alleges, broke Tamil Nadu Tender Transparency Rules and may have breached guidelines set by the Central Vigilance Commission on advertising changes to pre-qualification criteria.

While six companies were shortlisted for the tender, Padmavathi Hospital and Facility Management Services was the lowest bidder. A contract of around Rs 130 crore was signed for the first year between Padmavathi Hospital and Facility Management and the Directorate of Medical Education. Based on this contract, Arappor Iyakkam calculated that Padmavathi Hospital and Facility Management was awarded a four-year contract worth Rs 520 crore.

(Photo Courtesy: The News Minute)

(Photo Courtesy: The News Minute)

The group alleged that evidence shows that P Srinivasa Rao, the brother of Rama Mohana Rao, was one of the witnesses who signed the contract, thus proving the conspiracy.

(Photo Courtesy: The News Minute)

In the wee hours of 20 December, officials of the I-T department raided Rao’s Anna Nagar residence, 13 other properties owned by him and his relatives, and his office at the Tamil Nadu Secretariat. According to reports, officials seized Rs 30 lakh in new currency, 5kg gold and documents with details of undisclosed assets worth Rs 5 crore.

A day after the raids, Rao was dropped as Chief Secretary of the state and was replaced by Girija Vaidyanathan.

Following the I-T raids, Rao denied that his son Vivek had got any government contracts. Alleging that his life is in danger, Rao said, "I may be a big hurdle to many who think I may be a hardcore man, who abides by Jayalalithaa."