Kolkata: Efforts by the Bihar government to improve its performance in the National Rural Employment Guarantee Scheme (NREGS) are stuck after it awarded a Rs281 crore contract to create an electronic platform in the state to a company with about Rs16 crore in annual revenues.
The company, the Smaarftech Inc. unit of Nashik-based Anil Printers Ltd, concedes it hasn’t handled a project of this size and is also saying it won’t sign the master services agreement (MSA) unless changes were made in it, even as it claims fieldwork is already under way.
Guaranteed work: An NREGS project in Uttar Pradesh. Neighbouring Bihar has been pilloried by the Union government for providing 22 days of employment per household compared with a national average of 38. (Photo: Harikrishna Katragadda / Mint)
“We feel the MSA is highly skewed in favour of the state government in its present form. We are in talks with the Bihar government to make some changes in the MSA,” says Akash Agarwal, a director of Anil Printers.
Smaarftech, which describes itself on its website as “the country’s first high volume smart card and radio frequency identification (RFID) label manufacturing company”, beat other bidders, including Wipro Ltd, Srei Infrastructure Finance Ltd and 3i Infotech Ltd, to win the contract to create a database of jobs available in Bihar, issue smart cards to workers and develop a real-time management information system to monitor employment, attendance, asset creation and payment of wages under NREGS.
Bihar, which was pilloried by the Union government for providing 22 days of employment per household under NREGS last year compared with a national average of 38, wants to make the workings of the scheme more transparent by e-enabling it, according to S.M. Raju, additional secretary in the rural development department of Bihar.
The bidding for the project ended earlier this year and the government issued a so-called letter of intent to Smaarftech about five months ago.
Though it has considerable experience of issuing smart cards and implementing e- governance projects, Smaarftech, which bid for the contract jointly with South Africa’s Face Technologies (Pty) Ltd, agrees it has never handled a project of this size.
Still, “there’s always a first time and we will do it,” says Agarwal. The “government has asked banks to ensure credit is not an issue to initiatives in the NREGS domain. Face —Smaarftech’s South African partner—is a veteran in such schemes and they will more than make up for our lack of experience.”
Nashik-based Anil Printers, which reported a net profit of Rs2.72 crore in 2007-08, emerged as the lowest bidder, or L1 in technical parlance, with a bid of Rs281 crore, whereas its nearest competitor, the Srei-Wipro combine, quoted Rs451 crore.
“There won’t be any dilution of standards and we are sure we will deliver even at these rates,” says Agarwal.
But, some experts are sceptical. According to Shankara Prasad, an e-governance expert and chief executive officer of Bangalore-based Inkroma e-business Solutions Pvt. Ltd, the vendor for this project might well have to shell out more than Rs200 crore on hardware, such as smart cards and readers, alone.
More than 25 million smart cards are to be issued, and these should last at least 10 years. “Add to this the cost of developing the software, buying the operating systems and so on. But, it’s not impossible to pick up cards by the kilogram in places such as Hong Kong,” says Prasad.
That apart, a project which is likely going to need a huge workforce—1,294 villages will have to be covered in Patna district alone—will be handled by a company that has a staff strength of 50. “We will outsource the work,” says Agarwal.
“It appears that in selecting the vendor for this project, Bihar was guided entirely by price bids, whereas the Central Vigilance Commission says techno-economic feasibility of each bid should also be considered before awarding the contract,” says another e-governance expert, who insisted on not being named.
Bihar’s rural development department had mandated the state’s information technology undertaking Bihar State Electronics Development Corp. —better known by the acronym Beltron—to select a vendor for the project.
Alok Chaturvedi, the principal secretary of Bihar information technology department and Beltron’s managing director, refused to comment on selection of the vendor. When asked about the project, he insisted on a questionnaire being sent, but the one emailed to him more than two weeks ago wasn’t answered.
The key problem now facing the project is lack of connectivity across the state. Beltron was supposed to connect all 38 districts and 534 blocks of the state with a 2 megabytes per second (Mbps) line under a project jointly undertaken with the Union government.
But the Bihar Statewide Network is far from being ready.
“We had planned to piggyback on this (network),” says Agarwal, revealing his concern that it might be impossible to implement the project without the 2Mbps connectivity.
Though the project has hit a stumbling block even before it has started, Bihar’s rural development department is confident that the project will be implemented without much delay.
“I am sure all hiccups, if there are any, will be overcome and we will be able to bring transparency into the working of the NREGS in Bihar,” says the rural development department’s Raju.
“Eventually, it’ll change the lives of crores of poor people of Bihar.”