NTPC frames new policy to weed out unprofessional vendors

Apr 20 2014, 15:04 IST
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NTPC ban would be deemed to have been automatically revoked on the expiry of the specified period. Reuters NTPC ban would be deemed to have been automatically revoked on the expiry of the specified period. Reuters
SummaryNTPC ban would be deemed to have been automatically revoked on the expiry of the specified period.

Country's largest power producer NTPC, which does Rs 50,000-crore worth public procurements every year, has put in place a detailed policy on banning business dealings involving unprofessional and frivolous vendors.

The new policy, introduced last month, comes against the backdrop of instances of projects getting adversely impacted due to unprofessional approach of some vendors.

The state-run company, which contributes nearly 30 per cent of the country's overall electricity generation, has now put in place a detailed set of guidelines for withholding as well as banning business dealings that involve non-performing and frivolous vendors.

Under the 'Policy & Procedure for Banning of Business Dealings', an agency could be banned on various grounds, including instances where it "employs a public servant dismissed/removed or employs a person convicted for an offence involving corruption or abatement of such offences".

Besides, an agency could face ban if its proprietor has been guilty of malpractices such as bribery, corruption and fraud.

Among others, NTPC policy states that "established litigant nature of the agency to derive undue benefit" would be a ground for imposing ban.

"... it is necessary that NTPC is able to send a serious signal to such non-performing and frivolous vendors that they cannot make NTPC hostage due to their poor performance and unprofessional bids," NTPC Chairman and Managing Director Arup Roy Choudhury said about the new policy. Meanwhile, the power major has also mentioned that an entity could be barred on account of security consideration, "including questions of loyalty of the agency to the state, so warrants".

"An order of banning passed on account of doubtful loyalty or security consideration shall continue to remain in force until it is specifically revoked," as per the policy.

In all other cases, the ban would be deemed to have been automatically revoked on the expiry of the specified period.

"The provisions of this policy will be effective on investigations conducted or misconduct/irregularities noticed on the part of any agency in all contracts awarded on or after the date of implementation of this policy and in the contracts

under execution or contracts not yet closed, on the date of

the implementation of this policy," the company said.

According to NTPC's Chief Vigilance Officer M R P Rao, the policy would act as a deterrent against fraud, corruption and unethical practices, and non-performance by the agencies. In 2013 alone, NTPC has banned or suspended business dealings with about seven entities, according to its

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