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By:

Quaid Najmi

4 January 2025 at 3:26:24 pm

Rs 1,136-cr digitisation contract under scanner

Disclosures on pricing and volumes in a five-year modernisation project have raised questions about costs and oversight. Mumbai: A project described as a routine “digital transformation” of Maharashtra’s registration machinery has raised eyebrows after regulatory disclosures indicated that its billing could reach a staggering Rs 1,136 crores over five years. The Inspector General of Registration & Controller of Stamps (IGR), which comes under the state’s revenue department, has issued a...

Rs 1,136-cr digitisation contract under scanner

Disclosures on pricing and volumes in a five-year modernisation project have raised questions about costs and oversight. Mumbai: A project described as a routine “digital transformation” of Maharashtra’s registration machinery has raised eyebrows after regulatory disclosures indicated that its billing could reach a staggering Rs 1,136 crores over five years. The Inspector General of Registration & Controller of Stamps (IGR), which comes under the state’s revenue department, has issued a Letter of Intent to a consortium led by the Navratna public-sector firm RailTel Corporation of India Ltd., alongside the Nashik-based infrastructure company Ashoka Buildcon Ltd. The consortium has been appointed as managed service provider for a comprehensive modernisation of IGR offices across the state. The five-year turnkey contract covers end-to-end operation and maintenance of IT systems, networks, cloud services and application infrastructure, as well as the scanning of official documents. Execution is scheduled to run until March 19, 2032. It is the financial structure, rather than the scope, that has prompted unease. The approved rate for scanning registered documents is Rs 24.75 per page. Industry sources say prevailing market prices for bulk document scanning typically range between Rs 3 and Rs 6 per page - roughly a quarter of the contracted rate. Costly Contract In identical filings with the NSE and BSE last week, the consortium partners referred to historical data in the request for proposals showing that an average of 9.18 crores pages were scanned annually over the past five years. At the agreed rate, this would translate into payments of around Rs 227 crores a year, taking the projected total to about Rs 1,136 crores over five years. The contract does not specify a ceiling, and payouts are expected to vary with actual volumes. Critics and watchdogs argue that the absence of a fixed cap, combined with a per-page charge well above market levels, leaves room for inflated bills or padded volumes. Prafful Sarda, a Pune-based social worker, questioned the rationale for outsourcing the task. Even if Rs 10 per page were taken as a generous benchmark using advanced machines, Sarda asked, “what is the need to award the scanning contract at a massive cost to outsiders when the state government can itself do it at a much lower cost.” He also raised doubts about the composition of the consortium. “What is the expertise in IT-related work of Ashoka Buildcon Ltd., which is a road infra developer. Moreover, scanning is an easy process – a 100-page file can be scanned and uploaded in barely five minutes. Massive discounts are offered for bulk works. Are the IGR staffers so over-burdened that scanning work has to be outsourced at exorbitant public cost?” Sarda said. According to him, contractors would gain access to sensitive land and property records, as well as information on real-estate preferences and market trends, potentially giving them an early advantage in identifying future development opportunities. He compared the case to what he described as the IRCTC spending Rs 2,619 crores on website upkeep and maintenance over three years, along with Rs 1,950 crores in UPI fees, figures cited in an RTI reply and reported earlier by this newspaper. When contacted, a spokesperson for Ashoka Buildcon said the company was a minority partner in the RailTel-led consortium and that “hence, we are not allowed to speak in the matter.” The spokesperson also declined to comment on when the five-year contract would commence, noting only that the stipulated completion date is March 2032.

Lateral upgrade to ailing annihilation

Updated: Oct 21, 2024

Lateral upgrade to ailing annihilation

Being the first person from the private sector to be appointed as chairperson of Securities and Exchange Board of India (SEBI) as part of the government’s lateral initiative, Madhabi Puri Buch also holds the honour of being the first woman to hold the top post as capital market regulator.

But the laurels that the former private sector banker enjoyed in her earlier stint with ICICI Bank, was marred with allegations that she and her husband were having a stake in offshore entities, which were used to artificially inflate shares of Adani group companies.

Terming the allegation as `character assassination, Buch clarified that all disclosures have already been furnished and the fund in question did not invest in any securities involving the Adani group.

When it rains, it pours. This allegation was subsequently followed by Congress Party allegation that Buch had received salary and post-retirement benefits from ICICI Bank after she quit the private sector bank.

In its clarification to the stock exchanges, ICICI Bank asserted that the payments made to Buch were purely retirement benefits after her exit from the bank and they were neither salary nor employee stock options.

Prior to these allegations, Buch tenure at SEBI was all about bringing in quick reforms on operational issues by changing the format of consultation paper to bring in larger responses digitally. Being data savvy, the rationale of her decisions were democratic based on big data analysis derived from the responses received to the consultation papers.

Further she bifurcated the duties of the SEBI staff between operations and enforcement, which were done by the same persons earlier. Having worked for the private sector in the capital market domain space, Buch had a better understanding of the subject compared to officers from the administrative service in the past that reflected even in her orders as a whole-time director at SEBI before becoming the chairperson. As a whole time director at SEBI, her orders on adjudication issues were more directional to the capital market space, according to experts in the compliance space. She was also quick to revamp the old provisions of the 90s at SEBI.

Being tech and data savvy, Buch enhanced regulatory surveillance and detection of market manipulation, insider trading and fraud while also emphasizing on strengthening corporate governance by introducing stricter rules for independent directors and enhancing disclosures for related-party transactions.

To put in perspective, the annual report of the capital market regulator in the just concluded financial year revealed that the number of investigations related to insider trading jumped to 175 in 2023-24 from 85 in the preceding year while probes related to front running jumped over three times to 83 from 24 in the preceding year.

Transparency in mutual funds by implementing measures to protect retail investors along with tightening norms for initial public offers, particularly in the SME platforms were some of her other positive initiatives including confirmation of denial of any market rumours within 24 hours for the top 100 listed companies which will be extended to top 250 companies from December 1. However increased transparency and compliance with tightening regulations led to increased operational costs for the market participants and hence faced resistance from certain quarters. Born in 1966, Buch completed her primary education in Mumbai and graduated with specialization in Mathematics from Delhi and later obtained a management degree from Indian Institute of Management, Ahmedabad. In between, she got engaged to Dhawal Buch, a director at a consumer goods multinational at the age of eighteen and got married at the age of 21.

Besides ICICI Bank, Buch also worked as a lecturer at a college in England, worked at Greater Pacific Capital in Singapore and ICICI Securities as its CEO. She also worked as executive director on several private sector companies and as a consultant for New Development Bank (Brics Bank).

What now remains to be seen, is whether Buch, who survived the 26/11 terror attack when she along with her husband, was attending a meeting at Taj, be able to overcome the current ordeal. Keeping fingers crossed for the times to come.

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