TN NGO alleges Rs 992-cr corruption in tenders for transport of foodgrains

Arappor Iyakkam, an anti-corruption NGO based in Tamil Nadu, has alleged corruption of Rs 992 crore in the allotment of tenders for the transport and movement of paddy and other foodgrains in all the 38 districts of the state.

The tender allotments favoured a select set of firms linked to TS Kumarasamy of Christy Friedgram Group, said the NGO.

Alleging that officials from the Tamil Nadu Civil Supplies Corporation (TNCSC) and the Food Corporation of India (FCI) are involved in the corruption, Jayaram Venkatesan, convenor of Arappor Iyakkam, said the tenders were awarded at a cost 107 per cent more than the market price to Kandasamy & Co, Muruga Enterprises and Karthikeya Enterprises.

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Complaint sent to CBI, ED

The NGO has sent complaints to multiple investigative agencies, including the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED), the Directorate of Vigilance and Anti-Corruption (DVAC), and the Director General of Income Tax, requesting probes into the violations.

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Arappor alleged that prequalification criteria were set such that all the experienced transport contractors got excluded while inexperienced ones got included. Only benami firms of Kumaraswamy, namely Karthikeya Enterprises, Kandasamy & Co and Muruga Enterprises, were technically qualified in all the districts, said the NGO. Excluding the other players led to anticompetitive and restrictive trade behaviour, it added.

The NGO has also accused violations of the timeline of tender validity, a security deposit clause to favour a select set of companies, and conspiracy/collusion leading to corruption among the public servants of TNCSC and FCI.

The TNCSC is engaged in the procurement, storage and distribution of essential commodities under the Public Distribution System.

What complaint stated

TNCSC engages private lorries to transport paddy and other foodgrains from direct purchase centres to mills and godowns through a tender process.

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The cost of transport work for civil supplies in each region was Rs 200-220 per tonne for the first 5 km slab until 2020. However, a centralised contract was awarded to Christy Friedgram and Kumarasamy’s firm Zinc Food Pvt Ltd at a massive rate of around Rs 640 per tonne for the same distance slab, for the January 2020 to January 2025 period.

Arappor pointed out that the selected firm violated the Tamil Nadu Tender Transparency Act and subcontracted the entire operations to several players who were carrying out lorry transport services until then for the TNCSC.

'No value addition'

"Without any value addition, Christy Kumarasamy’s firm was unjustly enriching itself by Rs 400 per tonne, creating thousands of crores of losses for the state exchequer. After the complaint by the NGO, the tender was terminated in three years by the Tamil Nadu government. After the termination of the contract, the regional managers engaged the lorry transporters in the districts at Rs 329 per tonne for the first 8 km slab," the complaint stated.

Later, 38 different tenders (one for each district) were floated in June 2023 for the appointment of contractors to transport the foodgrains. The tenders were awarded within a month of the BJP assuming power again at the Centre, in June 2024.

Christy Friedgram had donated Rs 12.58 crore to the BJP over the previous five years. In 2024 alone, it donated Rs 6 crore, said the NGO.

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Loss to exchequer

Arappor alleged that the tender was awarded to benami firms of the Christy Group through the FCI by the public servants of the Union government. The allotment of tenders to Christy's benami firms was also done during the same timeline and it resulted in a loss of Rs 992 crore to the exchequer, it alleged.

The NGO also raised the issue with the DVAC and the government in 2021 while urging an inquiry into the corruption in procurement of sugar, dhal and palm oil. However, there was no response from the authorities in this regard, it said.