TDS Desk

In a blatant manifestation of corruption and irregularities, the Dhaka North City Corporation (DNCC) procured 3,000 kg of larvicide at a staggering rate of Tk6.32 crore, which is 10.12 times higher than the estimated market value of Tk63.41 lakh.

The inflated figure translates to Tk21,068 as the cost of each kg of Novaluron 0.8p larvicide, while the actual cost, including a 10% profit margin, should have been around Tk2,114, thus draining down Tk5.69 crore, finds during the investigation.

The tender for providing the larvicide was awarded to Genetica Industries Limited, owned by Ashmita Erad Ali. However, Medina Indenting Limited owned by her father-in-law Hakim Ali along with another shell company named JESCO SOLUTION participated in the bidding to help it get the contract.

The three companies submitted tender security money on the same day on 28 December 2023 through the same bank — United Commercial Bank Limited – and the same branch – Jamal Khan in Chattogram.

According to the documents obtained by the Correspondent, then DNCC chief store and purchase officer Ramenderanath Biswas, who invited the tender, and assistant store and purchase officer Rahat Al Faysal colluded with the supplier to inflate prices.

The DNCC market price assessment committee overlooked well-known suppliers and instead collected price quotations from shell companies with dubious credentials before the tender was floated.

However, the DNCC authorities approved the purchase in all stages and paid the bill to the contractor despite knowing the truth.

According to the DNCC website, the tender with ID 917508 was floated on 30 November 2023 to procure 3,000 kg of Novauluron larvicide and the closing date for the tender submission was 31 December 2023.

According to the work order issued in favour of Genetica on 28 February this year, the DNCC asked it to supply the larvicide by 28 April.

According to the Plant Protection Wing of the Department of Agricultural Extension, which is mandated to issue licences for pesticide import, Genitica had no licence at the time of the tender invitation for importing larvicide as its origin is in the United Kingdom.

The company received the import licence on 5 May and supplied the first consignment of 500 kg of larvicide on 10 June, according to the documents of the DNCC and Plant Protection Wing.

According to the bill entry of a 500kg shipment of Novaluron larvicide aired by Qatar Airways on 31 May 2024, the assessable price (including cost of goods, insurance and landing charge) is Tk566,176 and the total amount of customs duty, regulatory duty, value added tax, advance income tax and advance tax for the entire consignment was Tk331,779.

If a 7% VAT imposed by the DNCC and a 10% markup are added to the value, the total costs stood at Tk1,056,893 and the price of one kg stood at Tk2,114.

The DNCC market price assessment committee, led by its convener and assistant store and purchase officer Rahat Al Faysal, collected price quotations from shell companies before the tender was floated.

It sent a letter to Khilgaon-based Cherry Incorporation, which usually supplies stationery items, and it quoted Tk23,100 per kg.

The committee also sent a letter to Medina Indenting Limited, which used suite 888 of Hotel Agrabad in Chattogram as its office, for collecting price quotations.

On behalf of the company owned by Hakim Ali, its manager Abu Bakkar Siddique submitted its quotation at Tk27,100 per kg.

Abu Bakkar is also the manager of Genetica Industries, which is a concern of A&I Group. Medina Indenting Limited used the address of Genetica as its Dhaka office’s address.

Rahat also sent a letter to the A&I Group of Ashmita Erad Ali and JESCO SOLUTION of Chattogram which quoted per kg price as Tk27,100.

Forward International (BD) Ltd, MR Enterprise and Nokon Limited are among the regular pesticide and larvicide suppliers for the DNCC and their contact numbers and addresses are available online.

However, the DNCC did not send them any letter for a price quotation.

According to the DNCC, the committee estimated the price for 3,000 kg of Novaluron 0.8p larvicide at Tk65,925,000, translating it to Tk21,975 per kg, following the price quotations from the shell companies.

Analysing the websites and addresses of the Madina Indenting, JESCO SOLUTION and Cherry Incorporation, it was found that they are shell companies and they took part in the bidding process to facilitate Genetica.

In the open tender (ID 917508) for supplying 3,000 kg Novauluron larvicide, three companies competed for the contract. They are Genetica Industries Limited, JESCO SOLUTION and Medina Indenting Limited.

The three companies submitted their pay orders on the same day through the same bank and same branch.

However, JESCO SOLUTION and Medina Indenting Limited quoted prices that were less than Genetica ones.

The tender conditions were suspiciously tailored to favour Genetica. A bidder was required to have secured contracts worth Tk3 crore and a minimum supply capacity of 1,500 kg novaluron larvicide in the tablet form over the past three years, the conditions that closely aligned with Genetica’s profile.

Ramenderanath and Rahat could not be contacted over the phone despite repeated calls for their comments.

Talking to this correspondent, national trainer on public procurement Mohammad Mesbahuddin said, “Generally, the price quotations are collected from relevant and regular suppliers. When a product is a foreign one, the issues of source disclosure, authorisation from the manufacturer and import licence are taken into consideration. Besides, in the age of digitisation, there’re many ways for market price assessment. If you search for a product online, you can get the address of the producer. Many organisations collect quotations through email.”

He said, “But what happened in the city corporation regarding the price quotation collection seems to be totally fabricated. A procurement entity can’t collect price quotations from irrelevant and inexperienced companies. The market assessment committee might have colluded with the supplier.”

However, DNCC Chief Executive officer Mir Khairul Alam said the assessment process was done before he joined as the CEO. “I’ll inquire about the issue. I didn’t know about it earlier.”

When asked, DNCC Administrator Mahmudul Hasan said, “The perpetrators must face dire consequences if they’re proved to be guilty. I’m going to inquire about the issue.”