​Govt’s ‘unsmart’ tender decision, leads its ‘smart city’ project to a road block

A much hullabaloo over Narendra Modi government’s smart city project seems to have dimmed a bit. A report by The Economic Times confirms that an unsmart decision on the part of the government is affecting the execution of the prestigious project. Allegations of “conflict of interest” have left a heavy blow to the project, which resulted in a last-minute cancellation of its first major tender.

Sources have informed the ET that international consultancy firm McKinsey had "unofficially" helped the Ministry of Urban Development in preparing the groundwork for the Rs 7,000-crore project and one of its consultants had even authored a key tender document. However, the firm itself wasn't barred from bidding for the tender and was apparently working on a bid when the tender was scrapped on March 9, barely 48 hours before the closing date.

McKinsey's role in the project came into light when the National Institute of Urban Affairs (NIUA), which is responsible to implement the project, released the tender seeking request for qualification cum request for proposal on February 17. This was proven when the word file document uploaded on the NIUA website was found to be authored by McKinsey consultant Amit Gupta. The government's Central Public Procurement portal also has the same document.

The tender was cancelled after the ministry and NIUA received several complaints about the "conflict of interest" and that the document was tailored to benefit McKinsey.

NIUA director Jagan Shah admitted to the ET that he received calls and messages pointing out the possible conflict of interest, but said there was no written complaint regarding the matter. It was withdrawn since the "requirements for the project changed radically and the goalpost got shifted", Shah said. He said the document was written by "a Young Turk from McKinsey" and couldn't confirm whether McKinsey would have been kept out of the bidding process.

A McKinsey spokeswoman, on being contacted by the financial daily refused to comment on the matter.

A ministry source has informed that deficit of manpower made the officials seek help from McKinsey. An official defended the issue saying, “they are working pro bono.”

Talking to The Economic Times, OP Agarwal, a former bureaucrat at the urban development ministry and now director-general of the Institute of Urban Transport, said seeking such unofficial help wasn't proper.

"Sometimes, the ministries do take the help of private consultants to write project reports or draft RFPs, but then it is explicit that they cannot bid for the same," he added.

(Image: India Times)