Govt to probe 'cartel' in bicycle tenders: CM

Chennai, Mar 5 (UNI) Tamil Nadu Chief Minister M Karunanidhi today said the government would inquire into the alleged 'cartel' formed by two bicycle companies, which supplied bicycles for distribution to Plus Two students in the state and earned a profit of Rs 20 crore.

Reacting to reports that the two companies Atlas Cycles (Haryana) and Avon Cycles had formed the cartel and won the state government tender for supplying bicycles, Mr Karunanidhi said the government would immediately look into this and take action.

'The government will not remain a mute spectator when it loses an amount to the tune of Rs 20 crore in the deal', he said.

The Chandigarh-based Indian Bicycle Manufacturers Association (IBMA) has alleged that the two companies, after winning the state government tender for 462,272 bicycles in October last, supplied them at the net price of Rs 1980.76 and Rs 2067.30 for girls and boys bicycles respectively.

However, the two companies had supplied similar bicycles to Madhya Pradesh government at the rate of Rs 1626, including two per cent service charges and 0.5 per cent inspection charges in October 2006, the Association said.

'There had been no increase in raw material price and bicycles supplied to Madhya Pradesh government. The bicycles had the same specifications, conforming to ISI specifications. This means the two companies had charged Rs 395.41 more per bicycle, making a minimum additional profit of Rs 18.28 crore,' IBMA General Secretary R D Sharma said.

He said the Association had forewarned the state government about the cartel being formed and asked why small and medium scale manufacturers were not allowed to participate in the tender, but the Department of Backward Classes and Minority Welfare had ignored it and gone ahead and issued the tender in favour of the cartel.

UNI