No hospitality by Private Firms to Government Officials, says Finance Ministry

NEW DELHI: Red flagging hospitality by private firms to government officials, the Ministry of Finance has pulled up the Ministry of Railways on certain contract clauses with a private firm where it is mentioned in the contract that the firm will ensure travel, food, stay and hospitality of inspecting team. The finance ministry said that such clauses compromise independent inspection and should be discouraged.

The directions has been issued by the Department of Expenditure under the finance ministry categorically highlighting that it has noticed some hospitality clauses in the contracts signed with suppliers by some ministries, including railways.

“It has been brought to the notice of this Department that in the contracts signed with suppliers by some of the ministries have clauses of pre-inspection at the firm’s premises, where there is a provision that the suppliers or the vendors will pay for the travel, stay, hospitality and other expenses of the inspecting officials,” said the directions issued by the ministry.

“This is not in keeping with need to safeguard the independence of the inspecting teams. Such provisions in contracts need to be discouraged, so that inspections are not compromised. Necessary steps may be taken to strictly avoid such provisions in the contracts with suppliers/vendors,” it further added.

After the directions, the Ministry of Railways has issued directives to all 17 Zonal Railways, Railways public sector undertakings to ensure compliance of the directions issued by the finance ministry. Railway is one of the key central ministries that deals with private firms for purchasing materials used in workshops for production of coaches, engines and rails. It also gives maintenance and other works to private firms on contract.

“This is a move to check corruption and will pave for independent inspections. Doing away with hospitality clause will ensure that decision of inspection team is not influenced,” said a railway ministry official.

Former Railway Minister Suresh Prabhu in parliament had admitted prevalence of corruption in railways, especially in award of contracts and employment. To weed out corruption, railways is in the process of putting details of all tenders on website, stores procurement through e-tendering and reverse auctions.