THIRUVANANTHAPURAM: The Comptroller and Auditor General has found that the exchequer lost Rs 36.36 crore by violating the rules and paying interest to Bell Consortium in the K-FON contract. Mobilization funds were provided to Bell Consortium with interest waived as per the instructions of former IT Secretary M Sivashankar, the operator of the K phone project, KSITIL.

The CAG has asked the government for more documents for detailed verification.

Bell was awarded the tender for K-FON services for Rs 1531 crore. The mobilization advance is 10 percent of the cost of purchase of goods. Sivashankar proposed to waive the interest on this amount.

In 2018, KSEB proposed to charge 3 per cent more interest than SBI rate and recover the same in the bill itself in the first instance, as the prescribed rate of interest was not mentioned while giving the advance to Bell. But when Sivashankar informed that the money will be paid from KIIFB and they did not mention the interest, a contract was signed with Bell on March 9, 2019.

On May 2, 2019, Bell demanded an advance of Rs 109 crore. The amount was transferred in August and October. The agreement with Bell did not specify the interest to be received by the government or the interest to be charged. The CAG points out that this is against the provisions of the Store Purchase Manual and the Central Vigilance Commission.

Mobilization advance also includes interest. In order to waive the interest, the approval of the board meeting of the contracting parties is required. Here, K-FON did not seek the approval of the Board of Directors. The government lost Rs 36,35,57,844 due to non-payment of interest.