CBI To Probe Rs 397 Crore Contract Issued Under DMK's Senthil Balaji

The Madras High Court has ordered a probe by the Central Bureau of Investigation (CBI) into alleged irregularities causing Rs 397 crore loss to the Tamil Nadu Government in a transformer procurement tender floated when Senthil Balaji held the electricity portfolio.

The court also directed the state's Directorate of Vigilance and Anti-Corruption (DVAC) to hand over all relevant records to the CBI within two weeks, enabling a detailed central investigation into the alleged scam.

Allegations Of Collusive Bidding

The case originates from a complaint filed by anti-corruption NGO Arappor Iyakkam, which alleged large-scale collusion in the tender process between 2021 and 2023, leading to an estimated loss of Rs 397 crore to the state exchequer.

According to the complaint, the alleged modus operandi points to cartelisation among bidders. As many as 34 companies that participated in the tender are said to have quoted identical prices, which were 40 to 60 percent higher than prevailing market rates for distribution transformers. The uniformity in pricing, the NGO argued, indicates pre-arranged bids aimed at eliminating competition and inflating procurement costs.

The petition further alleged that such coordinated bidding ensured contracts were awarded at artificially high rates, causing significant financial loss to the government.

Three-Year Legal Battle

Speaking to NDTV, Arappor Iyakkam founder Jayaram Venkatesan described the High Court order as a crucial breakthrough.

"This is the first step towards victory. We had to struggle almost three years just to get the FIR registered. We hope the corrupt are punished and the loss of Rs 397 crores is recovered back to the treasury," he said.

The NGO had been pursuing the case for nearly three years, alleging delays before securing judicial intervention.

Mounting Legal Scrutiny

The transformer tender probe adds to the legal challenges faced by Senthil Balaji. He had earlier stepped down from ministerial duties following allegations by the Enforcement Directorate (ED) in a money laundering case linked to an alleged cash-for-jobs scam during his tenure as Transport Minister under former Chief Minister J Jayalalithaa.

The ED has also levelled allegations of a separate Rs 1,000 crore irregularity in liquor procurement for sale through state-run outlets. Senthil Balaji has denied all allegations, stating that he will face the cases legally.

Responding to the allegations, Balaji denied any wrongdoing in the transformer tender process, asserting that the same procurement system had been followed since 2016, including during the AIADMK regime. He said that three committees had scrutinised the bids and that contracts were awarded when identical prices were quoted by participating firms, maintaining that such uniform pricing could not be questioned. Balaji further insisted that there was not even a rupee loss to the government.

What Next

With the CBI now tasked with the probe, investigators are expected to examine tender documents, pricing patterns and possible links between bidders to establish whether cartelisation and criminal conspiracy were involved. The role of officials and decision-makers in clearing the contracts is also likely to come under scrutiny.

The opposition had made corruption a key issues in the just concluded Tamil Nadu assembly elections, the votes for which will be counted on May 4.