Tender manipulation row in Kerala coop banks software contract; CPM-led Dinesh Society under scanner

Thiruvananthapuram, Kerala: A controversy has erupted over the move to award the contract for implementing a unified software system in cooperative banks to the CPM-controlled Dinesh Beedi Workers Cooperative Society, with allegations of tender manipulation surfacing ahead of the government completing its term.

The tender was floated for installing software across 4,400 branches of 1,612 cooperative banks. However, the society quoted costs for only 280 branches, and on that basis emerged as the lowest bidder, leading to moves to award it the contract.

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Other bidders repeatedly sought clarification from the Registrar on whether the software was to be implemented in 280 branches or all 4,400 branches, but received no response. Following this, they have now approached the High Court challenging the process.

The project had earlier been awarded to Tata Consultancy Services (TCS) for ₹280 crore, but the company later withdrew. The Cooperation Department then explored awarding the contract to Dinesh Beedi Workers Cooperative Society without a tender, and Minister VN Vasavan held discussions with its representatives. Officials, however, warned that bypassing a tender could trigger legal issues, prompting a fresh bid process.

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The society had earlier developed the Cooperative Inspection Management System (SIMS) app without a tender, which has also faced multiple complaints.

Under revised tender norms, companies with prior experience in primary cooperative bank software were allowed to form a consortium. Two consortium led by Dinesh and MITCO participated. Dinesh quoted ₹50 crore for 280 branches, while MITCO quoted ₹231 crore for all 4,400 branches.

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It is also alleged that Dinesh Beedi Workers Cooperative Society lacks the intellectual property licence for the software it submitted. Of the two softwares it presented, one failed the technical evaluation, while the second was reportedly a modified version of software developed by a private firm. Despite this, it received technical clearance, and the issue of IP ownership was allegedly overlooked during the reverse bidding process.

MITCO has written to the Registrar stating it can implement the software in 280 branches for ₹45.6 crore, but the Cooperation Department has taken the position that the letter need not be considered.