Luxury In Deficit Pushed India Post Into Crisis

By: S Kumar On: 11/25/2016    3 comments

I have made an integrity pledge few weeks before as part of the observance of Vigilance Awareness Week from 31.10.2016 to 05.11.2016 and got inspired by some words in the pledge.

Then I decided that I have to contribute something into this campaign as a citizen of India.  For that, I have selected a particular area to which the eyes of media have not been reached.

No. 1 – Story of Recovery

Let us start with a story of a recovery from a Sub Postmaster who made a loss to Department of Posts.  The incident was happened in 2015 and the loss amount was Rs. 17.08. 

One day the above said Sub Postmaster had received a letter from Divisional Office stating that they have find out some misuse of money from NPC Bill Returns and the Sub Postmaster has to credit Rs.17.08 in UCR as a recovery of loss.

The only crime that had committed by the SPM was that he had paid the office telephone bill after pay-by-date along with late fee of RS. 17.08.

The most obedient SPM had credited the amount in UCR without any objection and had made a compliance report to Divisional Office.

Actually, the SPM was not liable to pay the amount because the telephone bill was received only after the pay by date.

You may think that this story is only an imagination.  So the copy of letter sent to the SPM by DO is shown below.

Through this story, I am not trying to blame the officer or staff who took the decision to recover the amount.  Instead, I am taking this opportunity to congratulate the officer for doing their work so vigilantly and thereby saving Department’s money.

Some people may disagree with me on this subject.  Let us stop this story here and start another story.  After completing the new story, we can discuss about and compare these two stories.

No. 2 – Story of Misuse 

For last few years, India Post employees and its customers were repeatedly hearing the word “change” and everyone was waiting for that change.  Especially India Post employees had so much of expectations in IT Modernization Project 2012.

When we hear, or see the name, IT Modernization Project, normally we think of replacement of computers and other hardware or its upgradation.  But everything happened in India Post except change of hardware.

Everyone is speaking about various project of India Post incurring billions of rupees but nobody is sure about the exact amount.  Some reliable source says that it is approximately 4000 or 4900 crore rupees.  Anyway, I am not going for an assessment of the project amount because it is beyond our limit.

I am focusing on some limited areas where we can assess the cost factor and its return.  Whether it is 4000 Crore or 4900 Crore, one thing is sure that the amount is so big and it is almost sufficient to meet the modernization requirement of India Post.

But when we come to the reality, the project implementation is lagging due to shortage of fund.  Otherwise the old systems could have been replaced with new one. 

From the study, it is clear that something wrong happened in the spending pattern of India Post in connection with IT Modernization project.  But I am not ready to call it as “India Post Scam” because I am not competent to do so and it is unfair that I am acting like CAG.  You can decide whether it is a scam or not after reading remaining paragraphs.

Misuse No.1 - Juniper Switch, HP Router and Rack

This is the most painful part of the story and we can say it as ‘totally mysterious’ one.

If you take the case of purchase of network equipment for Post Offices in connection with Sify network integration, you can clearly understand that lakhs of rupees had been misused in each Post Office.

75% of amount spent for the purchase Network switch and Router was actually misuse of Government money.  Crores of rupees have been lost in this connection all over India. Most of the employees and general public are unaware of it.  So I am specifically explaining that area below.

All General Post Offices (GPOs), Head Post Offices (HOs),MDGs, LSG Offices and selected B Class Offices are using Juniper EX 4200 Series switches.  As per invoice sent along with the packet, the price of one 48 port Juniper switch is Rs. 1,63,112 (One lakh sixty-three thousand one hundred and twelve) and 24 port switch is 1,46,716(One lakh forty-six thousand seven hundred and sixteen). GPOs and HOs are supplied with 48 port switch and others are supplied with 24 port switch.

The most important question is whether the Juniper EX 4200 switch is the actually required for Post Offices.  Answer is clear that it is not at all appropriate for the use of Post Office.

The EX4200 Ethernet Switches are the high end fixed-configuration solution that is used in campus installations, as well as in 1 Gigabit Ethernet (GbE) access environments in the Data Center. That means these types switches are used in extra-large institutions which need to connect different units spread in different areas of the same campus or very complex and secured network environment like Data Center.

Even bigger banks or other bigger financial institutions are not using these type high end switches.  They are using switches ranging from Rs. 20,000/- to Rs. 40,000/-, which can satisfy all the needs by limiting the cost.

If we take the case of Routers, Post offices are using HP A-MSR 30-20 Multiservice routers. Actually, this router model is designed for medium to large scale organizations with ability to meeting complex needs.  Don’t forget that these types of routers are using even in the Single handed Sub Offices. The market price of this router is ranging from Rs. 1,20,000 to Rs.1,40,000.

Post offices need only mid-rage routers like HP MSR 1003-8 AC router.  There is no need for separate network switch for small office since MSR 1003 has 8 network ports integrated with router.  The price will be around Rs.60000/-

Purchase of Network Rack is another big mistake committed by somebody.  All departmental offices are supplied with 4U or 5U network rack in connection with NI project.  Price of these rack are ranging from Rs.4000 to Rs.6000.  These racks were supplied without assessing the actual requirement because all most all offices already had the networks.  Number of offices is using the old network rack instead of newly supplied one due to various reasons.

Misuse No.2: HP Desktop Systems

Recently India Post has purchased some business Desktop computers which were also a misuse of money.  Now India Post is moving to web based applications for the various operations at Post Offices so there is no need for systems with high end processor.  A minimum configured system is sufficient to operate all types of web applications.  When we come to OS section, I have already explained about the loss incurred by Department of Posts in connection with purchase of Windows OS in my post Throw Windows and Use Open source and Save India Post

Another important thing is the price spent for each systems purchased recently. Limited numbers of computers which have purchased centrally have been supplied to various Divisions recently.  When we look at the price label, we can clearly see that it is Rs.54926/ system. But the HP systems with same model and configuration can be purchased from open market for Rs 42000/-.

Normally Central Government Departments make purchase on DGS&D rate which is comparatively lower than market price. But things happened reversely here.

Even if there is apt word for depicting such activities, decently we can call it as misuse of Government money. 

Misuse No.3: HP Colour Laser Printer & LPT Port Card

All Head Post Offices have been supplied with HP CP4025dn colour LaserJet printer for using in PLI CPC by spending Rs.1,47,000 each.  The only colour print out to be taken in CPC is the New Policy Bond.  There was no need of purchasing HP CP4025dn color LaserJet printer for Post Office since it is used for high precision professional graphics printing in big research organizations and the printing cost is very high.  We need to spend above Rs. 70000 for purchasing fresh cartridge for this printer.

Lots of economy colour printing options were available in the market for using in PLI CPC. Colour Ink Tank System Printer was the best option for office color printing.  These types printers are available in the market for Rs.10000/- or below. Cost per printing is very low and the price of refill ink is very cheap.  In this sense, it has misused Rs. 1,46,000 for each Head Post office in India.

The real example of misuse of money is the supply of LPT card along with the laser printer.  Above said laser printer has USB port and LAN port to connect with computers.  There is no need of LPT port in this printer actually, but the LPT port card has been purchased for Rs.4000 per printer.

Most interesting thing is that the newly supplied computers don’t have LPT port. 

Misuse No. 4:  HP Scanjet

Good quality scanners are available in the market for amount under Rs. 25,000 but the authorities opted HP Scanjet 8270 pricing around Rs. 53,000 for the use of PLI CPC.  HP 8270 is a 4800x4800 dpi printer and it is used for scanning and saving high quality colour graphics.  PLI CPC mostly needs black and white images or maximum gray scale version of scanned image so 2400x2400 dpi was sufficient. But it has spent double the amount.

Over All Idea about Misused Amount

Calculations made in this portion are based on the available records and prevailing market prices. 

If we consider an HO or a Sub Office with MPLS connection, total of Rs.3 Lakh had been spent only for purchasing Switch, Router and a Rack.   All the hardware of an office including computers, printers, etc. could have been replaced for the misused amount.  Actually, two lakh rupees is sufficient to meet all the technological requirement of B class SO.

Inorder to give an overall picture of expense, I have created a table with approximate numbers of equipment purchased in different units in India Post and it's approximate purchase price.  After analyzing the tables, you can decide how much misuse had been taken place in India Post.  The actual amount would be more than the following figures.

SL No	Name of hardware	No. of items purch ased (Appr oxima te)	Unit price in MRP	Amount spent for purchasing	Misused money  (Approximate)  **
1	HP Routers	26685	132000	3522420000	1921320000
2	Juniper Switch 48 port	1185	1,63,112	193287720	157737720
3	Juniper Switch 24 port	7482	1,46,716	1097729112	910679112
4	Rack	26685	6000	160110000	47100000
5	Desktop	1000*	54926	54926000	11926000
6	HP Colour LaserJet 4025	1235	147352	181979720	169629720
7	LPT port card	1235	4000	4940000	4940000
8	HP ScanJet	811	53399	43306589	23031589
	Total			5258699141 525.87 Crore	3246364141 324.64 Crore

*assumed that only 1000 systems have been purchased in this batch (actual number will be high)

** misused money= actual expense - amount required to meet the needs

Misuse No.5:  Some old misuse memories

It was during 2008-2009 when India Post had purchased large number of computers for the vide scale computerization of Post Offices.  For a B class Sub Office, two computers with pre-loaded Windows Vista Business OS, four printers including one laser printer and one passbook printer, Two Lipi Barcode scanner (Cost was nearly rupees 6000 per scanner and most of them were not lasted for more than one year actually)

Interesting part was the supply of Windows Server 2008 and SQL Server 2008 along with above said hardware.  The approximate price of these items were Rs. 24,000/- and Rs. 40,000/- respectively at that time.  These software could not use at the respective offices because they were not compatible with the departmental software at that time. 

After the release of Meghoot 7, the scenario had changed a little bit.

The word OMEGA will haunt you lot when you think of weighing machines. 

If I continue each and every story, I cannot conclude this article.  Since it is not an investigation report or audit report this is enough to convey some messages to the employees of India Post and general public.

So, let’s remember the last paragraph of the first story where I have mentioned about a comparison between two stories.

In the first story, officials are more concerned about the loss of Department and they are trying to save each money and thereby save India Post from huge loss. Such decisions are mostly taken in lower level.  That is why I have told that such decisions deserve some good words.

On the other side, some body misuses the Government money including those saved by above said officials too.  This article is only a sign that somebody will watch everything even if majority ignore. 

Lot of expenditures in India Post are yet to come including purchases for India Post Payment Bank (IPPB). I expect that, the mistakes committed in past will not be repeated. Now each citizen has to use his ultimate weapon i.e., RTI Act 2005 to bring the light into the darker section if anything goes wrong.