Speed governors norms ‘tweaked to give Rs 600-cr benefit’ to 2 firms

Auto part manufacturers supplying speed governors to commercial vehicle users in Haryana have alleged favouritism in framing rules to empanel suppliers . Smelling a scam the manufacturers who have been debarred as per the modified conditions, have written to Chief Minister Manohar Lal Khattar to prevent “the scam” that could reach Rs 600 crore.

Following a directive from the apex court, the Union Ministry of Road Transport and Highways issued a notification that all commercial vehicles have to be fitted with speed governors / limiting devices by July 31, 2016. These include commercial vehicles of all kinds, including trucks, school buses, etc.

Speed governors norms

Rule 118 of the Central Motor vehicle Rules 1989 empowers the state government to approve manufacturers for selling such equipment. After the eligibility rules were modified, just two of the 12 manufactures selling equipment in Haryana remain in fray for selling approved devices.

Devinder Kumar, owner of Micro Autotech now been rendered ineligible, has asked the Chief Minister to relook at the amended criteria as it has created a “monopoly” for two manufacturers. One of these two has been facing contempt proceedings in the Supreme Court initiated in a case pertaining to manufacturing of high security registration plates (HSRP).

In the modified eligibility criteria, Haryana invited applications from manufacturers of speed governors who had an annual turnover of Rs 50 crore in the last three financial years with a net worth not below Rs 20 crore as on March 31, 2015. Besides this every manufacturer has to submit a proof of selling at least 50,000 devices in the last three years. Due to these new requirements, 10 manufacturers of this device have been rendered ineligible.

The device is currently being sold in the open market at Rs 5,000 a piece. But in a monopolistic environment the cost of the device will be pegged between Rs 15,000 (selling price as per the tender process).

According to a memorandum submitted to the Chief Minister by one of the affected parties, Haryana has 5 lakh commercial vehicles that need speed governors till July 31. It is alleged that the new rules have been tailor-made to benefit two companies to the tune of Rs 600 crore.

Source: http://goo.gl/gzkPKa