Https Dgserver.dgsnd.gov.in Reports Rwservlet Server=rsnic&report=circular Entry

Government of India Directorate General of Supplies & Disposals Jeevan Tara Building, 5 Sansad Marg New Delhi-110001 Tel Number 23360610/23360537

Directorate: Information Technology

Section:IT-2

Circular Number:HDPE-PPBAG / IT-2 / RC-R3060000 / 0109 / 82 Circular Issue Date:15-10-2009 Sub: MINUTES OF THE MEETING FOR SUPPLY OF HDPE/PP BAGS DIRECTORATE GENERAL OF SUPPLIES & DISPOSALS (IT DIRECTORATE) 5, JEEVAN TARA BUILDING, SANSAD MARG NEW DELHI Dated: 15.10.2009

SUBJECT : MINUTES OF THE MEETING HELD AT 11.00 HRS. ON 6TH OCTOBER 2009 WITH ALL THE STAKE HOLDERS FOR SUPPLY OF HDPE/PP BAGS UNDER CHAIRMANSHIP OF DIRECTOR GENERAL (SUPPLIES AND DISPOSALS), NEW DELHI. Please find enclosed herewith a copy of the minutes of the meeting as mentioned in the subject for your information and necessary action.

(Raj Singh) Section Officer For Director General of Supplies & Disposals To Department of Food & Public Distribution Shri Neeraj Kumar Maurya, Joint Director (Movement) Food Corporation of India Shri D R Parmesh, General Manager Haryana Additional Director (Food & Supplies), Govt. of Haryana, Chandigarh (kind attention : Shri A.R. Godara) Fax No. 0172-2702759 1.

Chhattisgarh

Shri SS Sisodhia, Secretary, MARKFED, Chhattisgarh

AIFTMA Shri Gurdeep Singh -------------------------MINUTES OF THE MEETING HELD AT 11.00 HRS. ON 6TH OCTOBER 2009 WITH ALL THE STAKE HOLDERS FOR SUPPLY OF HDPE/PP BAGS UNDER CHAIRMANSHIP OF DIRECTOR GENERAL (SUPPLIES AND DISPOSALS), NEW DELHI The following were present:1.Shri 2.Shri 3.Shri 4.Shri 5.Shri 6.Shri

M Raman, DG (S&D)---In Chair I S Garg, ADG(G) S Krishna, ADG (QA) A K Jain, DDG (J) S N Srivastava, DS (IT) Raj Singh, SO (IT 2 & 3)

Department of Food & Public Distribution Shri Neeraj Kumar Maurya, Joint Director (Movement) Food Corporation of India 1. 2.

Shri D R Parmesh, General Manager Shri Chandresen Kumar, AGM

Haryana 1. Shri K K Goyal, District Food & Supplies Controller, Gurgaon, Haryana Chhattisgarh 1. 2.

Shri SS Sisodhia, Secretary, MARKFED, Chhattisgarh Shri ND Durj, Consultatnt, MARKFED, Chhattisgarh

AIFTMA 1. 2. 3. 4. 5. 6. 7.

Shri Shri Shri Shri Shri Shri Shri

S Choudhary L Tulsian Manoj Aggarwal Dinkar Sanjay Jain Dinkar Maheswari Gurdeep Singh

FIRM 1. 2.

Shri Anup Gopalka, Umashree Text plast, Ahmedabad Shri Sunman Nayer, Kanak Polyfab, Dhanbad

The complete overview of the entire procurement of HDPE/PP Bags commencing from 2007 as adhoc procurement followed by conclusion of rate contract on 18 firms through E-tendering competition basis in 2008-09 and subsequent lateral induction of new firms to the RC valid initially upto 30th April 2009, extended upto 31st May 2009 and thereafter upto 30st June 2010 including the supply orders placed was presented. It was informed that the total numbers of RC holding firms are 75 as on date and are on the rise. The supply orders totaling about Rs.250 crores were placed during 2008-09 on 47 firms for supply in various States followed by new orders placed on 42 firms for FCI demand of 50000 bales and 20 supply orders placed on firms for the demand of Haryana for 20000 bales in KMS ¿ 2009-10. 13 firms have not been allowed to continue with the RC who have not achieved the performance of 85% and also those firms who have been reported for inferior/poor quality for which joint inspection are being carried out including forfeitures of Performance Security for non performance of the contract as applicable under the contract terms. The agenda points as circulated in the brief dated 5th October 2009 were also read out for discussions in the above back drop seeking feedback, delay in supplies, inferior quality supplies & complaints, lateral entry to RC for NSIC registered firms, demand for the coming RMS season vis-a-vis Jute bags shortfall, status of ongoing supplies for FCI and Haryana, policy regarding distribution and allocation of quantities amongst past suppliers and new firms including necessary system driven software for the same and conversion of RCs from Centrally operated to DDO operated. 2. The representatives from AIFTMA informed that the woven sack industry, first time in history, have supplied these anti slip bags for food grains packaging and achieved performance of 95% which is remarkable. They assured that the industry is committed to meet the target to achieve 99% to 100% performance in the second year. AIFTMA admitted that there have been quality issues against the past supplies which primarily relates to individual firms supplying poor/inferior quality. They, however, stressed that the use of HDPE/PP bags for food grains is well established, as the like the cases of Cement, Sugar and Fertilizer, not only in India but also worldwide, for which they also explained the history of transition from Jute bag to woven sack HDPE/PP bags. AIFTMA representative further submitted that it is not possible for them or their zonal Heads to visit/monitor/control the quality of fellow manufacturers as all of them are member of the association and some of them are also the office bearer of the Association. For such purpose, they have already appointed an Independent Agency for adequate quality control in-house of all the manufacturers to supply these bags. 3. It was clarified to AIFTMA that despite aforesaid promises made by them in the past in several meetings, AIFTMA did not submit any report of such agency regarding quality of bags of any manufacturer and also no reply have been received from them regarding poor quality supplies made by the firms in the past despite categorically asked by DGS&D. Such assurances by AIFTMA would be of no avail as the Government can ill afford delay in supplies as well as poor/inferior quality bags

irrespective of any constraints. AIFTMA was also requested to furnish a copy of their Memorandum/Article of Association & updated list of its office bearing including functions & responsibilities so far as all matters related to HDPE/PP Bags supply through DGS&D R/C is concerned. 4. Representatives of user Department informed that there is always reluctance in the fields to use HDPE/PP bags and the priority goes to use of Jute Bags. They further informed that the storage time of food grains is normally 2-3 years followed by transportation of food grain. Packaging of food grain, whether Wheat or Paddy, in HDPP/PP woven sack is not disputed, but there are various issues which may be broadly categorized under following two categories as under:(a) Quality of Bags with respect of inadequate UV, anti slip properties and weight of the bag vis-a-vis specifications provided in the IS. (b) Handling of Bags including storage in Open/Closed condition, stacking problems for the required height, collapsing of stacks, liquidating the stocks, handling by the labors on the back and itching, using of hooks repeatedly etc. 5. AIFTMA representatives assured that they would continue providing necessary demonstration and user guide for proper and adequate use of HDPP/PP bags in fields as it requires careful handling. They have been providing such services in the past to various States. 6. It was observed that recent orders for 50,000 bales for FCI have been placed on 24.8.2009 on 42 firms with D.P. of 30.9.2009 originally, which have been extended/refixed upto 31.10.2009. The details of consignees have been received & issued for only 32,880 bales and these details for 17,120 bales are still required from FCI. The firms have been pressing hard for consignee details to enable them to complete the supplies after inspection as they have manufactured the bags. In addition, the Road Permits & CST /TIN number may also be provided to the firms by FCI consignees including M/s Kanak Polyfab, Dhanbad who have been trying hard for last 2 weeks but of no avail. FCI representatives informed their problem of storage and, however, assured to provide the same urgently. 7. It was clarified that distribution of quantities amongst the firms though supply orders have been made on the basis of 80% quantity to past suppliers and 20% quantity to new firms for FCI requirements of 50,000 bales and past suppliers of quality bags to Haryana Govt. for Haryana requirement of 20,000 bales as required by the indentor for KMS 2009-10 season. Other factors like quantity, %age performance and geographical location were also adequately considered & accounted while distribution. However, there have been unrest & criticism amongst Industry in this regard. Firms like M/s Oripol Industries, Orissa and M/s Plastene India have been making representations in these regard and also for the extension of RC.

8. After discussing various pros and cons including cost benefit analysis and also guidelines for the use of HDPP/PP bags available with the Department of Food and also the ECO brand which could be manufactured by the firms as informed by the AIFTMA, DG(S&D) finally decided that :(a) There cannot be any compromise on the quality of bags for which purpose third independent outside agency may be appointed to carry out tests audit checks at consignee place(s) after the bags are delivered through inspection by QA, DGS&D. The cost of such inspection agency shall be borne by the Government. This will be in addition to the quality functions being performed by QA, DGS&D. (b) User Department should provide the necessary data about the quality of bags including the name of the firms/suppliers supplying poor/inferior quality, if any, and related quantities for taking suitable necessary actions. (c) The existing technical specifications may be reviewed in consultation with firms during CCM meeting and also the BIS to provide much superior quality to withstand the prevailing usage condition in India including open storage condition as the State of Haryana and Punjab are using these bags in open storage condition whereas FCI are normally using the same in the covered go-down. (d) AIFTMA as well as the firms shall submit within 10 days a policy regarding distribution/allocation of quantities amongst the firms and necessary software so that it could be made system driven. It is necessary to have an open transparent policy in this regard to stop inflow of any criticism and unrest amongst the firms. The policy should meet the expectation of all the firms as well as the requirement of the Government Departments.

(

( RAJ SINGH ) SECTION OFFICER

)