One-paisa bid wins Joyalukkas 70% of TN govt’s Rs 755-crore gold ring contract

CHENNAI: Jewellery retailer Joyalukkas – by quoting 1 paisa towards service charge for every 4, 41, 667 one-gram, 22-carat gold rings – turned out to be the lowest bidder among 11 key jewellers who participated in the tender for supplying gold rings.

Key points

• Implemented by the Tamil Nadu Medical Services Corporation (TNMSC) from September 15, the scheme gives a ring to every baby born in a administration hospital from June 22.
• "The first phase will cover the distribution of 1, 28, 499 gold rings required for four months, from June onwards, to eligible beneficiaries, " the statement remarked.
• AIADMK IT wing on 'X' remarked the Joyalukkas bid rate raises eyebrows and alleged that CM Vijay was the brand ambassador for Joyalukkas's sister concern, Jos Alukkas.
• Only Kalyan Jewellers agreed to match the cost quoted by the lowest bidder, the release stated.
• Joyalukkas, in an official note, described its quote as a deliberate low-margin commitment to the welfare programme rather than a pursuit of commercial return.

As the surprisingly low bid rates produced rounds on social media, leading to debates and political reactions on the nature of the tender process, the state health department issued a release on Friday night, stating that the contract has been awarded in 70: 30 ratio to Joyalukkas and Kalyan Jewellers, the only other bidder that agreed to match the cost.

According to the health department, Joyalukkas quoted the lowest cost of `0.01 per ring, excluding the prevailing rate of one gram of gold but including all other extra charges such as making charges, insurance, transportation and BIS hallmarking.

"In accordance with the provisions of the TN Transparency in Tenders Act and Rules, the other 10 participating firms were asked whether they were willing to match the lowest bidder's rate. Only Kalyan Jewellers agreed to match the cost quoted by the lowest bidder, " the release stated.

"The first phase will cover the distribution of 1, 28, 499 gold rings required for four months, from June onwards, to eligible beneficiaries, " the statement remarked. The second lowest bid was by GRT Jewellers (`410.97), followed by Vummidi Bangaru Jewellers (`822.97). "The quoted amount was submitted as per the pricing structure and terms prescribed in the tender, " Joyalukkas informed TNIE.

Joyalukkas, in an official note, described its quote as a deliberate low-margin commitment to the welfare programme rather than a pursuit of commercial return. Its chairman and managing director Joy Alukkas framed the win as an opportunity to backing a scheme that reaches "thousands of families" throughout the state.

Each ring must carry the state emblem and a portrait of the CM. If a batch of rings fails testing, TNMSC can trigger a mandatory buyback at the higher of the original cost or the prevailing benchmark rate, on top of liquidated damages capped at 10% of contract value.

Meanwhile, AIADMK IT wing on 'X' remarked the Joyalukkas bid rate raises eyebrows and alleged that CM Vijay was the brand ambassador for Joyalukkas's sister concern, Jos Alukkas. Former MLA Ezhilan Naganathan (DMK) remarked the TNMSC, known for procurement of quality medicines, has lost its pride with procurement of gold.

In short, one-paisa bid wins Joyalukkas 70% of TN govt's Rs 755 is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.