The Jammu and Kashmir governor has scrapped a group insurance contract bagged by a firm in Anil Ambani’s Reliance group, declaring he had “personally” concluded that the entire deal was “full of fraud”.

The disclosure not only renews focus on the common Reliance factor at a time the Rafale scandal is boiling afresh, it also helps Rahul Gandhi claim a significant scalp.

Although governor Satya Pal Malik, who was with the BJP before taking up Raj Bhavan assignments, has claimed credit for himself and Narendra Modi’s reputation for busting what he has described as a “scam”, the Congress president had earlier this month drawn attention to the health insurance project and made a reference to the Prime Minister as “BFF” (best friend forever) in the context of the Rafale deal and the mediclaim scheme.

The Jammu and Kashmir project to provide health cover to lakhs of state government employees has two aspects: the tender bagged by Reliance General Insurance and the policy product designed by an intermediary called Trinity Reinsurance. Governor Malik’s explosive comments suggest Trinity ran the bidding process, too.

Malik has levelled grave and sweeping allegations but has neither named Reliance nor pinned specific charges on the company. Reliance General Insurance has denied any wrongdoing. Trinity could not be contacted for comment.

The gist of the governor’s charges is as follows:

• Trinity “was a front for some other company, which I will not name”. Trinity, not the government, had invited the tenders to pick the insurance company for the mediclaim scheme.
  
• The bids were not displayed on the government’s website.
  
• The tenders were opened on a holiday.
  
• The tender amount was changed to suit a particular company.
  
• More employees were added to the scheme to increase the amount (total premium collected).
  
• Entire deal “was full of fraud”.
  

Trinity was chosen in January 2018, when the PDP-BJP government was in power. The Reliance firm was picked last month — by then the coalition had collapsed and central rule had been declared — through the bidding process.

State government employees were up in arms against the contract, alleging it was farmed out fraudulently. The issue snowballed after Rahul joined the protest bandwagon.

“When your BFF (Best Friend Forever) is the PM, you can get the 1,30,000 Cr. Rafale deal, even without relevant experience. But wait. There’s more! Apparently, 400,000 JK Govt staff will also be arm twisted into buying health insurance ONLY from your company!” the Congress chief had tweeted on October 6.

Around 3.5 lakh regular government employees are compulsorily covered under the scheme. For pensioners, it is optional. The scheme is expected to cover many people, including the family members of the employees, and hundreds of crores of rupees are expected to be paid as premium.

The scheme covers each employee plus five members of his or her family for coverage of Rs 6 lakh with a premium of Rs 8,777 per annum. For a pensioner, the premium will be Rs 22,229.

Governor Malik’s revelations came during two rounds of interactions with the media.

On Wednesday, Malik spoke to Zee News.

Question: The contract was given to a private company called Reliance of Anil Ambani…. Questions have been raised against it. Have you investigated it?

Malik: “I have not only investigated it but I have almost terminated it and order will come in two days. I myself studied it. What was wrong with it was that government had not invited any tender. There is some company called Trinity which was a front for some other company, which I will not name. (It) had invited tenders. Those bids were nowhere on our website, on the government’s website. There again, the tenders that came, their amount, was changed to suit a particular company. Tenders were opened on a holiday and that tender was given to the company.

“I got to the root of it, and found who was involved in it and how much money was involved. Another thing that was done to increase the amount (premium), many more employees were added to it. Entire deal was full of fraud so I talked to chief secretary and told him it cannot happen in my presence. Those who were involved were called and everything became clear that there was some wrongdoing. So we decided to cancel it.”

Question: Was there any pressure on you?

Malik: The beautiful thing is that we have such a Prime Minister that no pressure came on me. Nobody can say in country that he can get things done through Narendra Modi. So if nobody can reach him, I don’t accept pressure from anybody else.”

On Thursday, Malik spoke to other reporters: “I personally went through the file and when I reached the conclusion that there was something wrong in it, I didn’t take a minute (and) I cancelled it yesterday. I can’t disclose it (names of those involved) now but those who are involved will be punished.”

A spokesperson for Reliance General Insurance said in Mumbai that the insurer had won the mediclaim policy through an open, transparent and competitive process.

“The tender process involved both technical and financial evaluation, and Reliance General Insurance’s winning bid was almost 30 per cent lower than the closest quote, resulting in the best commercial terms for the state government employees. The policy has commenced on October 1, 2018. Reliance General Insurance has not received any subsequent intimation with regard to the policy till date,” the Reliance General Insurance spokesperson added.

On the day Rahul had criticised the deal, an official spokesperson of the Jammu and Kashmir administration had defended the contract and said the scheme has been “implemented after following all the required procedures in a fair and most transparent manner”.

The spokesperson had said the bidding process was monitored by a team of senior-most officers.

“In the first round of bidding only one bid was submitted by a public sector undertaking and as the first round concluded with poor response, it had to be terminated,” he had said.

“Thereafter, a pre-bid conference was organised, where both private and PSU companies participated and the tender was reissued with minor changes in technical parameters on their suggestion”.

The spokesperson said nine companies submitted bids, out of which five qualified on the technical evaluation criteria.

“The financial bids of the qualified companies were opened and it emerged that Reliance General Insurance Company with a quoted premium of Rs 8,776.84 was at L1, National Insurance Company with a quoted premium of Rs 11,918.00 at L2, ICICI Lombard with a quoted premium of Rs 17691.74 at L3, Bajaj Allianz with a quoted premium of Rs 23476.10 at L4 and United India Assurance Company with quoted premium of Rs 27225.00 at L5,” he said.

“The gap between L1 and other bidders was substantial and, therefore, there was no question of lack of competition,” he said.