Following detection of glaring “irregularities” in awarding the contract for a group medical health insurance scheme for nearly 4 lakh government employees and pensioners to Anil Ambani-owned Reliance General Insurance, Jammu and Kashmir Governor Satyapal Malik has “cancelled” the contract.

The step has come almost a month after the scheme was rolled out as mandatory for the serving employees, employees of PSUs and the Vaishno Devi Shrine Board. It was optional for pensioners and accredited mediapersons. Employee organisations had raised doubts about fairness of tying up with Anil Ambani’s Reliance right from the beginning after some patients’ claims were rejected by certain hospitals.

In an interview to a New Delhi-based TV channel aired on Wednesday night, Malik said he had “almost terminated” the contract after an investigation. “It will take couple of days for the official cancellation order,” Malik said.

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He said, “I studied it myself. The issue is that the government had not issued any tenders. A private company had asked for tenders on behalf of another company. Those bids were not displayed anywhere on our (government’s) website. The tenders were changed to suit a particular company.”

“It was full of frauds. I discussed the issue with the chief secretary and made it clear that such things can’t happen in my presence. So we decided to cancel it,” Malik added.

The Governor’s administration had rolled out the scheme with much fanfare on 20 September this year. An order issued by the Government of Jammu and Kashmir in September this year read, “The policy has been tied with M/s Reliance General Health Insurance Company Ltd on annual premium of Rs 8,777 and Rs 22,229 for employees and pensioners respectively.”

Ignoring the warnings of lack of transparency in the scheme, the finance department of the state government had justified the tie-up with the Reliance. Previous Governor NN Vohra had been cautious in approving contract with any health insurance company but the officialdom allegedly rushed the process to sign the contract with Reliance when Vohra was removed from the post. It took some time for Malik to realise the alleged scam.

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The issue took a serious turn last month when Congress president Rahul Gandhi, speaking on the ongoing Rafale controversy, took a jibe at Prime Minister Narendera Modi for allegedly favouring Anil Ambani’s defence firm over the state-owned Hindustan Aeronautics Limited. In a tweet, he said: “When your BFF 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!”

Gandhi’s attack came in the wake of the Governor’s administration through an order No 406-FD dated September 20, 2018, choosing Reliance General Insurance as the company to implement the insurance policy with a coverage of Rs 6,00,000 for individuals and family members on floater basis.

Principal Secretary, Finance, Navin K Choudhary had said the policy was tied up with RGICL on an annual premium of Rs 8,777 and Rs 22,229 for employees and pensioners, respectively.

Faced with criticism, the Reliance General Insurance had earlier this month claimed that it had won the contract to provide health insurance cover to Jammu and Kashmir government staff after a “rigorous and transparent competitive tender process”.

A spokesman of the state government had also rejected the criticism as “unwarranted” and said all public sector undertakings as well as top private insurance companies were contacted to participate in the bidding process.