Karnataka Government Launches Probe into Hutti Gold Mines Tender Irregularities
In a significant development, the Karnataka government has ordered a comprehensive investigation into alleged irregularities in the 2025 tendering process at Hutti Gold Mines Co Ltd (HGML), which stands as the only active gold-producing unit in the entire country. This probe represents a serious embarrassment for the state administration, highlighting potential flaws in public procurement procedures.
Details of the Tender Controversy
The secretary of the commerce and industries department initiated this probe in late February, focusing specifically on the tendering process at HGML, a company wholly owned by the Karnataka government. The controversy centers around bids called for the purchase of forged steel grinding balls, which are essential basic components used to grind materials into fine powders for efficient gold processing and production.
Two primary allegations are under scrutiny: first, that the tendering process was redefined midway through, resulting in the disqualification of bidders; and second, that subsequent modifications effectively excluded bidders from certain countries from participating in the process.
Government Response and Technical Investigation
A three-member technical panel led by Mallikarjun N, head of the mechanical engineering department at SJ Government Polytechnic, has been tasked with examining what the government describes as "unauthorized modifications to the tender conditions." This panel is specifically investigating violations of the Karnataka Transparency in Public Procurement (KTPP) Act and will recommend remedial measures and administrative due diligence procedures to overcome discrepancies for the company's smooth functioning.
The genesis of this probe traces back to July 1, 2025, when HGML initially called for tenders for forged steel grinding balls. Following the receipt of bids from four bidders for 125 mm balls and six bidders for 65 mm balls, technical evaluation was purportedly completed on September 18, 2025. However, investigators found that HGML failed to conduct proper evaluation according to prescribed procedures, arbitrarily disqualifying all participating vendors on that same day.
Chairman's Response and Political Context
JT Patil, the Congress MLA who serves as chairman of HGML, has downplayed the controversy, describing it as "not major" in comments to TOI. Patil stated that the tendering process is being corrected and that a meeting of the HGML board will take place in the second week of April, shortly after bypolls to the Bagalkot and Davangere assembly constituencies are completed.
"The investigation was ordered based on some changes made in the tender conditions by local officials. It is not a big problem. The technical committee has submitted its report. Based on it we will take further action," Patil added, attempting to minimize the significance of the allegations.
Procedural Failures and Fresh Tender Issues
The investigation revealed that after disqualifying all bidders, HGML refunded the earnest money deposits (EMD) of all participants prematurely within a single day of tender cancellation. Acting on appeals from the aggrieved bidders, a revisional authority passed an order on November 14, 2025, directing the tender accepting authority to "adopt a comprehensive and suitably calibrated approach to document scrutiny in future tenders, ensuring both substantive capability and compliance requirements are duly appreciated."
Based on this directive and considering the critical need for uninterrupted operations to maintain gold production, HGML was instructed to call for a fresh tender on February 3, 2026. However, even in this new tender process, the department found that "due diligence and proper application of mind did not appear to have been exercised."
Questionable Modifications and Administrative Inconsistencies
The government investigation discovered that HGML had modified tender clauses to impose "new restrictions on public procurement from bidders of certain countries, necessitating the registration of a land border sharing declaration certificate." These clauses were implemented without recording cogent reasons or proper justification, effectively preventing early participants from taking part in the new bidding process.
Further complicating matters, a communication from HGML chairman JT Patil requesting an amendment to waive these newly imposed restrictive clauses was questioned by the government, which cited "deep inconsistencies in the company's administrative approach." TOI has obtained a letter dated November 11, 2025, written by Patil, which other bidders claim shows favoritism toward two specific bidders by the company leadership and revisional authority.
The Hutti mines, located in Raichur district, represent a crucial asset for both Karnataka and India's domestic gold production capabilities. This investigation into tender irregularities raises important questions about transparency and accountability in public procurement processes at state-owned enterprises with significant economic importance.
