L&T was ignored in bidding process: CAG

Infrastructure major Larsen and Toubro(L&T) lost the contract of building Doon Cyber Tower (DCT) in IT park here to a start-up company despite securing far better points in the bidding process, a new report of the Comptroller and Auditor General of India (CAG) has revealed.

The selection of a joint venture partner of the government-owned State Infrastructure and Industrial Development Corporation of Uttarakhand Limited (Sidcul) for building the DCT was partial and unjustified, said the CAG report which was recently tabled in the state Assembly.

The DCT at IT park, the construction of which hangs in balance, is one of the most prestigious projects of Sidcul that was planned and designed as intelligent building for plug and play facility with all modern amenities. The project was to be constructed through the joint venture company of the Sidcul and Bangalore-based private developer IDEB Construction Project Ltd was selected in February 2006 through the bidding process.

Significantly, Congress was in power when the bidding process took place for the DCT. The matter is also being investigated through a commission of inquiry instituted by the Bharatiya Janata Party government.

The CAG report also said IDEB got only 25 points of 100 in technical qualification, whereas L&T, a better performing company, had secured 80 points in the bidding process. No justification was found recorded for selection of such a low technically qualified company (IDEB). The report said, IDEB started the construction work in June 2006 but could not continue due to paucity of funds.

CAG noted that selection of IDEB was unjustified because the comapny had no experience of raising non-resource debt (NRD) from technical institutions. According to the conditions of the agreement, the IDEB was responsible for arrangement of at least 60 per cent of the total project through NRD. CAG also cited some reports where Sidcul Managing Director had admitted, the selection of the joint venture partner was wrong. Thus the facts showed the selection of the partner was unjustified which led to the DCT remaining incomplete, thereby defeating the very objective of the project, it said.