HC restrains Tangedco from proceeding with fresh tenders

The Madras High Court today restrained Tamil Nadu Generation and Distribution Corporation Ltd from proceeding further with tender proceedings in the Rs 8,000-crore supercritical thermal project hours before the last date for submitting fresh bids.
Restraining Tangedco and others from proceeding further in the matter till the case is decided by the court, Justice M Sathyanarayanan said "floating fresh tender may result in cost overrun, (which will be) detrimental to public interest."
Originally conceived in 2007 as a 1,600 MW project proposed to be set up in Tuticorin district, comprising two units of 800 MW each, its capacity was scaled down to two units of 660MW each in February 2013.

Among the bidders for the project, an Indo-Chinese consortium of power engineering companies - CSEPDI-Trishe Consortium - emerged as the lowest bidder. The second lowest bid was BHEL.
Litigations started after the Tangedco on March 13 decided to reject both the bids on the ground that they had critical defects.
Even as the decision to scrap the process was challenged by the consortium, the authorities floated a fresh tender, which was again questioned by the consortium. It wanted the court to quash the fresh notification and direct the authorities to award the tender to the consortium.

N L Rajah, counsel for the consortium, submitted that reasons for rejection were not in consonance with Tamil Nadu Transparency in Tenders Act, 1998 and said the new tender would aid only BEL, as conditions were tailor-made for the public sector company.

Advocate General A L Somayaji said courts must be cautious while interfering with government decisions and said the consortium's bids suffered from fatal flaws. He said the tender was scrapped in public interest and the court's interference would cause further delay to the project.
Justice Sathyanarayanan, pointing out that a tender consultant who found several anomalies in the bids had not recommended outright rejection of both bids, said the tenders were floated in April 2013, and culminated in February 2015, with the whole process costing Rs 33.42 lakh.
Tangedco, being an instrumentality of the state, runs its affairs on public money, so it could have made an endeavour to see that wastage of time and increase in expenditure was avoided, the judge said.