Bhel, Tneb Accused Of Violating Tender Norms

The Madras High Court has ordered issue of notice to the Tamil Nadu Electricity Board and Bharat Heavy Electricals Ltd (Bhel) for alleged violation of tender procedures related to the setting up of three hydro-electric projects resulting in the state losing about Rs 3 crore.

A division bench, comprising Chief Justice M S Liberhan and Justice E Padmanabhan, ordered the notice returnable in four weeks on a public interest writ petition by former joint secretary in the industries ministry, R Krishnaswamy. The petitioner asked the court to restrain Bhel from executing the tender terms, awarded to it by the board, which included works relating to installation of three units of 50 mw each for the Pikara ultimate stage hydro electric project at Masinagudi, about 150 kms from Coimbatore.

He contended that, besides Bhel, four foreign companies had responded to the Boards invitation for tenders on April 9, 1994.

He alleged that the board awarded the contract to Bhel on the basis of private negotiations. Despite Austrian firm Skoda Exports being the lowest bidder at Rs 70.639 crore, Bhel bid of Rs 73.855 crore was accepted, he said.

The other companies that had sent in bids were C G Ceglac of France, Sulzer of Switzerland and K Vaekner ABB of Germany.

According to the petitioner, Bhel did not qualify for the contract as the company had not constructed any project above 900 m, while the tender specified that the units and associated equipment would have to operate at 1026 m. Skoda Exports was credited with being the only company to have completed similar works at a height of 970 m, the maximum height reached so far in the country, he said.

Stating that it was beyond his understanding as to why Bhel was awarded the contract, he submitted that the purpose of inviting global tenders had been defeated.

Pointing out that Bhel was yet to commence implementing the contract, the petitioner pleaded with the court for a directive to declare the award as null and void, arbitrary, contrary to law, ultra vires and unenforceable.