WB-blacklisted firm bags mega project

In the first week of December 2012, the state government awarded a Rs 2,184-crore gas-based electricity project to Alstom, Switzerland. The company will set up the facility at Bidadi. The company will be responsible for the engineering, procurement and construction of the 700-mw project.

But it is ironical that the company has been debarred by the World Bank.

On February 22, 2012, the World Bank had said: “The World Bank group today announced the debarment of Alstom Hydro France and Alstom Network Schweiz AG (Switzerland)—in addition to their affiliates—for a period of three years following Alstom’s acknowledgment of misconduct in relation to a bank-financed hydropower project.”

The bank had further said that the debarment was part of a Negotiated Resolution Agreement between Alstom and the World Bank which also includes a restitution payment by the two companies totalling an approximate $9.5 million.

“The debarment can be reduced to 21 months—with enhanced oversight—if the companies comply with all conditions of the agreement,” the World Bank had said.
The other shortlisted bidders for the project were state-owned Bharat Heavy Electricals Limited, Larsen and Toubro and Tata Projects.

Speaking to Deccan Herald, Energy Minister Shobha Karandlaje said: “I do not have any information about the company being blacklisted by the World Bank. All I can say is that all the procedures, including opinions from chartered accountants and advocates were taken before awarding the contract and the said company is, in any case, the lowest bidder.”

The government, vide order dated July 5, 2011, had accorded approval to proceed with the implementation of the first block of gas-based capacity plant on LPG as fuel.

Based on the Karnataka Power Corporation Limited Board’s decision and the government order, the bid documents issued for 1,400 mw capacity earlier was modified to 700 mw and placed before the 258th meeting of the Technical Committee.

And the committee concurred with the modifications and recommended to seek the advice of the board to issue the bid documents to the aforementioned pre-qualified bidders.

Explaining how the selection was done, she said: “They (Alstom) are the best in this business. Even if we had given the contract to BHEL, the equipment would have been from Alstom as BHEL has a permanent contract with Alstom. The Tatas do not make their own equipment and would have been costly.”