KPCL in fresh controversy over Rs 2,184-crore Bidadi project

KPCL in fresh controversy over Rs 2,184-crore Bidadi project

Terms L&Ts bid unresponsive even after firm agrees to deviations withdrawal

The Karnataka Power Corporation Limited (KPCL) continues to find itself in the middle of a controversy over the proposed Rs 2,184-crore 700-MW gas-based project in Bidadi.

The KPCL, which had selected Alstom as the lowest bidder (L-1), had come under severe criticism for not having followed the proper procedures. The matter was even taken up before the High Court by two other shortlisted bidders.

“As an outcome of the writ petitions filed by Larsen and Toubro (L&T) and Tata Projects before the court, it was decided to form a sub-committee to examine the relevant issues and make suitable recommendations for the expeditious finalisation of the tender for the project,” the KPCL board had said in its 322nd meeting. A copy of the minutes is with Deccan Herald.

In line with the recommendations of the said sub-committee, the corporation had contacted all the four shortlisted bidders – Alstom, L&T, Tata Projects and BHEL – to resolve the aforementioned issues.

However, the board has noted in its meeting that in response to the opportunity provided to the company to mutually resolve the technical and commercial deviations, Alstom, vide a letter dated February 12, 2013, has expressed its inability to withdraw “such permitted, albeit unresolved, technical and commercial deviations on the terms requested.”

Following this, sources pointed out that the KPCL had decided not to consider Alstom for the project and that it had moved on to other shortlisted bidders.

Confirming this to Deccan Herald, KPCL managing director M R Kamble, said: “Yes, we have termed Alstom’s bid unresponsive,” and that the Corporation was in talks with the other bidders.

Replying to an email, an Alstom spokesperson said the KPCL was yet to communicate with them about the status.

Fresh controversy

This done, the corporation has got itself into a fresh controversy by terming “unresponsive” the bid of L&T, which was the second lowest bidder (L-2) when Alstom was still in the race, despite the company agreeing to withdraw all the deviations (technical and commercial) unconditionally.

On March 4, the Corporation communicated with L&T, inviting them for a meeting to resolve the deviations. During the meeting on March 5, L&T was asked to withdraw the deviations without any financial implications to the KPCL.

Among the deviations mentioned by the KPCL were those relating to auxiliary power consumption and entry tax. L&T, KPCL sources said, had raised a clarification as these two things were not mentioned in the scheduled list of deviations in the tender document and that it did not qualify as a deviation.

However, the corporation was not willing to concede and eventually, sources said, L&T agreed to unconditionally withdraw all the deviations, including the aforementioned things.

In a surprise move, the KPCL then termed the L&T’s bid “unresponsive” and rumours are rife about the intentions of the corporation.

For, with the unconditional withdrawal of the deviations, L&T, which was the L-2, should have automatically qualified for price negotiations, but the corporation’s board, going by the documents, has authorised Kamble to have price negotiations with another bidder, which has been selected as L-1.

Kamble, however, maintains that no decision on whom to award the contract has been made and that the KPCL was evaluating the matter in a preferential manner.
L&T officials were unavailable for comment.