L&T moves HC against KPCL over Bidadi power project

The controversy surrounding the proposed Rs 2,184-crore 700-mw gas-based power project at Bidadi seems far from dying.

Larsen and Toubro (L&T), one of the shortlisted bidders for the project has moved the Karnataka High Court contesting Karnataka Power Corporation Ltd (KPCL)’s move to term its bid unresponsive without furnishing reasons for the same. KPCL, which had selected Alstom, one of the bidders as the lowest bidder (L-1) had come under severe criticism for not having followed the procedures.

The matter was even taken up before the High Court by two of the other shortlisted bidders--L&T and Tata Projects earlier this year. The court had disposed off the matter stating that it was not an appropriate time for the petition to be filed as the contract was not handed over to anybody yet.

And, in its 322nd meeting, the Board had said: “As an outcome of the writ petitions filed by L&T and Tata Projects before the High Court, it was decided to form a sub-committee to examine the relevant issues and make suitable recommendations for expeditious finalisation of the tender of the project.”

Following the recommendations of the sub-committee, KPCL contacted all the four shortlisted bidders, Alstom, L&T, Tata Projects and BHEL to resolve the aforementioned issues.

The Board has noted that Alstom, vide a letter dated February 12, 2013 had expressed its inability to withdraw “such permitted, albeit unresolved, technical and commercial deviations on the terms requested,” which disqualified Alstom.

New controversy

In pursuit of a vendor, KPCL however got itself into a new controversy by terming the bid of L&T, which was the second lowest bidder (L-2) when Alstom was still in the race ‘unresponsive’, despite the company agreeing to withdraw all the deviations (technical and commercial) unconditionally.

L&T has since moved the High Court against this vide a writ petition (18607), the preliminary hearing of which is already complete and the matter is posted for hearing post vacation.

On March 4, 2013, KPCL 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 deviations without any financial implications to KPCL and among the deviations mentioned 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 unconditionally.

In a surprising move, KPCL has termed L&T’s bid unresponsive, while, with the unconditional withdrawal of the deviations, L&T, which was the L-2 should have automatically qualified for price negotiations.

But, minutes before the Election Commission invoked the model code of conduct on March 20,  the then Chief Minister Jagadish Shettar, who was also the Chairman of KPCL, awarded the Rs 2,184-crore contract for a power project at Bidadi to Tata Projects.