The South Korean company had allegedly withheld information on being blacklisted by another Indian government agency, Airports Authority of India, in violation of tender conditions. The Union urban development ministry is now understood to be seeking legal opinion on whether the contract should be cancelled. Hyundai Rotem did not respond to a questionnaire seeking comments.
The contract awarded to Hyundai Rotem in April 2013 is not new to controversy. An inquiry committee under former economic affairs secretary R Gopalan, set up by the ministry, had in September last year indicted DMRC on a few counts.
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Eight companies had participated in the bidding process and six were selected for the financial bidding. The panel found the successful bidder, Hyundai Rotem, had put its financial package in the soft copy of its technical bid, not allowed in the norms.
The committee had also flagged a second issue regarding the guaranteed energy consumption parameter adopted by DMRC while assessing the bids. Despite CEF, one of the bidders, not following this norm, the tender committee allowed it to participate in the bidding process.
DMRC had opened eight technical bids in September 2012 and declared six of them eligible. The financial bids along with GEC values were opened in February 2013. Based on price quotations, Hyundai-Rotem was the L3 bidder while Siemens came L1. However, after loading the GEC values on the price quotations, Hyundai-Rotem became the lowest bidder while Siemens was pushed to the fourth slot.
Siemens, thus, appealed before the Delhi High Court seeking a restraint order for award of contract. French engineering giant Alstom, which was also one of the bidders, also appealed in the Delhi High Court challenging the tender process. Both the appeals were heard and dismissed by the court in May 2013. The High Court had held the process of evaluation of bids and the award of the contract was transparent and did not suffer from any illegality. Siemens then appealed before the Supreme Court which too dismissed the appeal in February this year.
The latest issue, however, deals with Hyundai hiding important information from the DMRC. "This has recently come to our notice that Hundai Rotem Company has concealed the fact that their company has been debarred by a government agency in their tender submission to DMRC against the Rolling Stock tender related to Phase III project of Delhi Metro," a DMRC spokesperson said in an emailed reply. DMRC has asked Hyundai to submit a clarification on the matter. "Suitable action will be taken against them keeping in mind the interest of DMRC and public at large," the spokesperson added.
While the urban development minister has reportedly asked for legal opinion on cancelling the contract, the minstry's secretary has cautioned arguing cancelling the tender would delay the project by two years. Rules of the tender as well as conditions laid down by the funding agency, Japan International Cooperation Agency (JICA), state if at any stage it comes to light that a company had secured the contract by furnishing fraudulent information, the contract would be cancelled.
After the Phase III becomes fully operational in next two years, Delhi Metro will be connected to faraway areas including Badli, Bawana, Najafgarh, Bahadurgarh, Ghaziabad, Faridabad and Noida apart from a few landmarks destinations like the IGI Airport domestic terminal and the Red Fort. The Phase III project will add 140 Kilometer to the existing Metro network and close to 15 lakh passengers to its daily users.