HC rejects Chinese consortium's plea; upholds contract to BHEL

The Madras High Court has dismissed two petitions filed by a Chinese consortium challenging evaluation of tenders for a super critical thermal power project by Tamil Nadu Government owned power utility TANGEDCO and subsequent award of the contract to public sector BHEL, holding that there was no arbitrariness in the action.
"All the grounds of attack of the petitioner to the impugned action of the TANGEDCO (Tamilnadu Generation and Distribution Corporation Ltd) are devoid of merit. The manner in which TANGEDCO have conducted the process of evaluation of the tenders does not appear to be arbitrary, capricious or unfair," Justice V. Ramasubramanian held in his order.

CSEPDI-TRISHE consortium had sought to quash steps taken by TANGEDCO vide its September 27, 2014 letter to proceed with the tender of 2X660 MW Ennore SEZ Super Critical Thermal Power Project and challenged the award of the project to BHEL.
The Judge ruled the price bids of the petitioner as well as that of BHEL had been evaluated as per parameters indicated in the tender notification, by an independent consultant.
The Judge rejected all the grounds of challenge including procedural impropriety, 'failure' of TANGEDCO to comply with the provisions of Tamil Nadu Transparency in Tenders Act, 1998 and the related rules, wrong evaluation of the price bid of the petitioner and breach of confidentiality.

Accepting the award given in favour of BHEL, the Judge in his order said "even if I look at the case on hand with magnifying glasses, coloured with a tinge of suspicion, taking an extra mile and breaking the barriers of the scope of judicial review, I cannot overlook the following aspects:

"That BHEL is a government of India enterprise with a Maharatna status, while the petitioner is a private limited company having a consortium agreement with a Chinese company; that the debt component of the offer made by BHEL would also come only from a government of India enterprise namely the Power Finance Corporation Limited, while it has to come from the Industrial and Commercial Bank of China in so far as the writ petitioner is concerned.

"That normally a decision in favour of a public sector undertaking, whose major shareholding is with the government of India, may have to be viewed with a lesser amount of suspicion than a decision in favour of private players;
"That though after the advent of globalisation, no argument can be advanced on the basis of Videshi-Swadeshi concept, the fact remains that a decision in favour of a public sector enterprise cannot be easily upset without a strong case being made out," the Judge held.
"It is seen from the current files that the petitioner was aware of every move and every step taken by TANGEDCO and the writ petitioner appears to have chased the decision-making process at every stage right from May 30, 2014 making their conduct more suspicious than that of the others.