HC stays finalisation of all irrigation tenders

Says waiver of certain conditions done to favour some FIRMS

Six months into its tenure, the Congress government in the state received its first legal jolt when a division bench of the Andhra Pradesh High Court on Thursday stayed the finalisation of all tenders related to major irrigation projects under Category 1 in the state. The bench also ordered the government to complete the process of empanelment of tenderers.

Bowing to the court direction, the state government has decided to issue fresh notification for the further empanelment of eligible bidders, if any.

As admitted by state finance minister K Rosaiah himself, all the contracts awarded so far to the prequalified companies under Category 1 (Rs 100-150 crore packages) will stand open for rebidding, in case any fresh applicant is found to be eligible for empanelment.

Delivering the judgement on a public interest litigation filed against the recent finalisation of tenders for the category-1 packages, the bench headed by Chief Justice Devinder Gupta observed that the waiver of certain conditions from the original eligibility criteria was done to favour certain companies.

Passing strictures against the way the state government relaxed the norms, the High Court termed the act as "blatantly arbitrary, irrational, discriminatory and suffering from malice in law".

However, the bench did not set aside the empanelment of the seven companies that were awarded contracts, but instead asked the government to issue fresh notifications and consider the cases of other applicants also. Significantly, the engineering, procurement and construction (EPC) contract method that was followed in awarding the works to the lowest bidders has been upheld by the division bench.

Putting up a brave front, the finance minister termed the lapse in applying the relaxation of norms to all as a minor technical flaw.

"Acknowledging the good intentions of the government on the speedy completion of irrigation projects, the court in a very respectable way asked us to issue fresh notification to include any eligible bidder, if any. Respecting the direction of the High Court, the government has decided to issue fresh notification without going for the second option, namely filing special leave petition(SLP)," Rosaiah said in a late evening press conference.

Rosaiah quoted the last paragraph of the operative portion of the court judgement, which goes like this:" Having regard to the facts and circumstances of the case, particularly the desire of the government to have all irrigation projects in the state completed expeditiously and within a time frame to augment irrigation potential, which is in the best interest of the state, we are of considered view that it would not be appropriate to set aside entire selection process of the pre-tender qualification, but it would be fair in case a direction is issued to the state government to issue a fresh notification inviting other agencies, if any".

Within hours of the judgement, the main opposition party in the state - Telugu Desam - demanded the resignation of the chief minister citing the court orders.

It may be recalled that the relaxation of tender norms and the EPC method adopted by the government have been criticised by the opposition TDP on grounds of corruption.

Reiterating his commitment on the completion of irrigation projects, chief minister Y S Rajasekhara Reddy said that his government would complete all the projects. "Only humans not trees face hurdles. And I will not be bowed down by such problems."

The state government had relaxed the norms after only two companies got qualified as per the original criteria. Two norms, among several other conditions, that were relaxed include that the company must be registered in the state and also have an ISO certification to become eligible to bid for category-1 packages.

Out of the total 33 bids worth over Rs 10,000 crore, 21 were awarded to the lowest bidders among the existing nine prequalified companies.

Agreements were also entered over these packages and mobilisation advance payment of Rs 250 crore was also released by the government to the companies that won the contracts. The L1 and L2 among the bidders for the remaining 12 packages have also been determined and they are also learnt to have been finalised.

The existing companies empanelled for the category-1 work packages include the joint venture of IVRCL, Maythas-NCL joint venture, Patel-Soma JV, Jayaprakash and Gayatri JV, Hindustan Construction Corporation, L&T, Progressive Constructions, Gamon India and Skanska Cementation India limited.