Russian company alleges mala fide in re-tender move

CHENNAI NOV. 1. The Rs. 1,750-crore sea water desalination scheme for Chennai seems to have run into legal problems, with a Russian bidder moving the Madras High Court alleging malafide in the move to re-tender the project.

The plant was to come up at Minjur, near here, on a Design, Build, Own, Operate and Transfer basis. At the time of closure of the tender on August 27, 2003, there were only two bidders — Marsan Inc, a consortium of French and Israeli companies, and the Khrunichev State Research and Production Space Centre, represented by the First Planet Engineering. As Marsan Inc did not submit a proper bid, First Planet emerged the sole bidder. In its writ petition, the Russian company said it quoted the cost of production of 1,000 litres at less than Rs. 40, which is "the lowest price ever quoted for any water desalination plant of this magnitude in the world." It pointed out that the production cost of 1,000 litres at the Baba Atomic Research Centre was about Rs. 75.

As early as in June, the Chennai Metropolitan Water Supply and Sewerage Board was informed that the bidder was a Russian governmental body and as such the company was exempted from tender bonds or earnest money deposit requirements by the Indian Space Research Organisation as well as the Defence Ministry. It also sought a similar exemption from Metrowater.

Though Metrowater did not respond to the query, the top brass of the department "orally gave an assurance" that the EMD by the Russian company would be waived. But in September, the company came to know that Metrowater had decided to reject the tender quoted by First Planet on two grounds — one, non-submission of tender bid (EMD) and two, First Planet was the only tenderer (single tenderer). Even though the decision was not officially communicated to the bidder, the Russian company wrote to the Metrowater managing director on September 12, stating that in lieu of the EMD, a letter from the Consulate-General of Russia was enough.

It, however, gave an undertaking that it would submit the EMD, if the Government of Tamil Nadu so desired. It also pointed out that there was nothing either in the tender document or in the Tamil Nadu Transparency in Tender Act 1998 prohibiting a single tender.

Complaint to CM

When "nothing was forthcoming from Metrowater," First Planet then wrote two letters to the Chief Minister on September 15 and 19, "requesting her intervention." Though the Russian Consulate-General was given an appointment to meet the Metrowater Managing Director on September 11, he was "kept waiting for more than one hour."

The letter also requests the Chief Minister to constitute an expert committee comprising the Director of the BARC Desalination Plant at Kalpakkam, the IIT Director and a Metrowater official. The committee shall invite the Russian Government body, Khrunichec Centre, for detailed contract negotiations, it proposes.

Justice K. Govindarajan before whom the petition came up for hearing, admitted the plea and ordered notice to the Government.

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