The Supreme Court has stayed the July 27 order of the Karnataka High Court, which directed the Bharat Heavy Electricals Ltd (BHEL) to reconsider its decision of awarding a Rs 400-crore tender for setting up an ash handling plant to Kolkata-based BTL EPC, which had a consortium agreement with Chinese firm Fujian Longking.
The Bench led by Chief Justice of India D.Y. Chandrachud recently upheld the BHEL tender given to BTL in September 2022, stating that the Kolkata-based bidder has already carried out substantial work on the project and the High Court verdict, if implemented now, would cause difficulty in the implementation of the contract.
The High Court had directed the BHEL on July 27 to consider the bid by another Noida-based bidder Macawber Beekay for the ash handling plant as part of installation of Telangana State Power Generation Company’s 4,000 MW thermal power station being set up at Yadadri in Nalgonda district.
The Apex Court, while rejecting Macawberhad’s stand of BTL EPC failing to meet the technical requirement as eligibility issue, observed that the same was to be determined by BHEL itself.
The Bench said it did not find any breach as the Finance Ministry in 2021 had clarified that its earlier office memorandum will not affect the procurement of goods and services.
It further observed that Fujian Longking Co Ltd did not have any equity in the bidding process and that the said position was admitted by all the parties.
Setting aside the High Court Judgment, the Apex Court allowed the Special Leave Petition.
Senior Advocate Gourab Banerji, led by Advocate-on-Record Mayuri Raghuvanshi, apprised the Apex Court that the successful bidder BTL EPC Ltd has completed more than 80 percent of mechanical engineering and that supply of around Rs 50 crore have been moved.
Since the designs and drawings were vendor specific, the entire Ash Handling Plant (AHP) would have to be redesigned if the whole tender process was reinitiated and this would lead to the loss of public money to the tune of Rs 3,54 crore.
The petitioner contended that the High Court passed the verdict based on erroneous reading of the fact that BTL EPC Ltd did not submit a standalone bid, but a bid by a consortium of BTL EPC Ltd and Fujian Longking Co Ltd (Chinese Associate), wherein Fujian Longking Co Ltd ws only service provider for designs of Ash Handling Plant to BTL EPC Ltd.
The counsels contended that Yadadri project was expected to meet the daily requirement of one-third of the State of Telangana and greatly benefit the agriculture capacity of the state as the ongoing and future lift irrigation schemes were likely to increase the load demand to 8.7 GW.
They said the total value of the project order awarded to BHEL was Rs 2,03,79 crore. BHEL was obligated to complete Stage 1 (Unit 1 & 2) by December 2023 and Stage 2 (Unit 3, 4 & 5) progressively by December 2024.
They further submitted that as per the law laid by the Supreme Court, the ambit of judicial review in the tender allotment process was very limited.