Bharat Heavy Electricals Ltd has received its second major setback in Tamil Nadu. The Madras High Court recently cancelled the Rs.9,207-crore EPC contract awarded to BHEL by project developer Tamil Nadu Generation & Distribution Corporation relating to the 1,320-mw Ennore supercritical power project. The cancellation was the result of the High Court upholding a writ petition filed by a consortium of Indian company Trishe Energy Infrastructure Services, and China-based Central Southern China Electric Power Design Institute. The Trishe-CSEPDI consortium and BHEL were the only two bidders for the project.
The High Court has directed Tangedco to reconsider the bids of BHEL and the consortium strictly in accordance with law and Tamil Nadu Transparency in Tenders, 1998. The consortium maintained that BHEL should have been disqualified from the bidding process as it had delayed earlier projects of Tangedco involving 7,300 mw of capacity and an investment of Rs.27,000 crore, in Tamil Nadu. Besides, the price bid of BHEL was Rs.1,200 crore higher than that of the other bidder.
In mid-July 2014, the Trishe-CSCEPDI consortium moved High Court for fair assessment of bids. By the end of the same month, the Madras High Court directed Tangedco to reconsider its representation. However, on August 7, Tangedco filed an appeal challenging the order and on August 19, the order was modified. Tangedco ultimately awarded the project to BHEL on September 27, 2014. On October 14, 2015, the consortium once again moved Madras High Court. On April 7, 2015, a single judge dismissed the plea made by the consortium. The consortium once again appealed before the division bench on April 20, 2015, and ultimately won the appeal on September 7, 2015.
Second setback: In March this year, the bidding process of another project of Tangedco—the 1,320-mw Udangudi supercritical power project—was cancelled. A consultant appointed by Tangedco observed that the bids put in by the only two bidders—one being BHEL—were defective. The much-delayed Udangudi project was to be set up in joint venture between Tamil Nadu Electricity Board (not yet bifurcated then) and BHEL. In fact, it was to be the first project where BHEL would have equity stake. BHEL was deemed to be the EPC contractor for the project that would involve supercritical power equipment. However, in 2012, the TN government scrapped the joint venture and maintained that it would do the project on its own. Accordingly, tenders were floated in 2013 and BHEL bid for the project.
It is interesting to note that in both the Ennore and Udangudi projects, the only two bidders in fray were BHEL and the Trishe-CSEPDI consortium.