The court was dismissing writ petitions filed by an Indo-Chinese consortium of power engineering companies - CSEPDI-TRISHE Consortium - which assailed a Tangedco communication dated September 27, 2014 awarding the over 9,600-crore Ennore thermal power project to BHEL. The consortium alleged that BHEL was notorious for causing delays and cost overruns, and that the award of tender was in violation of Tamil Nadu Transparency in Tenders Act, 1998 and Rules.
Justice V Ramasubramanian, concurring with the submissions of advocate-general of Tamil Nadu A L Somayaji, cited the inherent strengths of BHEL such as its listing in Indian bourses, annual turnover, experience in having built 34 power projects in India, said: "When only two persons are left in the fray, with one having little past experience in India worthy of any assessment and the other having a long past, some of which also had its bad patches, there is no point in finding fault with the decision of the tender accepting authority in choosing the person with a huge past experience. It must be remembered that BHEL is a public sector undertaking and is rated as Maharatna company."
Justice Ramasubramanian rejected all the four grounds of challenge — procedural impropriety, public interest, wrong evaluation of the price bid and breach of confidentiality — mounted by the consortium.
As for the consortium's complaint that it had offered maximum financial benefit to the cash-strapped Tangedco and BHEL was known for its delays, Justice Ramasubramanian said: "The jurisdiction of this court to test the correctness of the decision to award tender to a party, does not extend to the arithmetic and financial jugglery. Therefore, I am unable to accept the contention that revolves around the benefit that would have accrued to Tangedco in the form of reduced rate of interest, if the tender had been awarded to the consortium."
Rejecting the arguments with respect to delays, the judge said, ", I do not think that delay by itself could have actually tilted the balance." In this regard, Justice Ramasubramanian said that established in 1964, BHEL had so far put up about 910 power sheds with installed capacity of 1,26,000MW of power, out of the total production of 2,18,000 MW in the country. In other words, more than 50% of the total installed capacity of power generation in the country, was established by BHEL. About 63% of the power generated in the country (including perhaps the power cut) is the contribution of BHEL, directly and indirectly," he said, adding that in Tamil Nadu alone it set up projects that contribute for 68% of the total generation.
BHEL has already done 18 supercritical projects, some of which were for the generation of more than 660 MW of power, he said, adding: "In contrast, the Consortium had done only three projects, and they were for the production of less than 660MW." Since the Consortium is comparatively a new entrant at least in India and their past performance is incapable of being assessed with precision, Tangedco appears to have decided not to choose the unknown angel, Justice Ramasubramanian said.
A court is concerned only with the legal soundness and not the financial soundness of the ultimate decision, he said, adding, "It appears that Tangedco fears hidden costs in the proposal of the Consortium. Today, the fear of hidden costs cannot be easily dispelled, especially in insurance and banking sectors. It is not possible for the court to adorn the role a super-specialist in the field of finance and find out which of the two offers is beneficial to Tangedco."
BHEL is a public sector undertaking and is rated as Maharatna company. In contrast, the consortium had done only three projects, and they were for the production of less than 660MW
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