By IANS,
Lucknow: Aiming to expedite the disinvestment of public sector undertakings under its policy of infrastructure development and divestment through public private partnership (PPP), the Uttar Pradesh government Friday decided to invoke the Swiss Challenge Method for bidding, in which the proposer has the first right of refusal, officials said.
The move will not only ensure a fair deal and a level playing field for all private parties but will also impart a new dimension to successful project delivery, they added.
Under the new provision, the government may apply the Swiss Challenge Method in case the highest bid received is below the reserve/expected price but above 50 percent of the reserve/expected price of the PSU on offer for disinvestment.
This highest bid would continue to remain valid till conclusion of the Swiss Challenge process. Fresh bids, will then be invited to challenge the original highest bidder under the exactly the same terms and conditions as were applicable in the original bidding along with the disclosure of highest financial bid received, officials said.
This means that in order to be considered, all fresh bids will have to be higher than the ‘original highest bid’. However, ‘original highest bidder’ will have the right of first refusal – the opportunity to match the highest bid under the fresh process within 15 days. If the ‘original highest bidder’ does not use this option and the highest bidder in the fresh process refuses to honour his bid, his bid security will be forfeited, they added.
In case, no fresh bid is received to challenge the ‘original highest bid’, the government may consider awarding the contract/assignment at the price quoted in this bid, despite it being lower than the reserve/expected price, officials said.
The right of first refusal contained in the Swiss Challenge Method serves twin purposes. First, it encourages private participation and secondly, the contract is awarded at the best competitive price ascertained from the bids received.
The divestment process is on in Uttar Pradesh in key sectors like sugar mills and tourism.