Court stays revocation of Chenab hydro project to L&T

By Sanjay Singh, IANS,

New Delhi : The Himachal Pradesh High Court has restrained the state government from taking any further action on its move to revoke the award of the 420-MW Reoli Dugli Hydro Electric Project to Larsen and Toubro and call for fresh bids.

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The court said no further steps be taken by the state government till further orders, based on the writ petition filed by L&T Power Development Ltd that was named winner of the project in October.

The large project has been proposed on a build, own, operate and transfer basis in the Chenab Valley, for which several firms had tendered their bids. These included Moser Baer, Jindal Steel, Tata Power, Essar Power and Piramal Healthcare.

Among them, Moser Baer had emerged the original winner, based on its offer of 14.41 percent additional free power to the state, over and above the royalty rates of 12 percent, 18 percent and 30 percent over three time bands.

The company, however, withdrew its bid, following which the others were given the choice to match the winning bid. In the event of more than one bid matching Moser Baer’s offer, the winner was to be the one originally closest to the successful bid.

Subsequently, the state government confirmed to Larsen and Toubro that it had been declared winner, based on its offer of 12.9 percent additional power, and an upfront premium of Rs.84 crore was duly submitted.

But a meeting of the state cabinet Nov 23 decided to call for fresh bids based on a new hydro-electric power policy.

“Therefore, the allotment of Reoli Dugli 420-MW Hydro Electric Project made in favour of L&T Power Development Ltd, dated Oct 30, is hearby cancelled without any right and liability against the state government,” said the cabinet note.

Larsen and Toubro took exception to what it termed as a biased decision that vitiated its own allotment process.

“Such unilateral cancellation of the allotment based on some media reports and likelihood of a better offer is not in accordance with the principals of natural justice,” said its petition to the high court.