• PAGE ONE
• INDEX
• HOME

Award of contract for power transmission - Opposition from Bengal Opposition

Our Bureau

CALCUTTA, March 7

THE issue of awarding a transmission package contract to a consortium of companies, instead of it being awarded to the lowest bidder Siemens, has become controversial with an opposition MLA seeking the intervention of the Chief Minister, Mr. Jyoti Basu, in the matter.

The Trinamool Congress Member in the West Bengal Legislative Assembly, Mr. Ambica Banerjee, said in a letter to Mr. Basu that OECF's role in this entire matter was tantamount to ``a brazen interference into our sovereignty''.

The letter held that even if OECF was funding the transmission project of the West Bengal State Electricity Board (WBSEB), it had no right to dictate terms as to who should get the order. Mr. Banerjee urged the State Government to reject the loan just as it had done in the case of the Rs. 800-crore World Bank loan last year.

The controversy gets a new dimension at a time when the WBSEB was expecting the chapter to get closed this week, when the legal process was expected to be over, with the judge giving his ruling either way. Siemens has taken WBSEB to court challenging its decision on the order. The WBSEB Chief, Dr. G.D. Gautama, told Business Line that there has been no Government interference in this matter.

The WBSEB, which had planned a revamp of its transmission and distribution system, had got a OECF loan for the project. The earlier estimated project cost came down from Rs. 872 crores to Rs. 570 crores. It envisaged laying of new lines, construction of 22 new sub-stations and augmentation of eight old ones.

The global tender was split into four lots. While lot no. 1 and 2, valued at Rs. 150 crores, has been awarded to RPG-KEC combine, the awarding of the next two packages valued at Rs. 350 crores ran into trouble. While Siemens (along with its German parent Siemens AG) quoted Rs. 330 crores for the job, a combine of Bharat Heavy Electricals Ltd (BHEL), Asea Brown Boveri (ABB) and Crompton Greaves (CG) Ltd quoted Rs. 366 crores.

Subsequently, it was decided to award the order to Siemens. However, the OECF (now known as JBIC _ Japanese Bank for Industrial Co-operation) raised objection to this saying that Siemens was not `responsive' enough.

The WBSEB sources explained that what the lending agency found unacceptable was a `deviation' by Siemens whereby they decided to offload the transformer portion of the order on their Indian subsidiary although they had not mentioned this earlier.

In deference to the wish of the lending agency, the WBSEB decided to award the order on a provisional basis to the BHEL-ABB-CG combine, even as Siemens took the matter to court. Mr. Banerjee said in his letter that Siemens has threatened to gradually wit hdraw from the State if it did not get justice in this case.

Commenting on the role of the State Power Department, Mr. Banerjee alleged that the entire deal smacked of some ``behind-the-curtain understanding between the State Power Department and the OECF''. He also linked the resignation of the immediate past WBS EB Chairman, Mr. Badal Sengupta, and two of his colleagues to this issue.

The Power Department could easily have gone for a fresh bidding or distributed the work to all the bidders. Instead, it chose to surrender meekly to the fancies of the Japanese agency, the letter alleged, seeking Mr. Basu's intervention to set the matter right and find out an acceptable formula in distribution of the contract.