HYDERABAD: In a setback to the Andhra Pradesh government’s plan of getting its new capital in Amaravati constructed through a Singapore consortium, Justice M S Ramachandra Rao of the Hyderabad High Court on Monday stayed the process, citing several irregularities.
Nearly two-and-half years after the division of Andhra Pradesh, the state’s move to construct a small portion of the core area of its capital suffered a setback as the court observed that the state was acting in a non-transparent manner and the tender process was full of procedural irregularities and in violation of the Infrastructure Development Act.
The court said the state was going against the spirit of the very Swiss Challenge method under which it proposes to construct its capital. With this stay, the September 13 deadline fixed by the government for receiving counter bids to the Singapore consortium from other contenders will stand nullified and the consequent meeting with the bidders too has to be cancelled.
The judge pronounced this interim order after hearing two petitioner firms, Aditya Housing Company and Envian Engineering Pvt Ltd, which charged the state with acting with a pre-determined mind to hand over the contract to the Singapore consortium.They told the court that the conditions prescribed suit only the Singapore firm and no Indian builder would even qualify for it. Attorney general Mukul Rohatgi, who appeared for the state and Capital Region Development Authority (CRDA), told the HC that the capital construction was not the job of a mere builder and that no Indian company would be able to take it up.
“Of course, there are exceptions like L&T,” he said and added that the construction major was one of the bidders, and it did not raise any objection to the tender process.”These Indian builders have become more of defaulters rather than good builders,” he said citing the Supreme Court’s anguish against such builders in various cases.
The judge, in his order, said though this method calls for disclosing the proposal put forward by the Singapore consortium and invite ‘challenges’ from the competitors, the decision of the state to not reveal the revenue sharing model offered by the consortium deprived the interested parties of making a counter challenge. Under the Swiss Challenge method, the CRDA should receive the proposal from the original project proponent, it should then be referred to the infrastructure authority and then to the state government.
“But in this case, the state acted in a reverse manner in processing the Singapore proposal. It started at the highest level of the state government and later reached the CRDA. Because of this top-down approach, the authorities were deprived of an opportunity to assess the capacity of the Singapore consortium,” the judge said.
“Though the Swiss Challenge method allows the core information about the first proponent to be kept confidential, the state’s action in keeping even the revenue sharing details under confidential category or proprietary information category is not prima facie correct and they should not be kept confidential. Special trade secrets or intellectual property can fall under proprietary information, but not the revenue sharing details,” the judge said.
The state contending that even it does not know the Singapore consortium’s offer, but maintaining at the same time that it is a good proposal, is strange and also goes against the provisions of the Infrastructure Act and these details should be disclosed to the contending firms upfront. In the absence of these details, the contenders cannot come forward with ‘meaningful challenges.’ Moreover, the judge said, the state has fixed very short timelines for the contending firms to challenge the consortium’s offer.”This does not provide a level-playing field to interested applicants. Hence, the actions of the authorities suffer from illegality and procedural impropriety apart from jeopardizing public interest,” Justice Ramachandra Rao said.
Stating that he was aware of the norm that courts should not intervene in the tender process, the judge said this is an exceptional case and stayed the ongoing tender process and directed the government to file its counter and posted the case to October 31.
Credits ET Realty