The Uttarakhand High Court has ordered cancellation of two hydropower project contracts of the GVK-L&T consortium and awarded one of them to Reliance Infrastructure Ltd.
The High Court said awarding of the 200 MW Mapang Bogudiyar and 170-MW Bogudiyar Sirkari Bhyol projects in favour of GVK-L&T was utterly mala fide.
The court said that “We have no other option but to hold that financial bids given by GVK in respect of the said projects are to be ignored for the same have no value at all in the eyes of law.”
A GVK Power & Infrastructure spokesperson said the company would study the court judgment and seek review at an appropriate forum.
Three years ago, Reliance Infrastructure had challenged the award of the contracts to GVK-L&T consortium saying that it did not meet the qualifying criteria.
As per auction guidelines GVK, the lead player in the consortium, was required to own 26% in the consortium, whereas it held 11% and 14%.
The state government had relaxed mandatory bid conditions of net worth and net cash accrual for GVK-L&T on the condition that the consortium partners will develop the projects together.
Uttarakhand High Court decided to scrap the contracts after it found that L&T left the consortium after submission of application by the consortium. The court upheld a November 2010 single bench judgement that said such relaxation of essential conditions by state government was arbitrary, unreasonable and discriminatory and ordered cancellation of Mapang Bogudiyar project contract.
Src – Steel Guru