Advantage Megha in BHEL versus Oil India
Second-ranked bidder Bharat Heavy Electricals (BHEL) has lost a court battle against Oil India over a five-rig contract awarded to Megha Engineering in June 2022.
On April 21 (2023), the Gauhati high court ruled for Oil India and Megha in the case. "This writ petition fails, and the same is dismissed," Justice Kalyan Rai Surana ruled in his 25-page judgement against state-owned BHEL.
On June 28 (2022), Oil India issued Megha an LoA for five 2000-hp VFD top-drive rigs after the Hyderabad-based company ranked first and BHEL ranked second in bidding. German manufacturer Bentec also bid but later withdrew, citing difficulties with facilities in Ukraine following Russia's invasion on February 24 (2022).
BHEL initially contested Megha's win by writing to Oil India and approaching the company's Independent External Monitors (IEMs). It later approached the court, arguing that the LoA should be cancelled because Megha's subsidiary, Italy-based Drillmec SPA, had been banned from bidding.
BHEL accused Oil India of awarding the LoA to Megha in total disregard of the "guidelines on debarment of firms from bidding dated November 2 (2021)" issued by the finance ministry. Oil India banned Drillmec for three years, from November 9 (2021), later reduced to one year up to November 8 (2022).
BHEL contends that Drillmec is an "allied firm" of Megha which should be disqualified since Oil India opened the techno-commercial bid during the ban period on December 15 (2021). "Despite the pendency of proceeding before the IEMs, respondent No 1 (Oil India) hurriedly issued the LoA in favour of respondent No 2 (Megha)," argues BHEL in its petition.
In the end, however, BHEL couldn't convince the court. "The petitioner has not been able to make out a case for interference in the award of tender in question by respondent No 1 (Oil India) to respondent No 2 (Megha)," concludes the judgement.
Still unclear is if BHEL will appeal to a higher bench or even the Supreme Court. Meanwhile, Oil India is confident it will get its new Megha rigs on time.
One senior source stresses that despite the court challenge, there is no delay in Megha's rig delivery schedule for Oil India. "In any case, the rigs are not due until later this year (2023)," he says.