Vol 3, PW 13 (24 Jul 99) Midstream & Downstream

An unseemly row is brewing over the selection of a contractor to construct a 200-MW power plant at Bidadi in Bangalore, slated for commissioning in March 2001 in a joint venture between Unocal and the Karnataka Power Corporation (KPCL).

It relates to a global tender in which bids have been received from three companies: Asea Brown Boveri (ABB); Bharat Heavy Electrical Ltd (BHEL) and Larsen & Toubro (L&T). On Wednesday (7 July) opposition politicians in the Karnataka Legislative Assembly (local state parliament) accused Karnataka chief minister JH Patel of irregularities in the tender process, an allegation he forcefully denied.

Matters have not been helped by the fact that Patel is also Chairman of KPCL and doubles as the states energy minister, lending ammunition to oppositions allegations of foul play. His critics argue he has defied strictures from the central government by holding pre-tender negotiations with ABB, the likely winner of the tender.

In India, pre-tender negotiations are discouraged because of the potential for corruption. Patel, however, argued that "merit is the only criteria" for selection of the winner and defended his decision to disqualify L&T on technical grounds, despite the fact that it offered the lowest bid.

"One should not view everything with suspicion" said Patel, "KPCL's integrity is known and accepted the world over".