INDIA BUSINESS WORLD - JUNE - JULY - 2007
The Month that was ...

SC EXTENDS STAY ON BIDDING FOR NAVI MUMBAI-MUMBAI LINK

IN A relief to Anil Ambani group firm Reliance Energy (REL), the Supreme Court on June 25 extended the stay on the bidding process for the over Rs 2,600-crore sea link expressway between Mumbai and Navi Mumbai.

Incidentally, Mukesh Ambani-led Sea King Infrastructure is the front-runner to bag the project.

Hearing a petition by REL, a bench headed by Justice Tarun Chatterjee extended the stay granted by Bombay High Court restraining Maharashtra State Road Development Corp from opening the bids for the project. The apex court extended the interim stay till July 24, the next date of hearing. The high court had, on June 4, stayed the opening of bids till July 2.

Public sector MSRDC is the nodal agency for implementing the 22.5-km project, the country's longest sea link scheme that would reduce travelling time between Mumbai and Navi Mumbai.

A consortium led by REL, which includes Hyundai Engineering & Construction Company, has challenged MSRDC's decision to disqualify it from the bidding for the Mumbai Trans Harbour Link project.

The REL-Hyundai consortium, one of the strongest in the field of engineering and construction, was disqualified on technical grounds of not meeting financial qualifications.

According to REL, MSRDC had disqualified the consortium on the ground that its major partner Hyundai did not meet the criterion of Rs 200 crore net worth.

Seeking to set aside the MSRDC decision, REL counsels Abhishek Manu Singhvi, S Ganesh and Syed Naqvi argued the company's net worth was more than the requirement for the consortium. Later, REL provided all clarifications to MSRDC, including opinion from leading accounting experts which, according to it, clearly brought out that the Reliance Energy-led consortium appropriately met all the criteria.

Against MSRDC's decision, the REL-led consortium filed a writ petition in Bombay High Court in October 2006. The high court on June 4 decided in favour of MSRDC, although it noted that "the process undertaken by MSRDC disqualifying the REL-led consortium may be termed as 'arbitrary' as the authorities are unable to substantiate their decisions".

In the Supreme Court, REL sought a direction to Maharashtra government to allow the consortium to participate in the second stage of the bidding process and issue request for proposal documents for the project.