PANAJI
The refusal by Jindal Steel & Power Ltd (JSPL) to honour its successful bid for an iron ore lease in Orissa and seeking more time to pay the money as part of the tender process should serve as a warning for the Goa government and the iron ore industry of the potential pitfalls that the auction process holds.
Jindal Steel and Power has had its bid security and bank guarantee to the tune of nearly Rs 40-crore forfeited by the Orissa government for having failed to pay up the money it has bid for the lease and its bid has been declared as infructuous.
JSPL had emerged as the highest bidder and were asked to deposit Rs 19.94-crore as the first installment of upfront payment which was to be paid before July 7, 2020.
However, instead of making the payment, JSPL kept raising certain queries with regard to the block area, location etc. The queries were answered and they were granted time until October 1, 2020 to make the payment with a categorical mention that on failure to do so, action as deemed proper shall be initiated against it.
However, instead of making the payment, JSPL sought another 15-20 days time without assigning any reason or expressing any intent to make such a payment.
Since the payment was not forthcoming, a show cause notice was issued to JSPL asking why its final bid based on which it was declared as the preferred bidder should not be rejected and the bid security forfeited.
In response to the show-cause notice, JSPL claimed that there were serious discrepancies in the land details as per the original lease, among other discrepancies.
However, the Orissa government rejected such contentions pointing out that the tender document for e-auction was clear that among other things each bidder should conduct its own investigation and analysis and obtain independent advice from appropriate sources as that the information given as part of the tender should not be regarded as complete, besides the bidders also have the opportunity for a site visit to ascertain for themselves the site condition, location, etc.
The Orissa government has hence rejected the bid and forfeited the security guarantees, a process which took nearly a year to complete.
