NTPC restrained from proceeding with tender for Odisha coal mine

The Supreme Court on Thursday restrained NTPC from proceeding with its tender process for operation and development of Dulanga coal mine in Odisha. A bench headed by Justice Dipak Misra reserved its judgment on Montecarlo’s appeal against the

NTPC’s decision to reject its techno-commercial bid for the project. However, it stayed till further orders the Delhi High Court’s September 30 ruling that upheld the PSU’s decision to reject the bid of the private firm on the ground that there would be loss of public revenue if a coal block is not operated properly.

Challenging the HC’s decision, senior counsel P Chidambaram, representing Montecarlo, said the NTPC’s August 29, 2016 communication rejecting its techno-commercial bid was “arbitrary,” “unreasonable” and contrary to the terms of tender document.

He claimed that the private company engaged in the business of mining of coal and lignite possessed all the required experience in drilling, but NTPC rejected its proposal on the ground that it did not meet the qualifying requirements in this regard.

Montecarlo further alleged that in the tender document, the qualifying requirement was about the bidder’s experience only in drilling, excavation and hauling, and not blasting or drilling for blasting purposes as claimed by NTPC, which had issued separate invitations for bids for development and operation of three coal mines in Odisha-Dulanga coal block, Chhati Bariatu and Talaipalli.

According to the company, the scope of work for Dulanga mines project, which was taken into account in evaluating its technical proposal, was not part of the tender document and hence, absolutely incorrect for NTPC to have shut it out at the threshold stage. Besides,

the PSU had emphasised that in certain lignite deposits blast hole drilling is normally required.

However, senior counsel Vikas Singh, appearing for NTPC, said the PSU’s decision was in conformity with larger public interest of selecting the most suitable operator on the basis of competitive bidding.

Stating that experience in drilling for the purpose of blasting was a necessary qualifying requirement, he said the drilling in this context would mean blast hole drilling and not just drilling bore holes for putting water for softening harder strata of overburden or lignite. Besides, NTPC’s technical evaluation committee had gone into the feasibility and viability of full operation while rejecting the firm’s proposal.