Voltas JV To Sue Alstom Firm

Mumbai, Aug 30 | Updated: Aug 31 2004, 05:30am hrs
The Tatas are angry. And at stake is a contract relating to the worlds largest luxury liner, Queen Mary II.

Tata group airconditioning major Voltas Ltd, with its joint venture (JV) partner Aerimpianti SpA, has decided to take legal action against French marine major, Alstom Marine. They are alleging premature and wrongful termination of contract for the luxury liner.

The two partners had set up a 50:50 JV AVCO Marine SAS, which was awarded this Rs 119 crore contract. The JV is registered in France.

Confirming the move, a top Voltas official said, Voltas Ltd and its joint venture partner Aerimpianti SpA, Italy, in consortium with ABB Flakt Marine of Sweden, was awarded the contract of heating, ventilation and air-conditioning (HVAC) works for the luxury liner Queen Mary II about two years ago.

The contract was valued at Rs 156 crore, of which AVCO Marine SAS had a substantial share of Rs 119 crore, while ABB accounted for the remainder. The legal recourse will be taken by AVCO Marine SAS.

Voltas has suffered a setback due to premature and wrongful termination of a contract under execution of the companys project-specific special purpose vehile (SPV). The JV company has received around 85 per cent of the contract amount, said the official. The issue, according to him, would be taken up soon with the French Embassy as well. We cannot comment any further since the matter is sub judice, the official added.

While FE sent an emailed questionnaire on the issue, Alstom Marine officials in France declined to comment. The company is part of the French engineering major Alstom group.

It is learnt that almost 95 per cent of the work on this contract had already been completed. AVCO Marine had already approached the French courts after it received a termination on this project. Following this, the court has appointed an expert to conduct an enquiry on the issue.

At this stage, AVCO Marine SAS is in discussion with legal experts to chalk out its plan of action against Alstom Marine. All future action will be taken ensuring that the relation between the JV company and Alstom is not strained, the official added.

Voltas has executed a number of prestigious projects in various overseas markets. The companys International Operations Business Group (IOBG) is actively engaged in turnkey projects in areas like electro-mechanical, electrical power projects, environmental and water pollution control, water and waste water treatment projects.

During 2003-04, the company secured a contract of the Mall of Emirates project in Dubai, UAE. A sub-contract for HVAC works in the Republic of Maldives opened up new territory for Voltas. Working in close co-ordination with the pumps & projects business, the company secured a contract of over Rs 300 crore for a water reclamation plant in Singapore. The carry forward order book position of Voltas for the overseas electro-mechical projects under execution stood at Rs 600 crore as on March 31, 2004.