Metro Link Express for Gandhinagar and Ahmedabad: China Railways Rolling Stock disqualified

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New Delhi | Published: November 22, 2017 2:00:06 AM

A bench headed by Chief Justice Dipak Misra upheld the Gujarat High Court's order that dismissed the CRRC's plea on the grounds that it did not provide adequate information to queries, including audited financial statements of one of its subsidiary companies, raised by the scrutiny committee.

The Supreme Court has upheld the Metro-Link Express for Gandhinagar and Ahmedabad’s (MEGA) decision to disqualify China’s state-run rail company. (Image of under construction Ahmedabad Metro)

The Supreme Court has upheld the Metro-Link Express for Gandhinagar and Ahmedabad’s (MEGA) decision to disqualify China’s state-run rail company, China Railway Rolling Stock Corporation (CRRC), from manufacturing 96 coaches for the city’s 10,733-crore metro rail project. A bench headed by Chief Justice Dipak Misra upheld the Gujarat High Court’s order that dismissed the CRRC’s plea on the grounds that it did not provide adequate information to queries, including audited financial statements of one of its subsidiary companies, raised by the scrutiny committee. Senior counsel Gopal Subramanium, appearing for CRRC, said that MEGA had ‘malafide intent’ to oust the Chinese consortium from the tender process even after it had submitted all the necessary documents, including audited standalone financial statements for 2011-14 of CNR Corporation as well as of CSR Corporation and audited financial statements of M/s CRRC Corporation for 2015. Claiming to be one of the world’s largest and oldest supplier of rail transport equipment, CRRC argued that if all the financial bids were opened, its bids would be far lower than its competitors, resulting in colossal savings to the public exchequer of about Rs 300 crore in precious foreign exchange. Further, the company stated that ‘it is in the best interests of the general public as well as the beneficiaries of the metro project that MEGA not cherry pick frivolous technical grounds to oust a competitive bidder.’

MEGA has reportedly now awarded the Rs 1,025-crore contract for manufacturing 96 Metro coaches to South Korean rolling stock manufacturer M/S Hyundai Rotem, a company which has been allegedly blacklisted by the Delhi Metro Rail Corporation for 5 years, according to CRRC, a consortium of two state-run companies — CSR Corporation and CNR Corporation. MEGA had invited bids for the system’s rolling stock in January 2016 and received bids from four consortia of Bombardier Transportation India & Bombardier Transportation, Hyundai Rotem Company (HRC) and a consortium of Alstom Transport India and Alstom Transport. Three of these were found to be substantially meeting the requirement of eligibility criteria. The fourth bidder, CRRC was adjudged ineligible as it was not fulfiling the technical and financial eligibility.

After the bids were submitted, MEGA authorities had raised certain queries with CRRC for audited financial statements of one of its subsidiary companies. The audited statements were supplied, but it was in Chinese. Though the railway vehicle manufacturer promised to provide statements in English as sought by MEGA, it did not submit them in time. Further, the Chinese company could not satisfy the panel about the history of litigation and non-performance on certain projects regarding its subsidiaries. While CRRC had moved the HC, it was later in May that the SC ordered MEGA to consider CRRC’s bid on the ground of experience. However, in June, MEGA disqualified CRRC from bidding on the ground that the company failed to supply information on certain aspects. CRRC again moved the HC, which rejected its plea. While dismissing the petition, the HC said that ‘it is a very important project and in the larger public interest, and therefore, any further delay would not only affect the public interest but would also be against scheduled progress and due to escalation clause, more amount than the estimated cost would have to be incurred…The project has been sufficiently delayed because of litigation initiated by the petitioner.”

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