Madras High Court warns Tangedco over coal import tender


By LE Desk

Chennai, March 12: The Madras High Court on Thursday warned the Tamil Nadu Generation and Distribution Corporation (Tangedco) that it would not hesitate to quash a ₹1,330 crore worth tender notification issued by it on February 8 for supply of 20 lakh tonnes of imported steam coal of any origin if it finds evidence of any foul-play.

The court permitted a public interest litigant to file additional materials in support of his allegations and directed Tangedco to be ready with its response by next week.

The First Division Bench of Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy, in an interim order, stated that it was easy for anyone to hint at a corrupt practice and raise an atmosphere of suspicion. However, it was a completely different thing to produce hard facts before the court to establish the charges, The Hindu reported.

In the present case, the consistent practice followed by Tangedco of inviting bids for high value tenders at a short notice certainly arouses suspicion, the judges said.

Further, observing that public sector units must be given a degree of elbow room to function freely, the judges said, nevertheless, such a play in the joints could not be used as an excuse by the government establishments to run riot and cause loss to the public exchequer or allow a group of persons to benefit unduly from government tenders. The judges also took serious note of Tangedco having come under adverse notice of the Comptroller and Auditor General (CAG) in 2017.

The PIL petition had been filed by C. Selvaraj, 70, a retired assistant engineer of the Tamil Nadu Electricity Board (TNEB) who had also served as general secretary of a TNEB engineers association for many years. Senior Counsel K.M. Vijayan, assisted by E. Vijay Anand, appeared on his behalf and insisted upon ordering a joint probe by the Directorate of Revenue Intelligence (DRI), Central Vigilance Commission (CVC) and Directorate of Vigilance and Anti-Corruption (DVAC) into the alleged scam in import of coal for thermal power stations.

Vijayan told the court that Tangedco had initially given just 15 days’ time for submission of bids, for supply of 20 lakh tonnes of imported coal, as against the requisite minimum duration of 30 days. When it was challenged by a private company before a single judge of the High Court, Tangedco issued a corrigendum and extended the period by 15 more days. Further, the tender clauses had been authored cleverly to favour participation of only foreign suppliers, he claimed.

Referring to the requirement that the bidders should possess export licences issued by the country from where the coal would be procured, he said no Indian supplier could be expected to be in possession of export licence from foreign countries. He also said that Tangedco had a chequered history of having caused huge loss to the public exchequer by importing steam coal at high costs to run domestic thermal power stations and therefore it should not be allowed to go ahead with the present import. 

He pointed out that the CAG, in its 2017 report, had found that an avoidable expenditure of ₹746.13 crore had been incurred by Tangedco since it had not invited and evaluated the bids for import of coal on variable price method. The report had also stated that the failure to independently verify the correctness of gross calorific value furnished by the supplier resulted in undue benefit to the extent of ₹813.68 crore to the supplier.

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