Cancel contract for Ennore expansion project: Activist

In fresh trouble for Tangedco, an activist has filed a petition with TNERC seeking to cancel the contract awarded to BGRESL for the construction of the 660 MW Ennore Thermal Power Station (ETPS) expansion project at a cost of Rs 4,442 crore calling it illegal.

The petitioner, S Neelakandan Pillai, a retired executive engineer of Tangedco also sought blacklisting of the BGRESL to prevent participation in future tenders.

The activist said that Tangedco has amended the Letter of Intent (LOL) on March 9, 2022, for reinstatement of the contract to BGR Energy Systems Limited, after cancelling the contract due to non-compliance of contractual obligations. The tender becomes invalid once it is cancelled by the client.

“At this juncture, the issue of amendment to give life to the invalid tender is an injustice to other bidders, as per the Tamil Nadu Transparency in Tenders Rule 2000, and also the system as well,” said Neelakandan.

Countering the argument by Tangedco that fresh LOI was given at the same cost, he said that Tangedco would have to bear additional interest for the amount to be incurred due to the delay attributable by the bidder, loss of generation due to project delay and excess expenditure towards the purchase of power from the open market at the high cost.

“The contractor is totally freed from this loss, without assigning any accountability for the past,” Neelakandan pointed out, and added that Tangedco had supplied a false statement to the State Legislative Assembly through the electricity minister in the policy note for the years 2020-21 and 2021-22.

BGRESL, which was awarded the contract on December 12, 2019, did not execute the performance guarantee but it was not mentioned in the policy note of 2020-21 and 2021-22. “The maximum time for payment of the performance guarantee was up to 30 days, but Tangedco cancelled the LOI after 16 months,” he averred.

Order from the Ministry of Finance on the reduced performance guarantee was issued only on November 12, 2020. “As per the condition put forth in the MoF, allowing a reduction in performance security is in no way applicable to the contractor BGRESL,” he said.