The Hindu : Front Page : Pre-qualification bidding for metro rail cleared

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Wednesday, Jul 29, 2009
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Pre-qualification bidding for metro rail cleared

Legal Correspondent

HYDERABAD: Justice G. Rohini of the High Court on Tuesday made it clear that the government could proceed with pre-qualification bidding process for awarding the Hyderabad Metro Rail Project and posted the matter for August 11.

The judge was hearing the case filed by Maytas Metro Ltd., represented by its Director Bandaru Narasimha Rao challenging the action of the State government in cancellation of contract awarded to it as also the encashment of deposits made by it. The case comes in the light of the government’s decision to scrap the contract awarded to Maytas consortium.

In the process, the government forfeited Rs.71 crore -- Rs.60 crore bid security amount together with Rs.11 crore paid as part of the bid offer -- which was disputed by the petitioner. Maytas Metro Ltd. contended that the contract could not be cancelled without any prior notice to it.

The government, however, said the issue of prior notice would arise when the financial closure was achieved, but the petitioner failed to fulfil the requirement. The judge granted status quo on the orders (GO 430) issued by the government terminating the concession agreement with Maytas, but refused to stay the new tender process.

In a press release, the government has said the court was informed there was proper application of mind in terminating the agreement as the firm had defaulted in fulfilling obligations under the agreement. It also pointed out that no stay was granted on the fresh bidding process.

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