Red Mud Pond-2 Construction: Winning Bidder’s Experience Muddle Puts Nalco In Dock

Bhubaneswar: Under the lens for alleged irregularities and favouritism in granting contract worth Rs 225 crore to a private company for construction of Red Mud Pond-2 at Damanjodi in Koraput, the National Aluminium Company Limited (Nalco) treated work executed by an individual as a sole proprietor and subsequently as managing partner of a partnership firm as the company’s experience to award the tender, said documents accessed by Odisha Bytes.

According to documents, the PSU chose to accept the work executed by T Srinivasa Rao as an individual proprietor and experience certificate issued in his name as managing partner of M/s Mythri Infra as experience of the partnership firm. In December 2019, M/s Mythri Infra, a partnership firm, was incorporated as a private limited company named M/s Mythri Infrastructure and Mining India Private Limited (MIMIPL).

What has reinforced allegations of wrongdoing and possible tender fixing by the central PSU is the fact that it rejected six – Odisha Construction Corporation Limited (a government of Odisha enterprise); NCC Limited; UBV Infrastructures Limited; HES Infra Private Limited; Raghava Constructions (India) Private Limited; and, Sri Raja Rajeswari Constructions (India) Private Limited – of the eight applicants on technical grounds but chose MIMIPL to do the job though it did not have the requisite experience for the purpose. Instead, the aluminium major based its decision upon a legal opinion and considered the experience of T Srinivasa Rao as a proprietor and then as managing partner of Mythri Infra as MIMIPL’s experience. The company submitted “work completion certificate issued in the name of T Srinivasa Rao, managing partner of Mythri Infra, for executing Red Mud storage dam project…..under main contractor M/s K V Mohana Rao & Co. Private Limited for M/s Utkal Alumina International Limited, Rayagada”, said an official document.

“Legal opinions can vary. When Nalco rejected six other bidders on technical grounds without giving them an opportunity to clarify, why was it so lenient to MIMPL?” asked an industry insider acquainted with the subject.

MIMIPL and M/s BSR Infratech India Ltd were declared technically qualified and allowed to participate in e-auction. The former was awarded the work on the basis of being L1. MIMIPL had previously bagged other projects of Nalco as well.

On February 7, 2022, Odisha Bytes broke the news of gross irregularities in the award of the tender with a quoted price of Rs 225.79 crore to the Andhra Pradesh-based company. Apart from allegations of irregularities in the process of selection, Nalco filing a caveat application in court against all disqualified contractors although none of them had lodged an oral or written with the PSU has also created suspicion of foul play. Nalco awarded the contract at about eight per cent higher rate than its estimate.

Seeking Nalco’s reactions on this issue, Odisha Bytes sent to the company’s General Manager, Corporate Communication and Public Relations, Lalatendu Das, the following questions:

• Why did the company accept work executed as an individual proprietor by the managing partner of MIMIPL as the company’s experience so as to enable it to meet the technical requirements mentioned in the tender document?

• Does Nalco seek legal opinion during award of all tenders?

• Why did Nalco file a caveat application in court against all disqualified contractors? That too without any provocation from any contractor? Does the company follow this practice while awarding all tenders?

Das did not give specific answers to the queries and replied: “As a reputed Navratna CPSE of the country, Nalco believes in utmost transparency and good governance practices. Nalco has been awarding the contracts following due procedures and guidelines. The said contract that you have been referring to has also been examined by external authorities and no irregularity has taken place. As a responsible public listed company, we highly value our stakeholders and therefore, would like you to advise caution before publishing such news which are not based on facts.”

Also Read: Red Mud Pond-2 Construction: Nalco Under Cloud Over Grant of Rs 225-Cr Tender