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How the airport bids almost went wrong
Sunil Jain | November 14, 2006
With a two-judge Bench of the Supreme Court dismissing the Anil Dhirubhai Ambani Group firm Reliance Airport Developers Private Limited's petition, the last hurdle in the privatisation of the Delhi and Mumbai airports is now over.
While that's a great relief, what is curious is that the government doesn't seem particularly concerned about the role of those that very nearly got away with the brazen attempt to favour the ADAG group, not even the token departmental inquiry into individuals or blacklisting of firms involved has been ordered, that's how low the system has fallen.
And since this was not really the matter before it, the Court has not passed any strictures or asked for any investigation into their role.
As the primary judgement by Justice Arijit Pasayat points out, after the consultants (Airport Planning Ply Ltd, Amarchand Mangaldas & Suresh A Shroff & Co, and ABN Amro Asia) submitted their evaluation report, which ruled out all bidders on technical grounds except for the GMR Group and ADAG, the report was virtually rubber-stamped by the Government Review Committee whose job it was to ensure the evaluation was a fair one-as the judgement puts it, "the majority members felt that the terms had been adhered to and there had been sufficient transparency in the process. Majority of the members felt it would not be necessary to go by the advice of the member of the Planning Commission."
That is, the consultants' report, which was full of flaws, got passed, and then passed on to the Inter-Ministerial Group for its approval. Surely all the worthies in the GRC need to be asked to justify their decision? Or were these worthies just carrying out orders?
(Interestingly, the second judge, Justice SH Kapadia, gave a separate judgement where, while agreeing with Justice Pasayat, he said the basic controversy was whether the consultants-in their role as the Evaluation Committee, or EC-had exceeded their authority in the manner in which they allotted marks for various sub-criteria, and in his view, "EC had no business to expand or narrow down the scope of any of the factors as it was beyond its authority and contrary to the scoring system". Yet, none of the members of the EC has been blacklisted by the government.)
The GRC report came to the Inter-Ministerial Group, headed by civil aviation secretary Ajay Prasad on December 1, 2005. There, the Planning Commission's Gajendra Haldea gave a full note detailing how, after the bids had come in, the consultants decided to arbitrarily allot weightings given to some criteria in such a manner that this helped increase the score of the ADAG group-had this not been done, the group's firm would not have got the minimum technical marks required in order to qualify it for the next round, that is the round in which its financial bid would have been opened.
Despite this, the IMG didn't stop to say there was a problem in the way the evaluation was done, it merely passed on the decision to the Empowered Group of Ministers, headed by then Defence Minister Pranab Mukherjee on December 5, 2005.
This group, however, couldn't take any decision, either, since, thanks to Haldea, the IMG-bureaucrats hadn't been able to recommend a categorical course of action.
In the event, the EGoM directed the IMG to do another evaluation and give a clear recommendation. This time, five or six meetings of the IMG were held and, finally, by the time the IMG wrote its report, five of its members were on the side that said the scoring was biased, two (members of the law and finance ministries) said there was nothing wrong, and the chairman decided not to give a view at all.
Once again, no categorical statement was made despite the evidence being overwhelming and the majority's view well-known.
The rest, as they say, is history. The EGoM recommended the matter to a Committee of Secretaries headed by the Cabinet Secretary, which, in turn, appointed a Group of Eminent Technical Experts headed by Delhi Metro chief E Sreedharan. Sreedharan examined the issues and then lowered the marks of the ADAG firm.
Once this was done, only the GMR Group qualified on technical grounds (it had over the minimum 80 per cent marks).
The government then reduced the minimum technical marks criterion to get more bidders. GMR and GVK then emerged as the top financial bids and Reliance went to court questioning the Sreedharan Committee's locus standi and saying the reduction of the minimum technical marks was not permissible. This is the petition that has now
It is true that in this case, the system did deliver, even if after a long and tortuous period. But this was just a stroke of luck, and largely due to the doggedness of one official. A slightly more thin-skinned person, and he would quickly have fallen in line.
Not taking action is not just a travesty of justice, it simply encourages others to try and do similar things in the future. Surely that is not an impression the Manmohan Singh government wishes to have spread about itself? Especially when it is desperately trying to woo big infrastructure investment.