NTPC cancels Rs 700 crore gas turbine tender with Finmeccanica subsidiary

NTPC's turbine tender faces heat  

IN A bid to avoid any embarrassment from probes by investigating agency, India’s largest thermal power generator NTPC has scrapped a gas turbine tender worth over Rs 700 crore with Italian firm Ansaldo Energia SpA. Genoa-based Ansaldo Energia is a subsidiary...
of Finmeccanica, the parent company of tainted Agusta Westland. Indian defence ministry’s multi-billion chopper deal with Anglo-Italian Anglo-Italian firm Agusta Westland smacked off corruption and NTPC fearing future trouble decided to cancel the tender after it was found that the Italian firm was the lowest bidder with price of Rs 756 crore against Siemens’ Rs 780 crore.
According to a media report published in a national daily,the Maharatna company’s action prompted Italian ambassador Daniele Mancini to take up the issue with Union power ministry.
NTPC landed in a complicated situation after Italian power generator Ansaldo Energia SpA beat Siemens AG of Germany to emerge as the lowest bidder in the international tender for buying gas turbine package to renovate NTPC’s Dadri plant near Delhi.
Italian conglomerate Finnmecanica has a majority stake of 56 percent in Ansaldo, while it owns 100 percent equity in Agusta Westland.
At a time when the pricing was being firmed up, the CBI and the Joint Parliamentary Committee (JPC) began separate probes into alleged payoffs by Agusta Westland in the Rs 36 billion chopper deal.
NTPC then approached the independent external monitors for the tender, Integrity Pact. The monitor advised NTPC to seek legal opinion on whether misdeeds of one group firm should reflect on another. Following this, NTPC sought attorney general's opinion. Attorney General, the government's highest law officer, advised NTPC against straightaway placing the equipment order with Ansaldo as the cases of misdeeds against Finnmecanica were by no means lighter.
But for NTPC, it was not that easy to walk out of deal. In the meantime, the Dadri unit said replacing the plant's obsolete panels immediately was more important than replacing gas turbines. Taking advantage of the situation, the power utility decided to scrap the tender altogether citing pertinent tender clause.
Earlier, in February 2012, Ansaldo Caldaie Boilers India Pvt Ltd, a unit of Ansaldo Caldaie SpA, lost a case in the Supreme Court, challenging NTPC's decision to disqualify the firm in a Rs 22,000 crore tender for super-critical boilers.