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G. Gurumurthy

One of the important pre-qualification criteria for the joint venture proposal was that the bidder should `preferably have demonstrable experience of marketing stainless steel products in the international arena with a global network'.

COIMBATORE, Sept. 14

JINDAL Strips Ltd, one of the aspirants for the joint venture participation in the public sector Salem Steel Plant (SSP), has been favoured through a waiver in the pre-qualification criteria for shortlisting companies, that led the company to stay in the race.

The Save Salem Steel Committee (SSSC), a joint forum of seven employees unions' of SSP, has charged that `mid-course' alterations in the eligibility criteria for screening companies evincing interests in SSP's joint venture were carried out to favour Jindal to emerge as the lone bidder.

The bidding process adopted too was changed, it said.

The first global tender, issued in 1999 inviting bids for setting up stainless steel melting facilities at SSP under joint venture with Steel Authority of India Ltd (SAIL), was handled by the company's management. But a revised tender was floated in January 2000, which incorporated a new clause for formation of the joint venture company through equity participation for the entire SSP.

It was then issued by SAIL's corporate office for `reasons better known' to it, the committee alleged.

After the revised tender, four parties — Avesta Sheffield of UK, Tata Steel-Usinor (France) combine, Jindal Strips Ltd-ALZ (Belgium) combine and Shah Alloys Ltd from Ahmedabad — which evinced interest in the project were shortlisted.

However, Avesta Sheffield withdrew from bidding. In the case of Shah Alloys, the company was found disqualified on the premise of not having tie-up with any international partner to fulfil the pre-qualification criteria.

One of the important pre-qualification criteria for the joint venture proposal was that the bidder should `preferably have demonstrable experience of marketing stainless steel products in the international arena with a global network'.

The committee further said as per the original MoU signed between SAIL and the Union Government, the shortlisting of the bidders was to be over by June 2000.

While Avesta Sheffield and Tata-Usinor combine were shortlisted in accordance with the schedule, Jindal was unable to fulfil the `pre-qualification criteria' at the stipulated time, which led it to seek extension of time.

The company, according to the committee, had produced paper showing its so-called tie-up with ALZ of Belgium `without any deed' agreement. Based on this paper, it was included in the list of companies shortlisted.

Interestingly, Usinor of France in the Tata-Usinor combine subsequent to its joining in the bidding merged with Arcelor conglomerate and after this international merger, Arcelor did not evince interest in the bidding.

Currently, Tata-Usinor combine too had withdrawn from the bidding process.

In the meanwhile, ALZ, which was said to have tied up with Jindal Strips, is involved in an amalgamation by merging its entity with Usinor of France.

This development had now left Jindal without having an international partner for `global network' and this amounted the company not fulfilling the pre-qualification criteria stipulated by SAIL, the committee said.

The SSSC, which has taken up cudgels against the privatisation of SSP, has charged that Jindal Strips was given preferential treatment from `day one' in shortlisting of bids so as to allow the latter to become the lone runner in the bidding for the SSP and wanted the Government to conduct an independent enquiry into the SSP bidding process.

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