The Hindu Business Line : Shipping dept defends dredging policy

New Delhi April 7 The Department of Shipping on Friday defended its move to keep an option open to award the dredging works to public sector units in order to try and prevent dredging companies from quoting high rates.

In some cases where dredging is to be undertaken, the cost of dredging offered by competitive bidders is far above the estimated cost and sometimes unreasonably exorbitant, it said in a statement.

In such situation, the Government should entrust the work to public sector undertakings whose cost could be determined normatively to avoid the bidders from taking "undue advantage of the pressing dredging needs of Indian ports and other organisations".

Option open

The intention in stipulating this is to keep an option open so that bidders offering exorbitant cost do not unduly burden customer organisations with unreasonably higher cost. It also said domestic dredging companies would be accorded priority over foreign firms provided they matched the lowest bid for dredging contracts.

The department said with the sector dominated by some international players and the capacity of Indian flag dredgers being inadequate, intervention of the Government is necessary to build domestic capacity. The right of first refusal would rest with the domestic bidders within 10 per cent of the lowest bid provided they agree to execute the contract at the lowest price offered by the international bidder.

The concession accorded to domestic dredging companies does not fall under the purview of its purchase preference policy and the right of first refusal is available to public and private companies.