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Mukand move on wharf cranes may kick up controversy

Santanu Sanyal

KOLKATA, April 26

MUKAND'S proposal to change the foreign collaborator for supplying electric level luffing wharf cranes to Visakhapatnam port has kicked up a controversy.

The proposed change is being contemplated after the port authorities had issued the letter of intent (LoI) to the Indian firm.

The acceptance of Mukand's proposal by Visakhapatnam Port Trust (VPT), according to informed sources, might throw up legal issues as the tender document specifies that there could not be any post tender negotiations, particularly after the opening of the price bids.

One of the foreign firms, whose name is now being heard as a probable new collaborator of Mukand, it is learnt, did not participate (either with or without local partner) in the original tender floated by VPT. The evaluation of the credentials of this ne w collaborator therefore has to be taken up afresh by the concerned authorities.

The other foreign collaborator, whose name has also surfaced in this connection, did bid originally for the tender in partnership with another Indian firm, but was found unsuitable by VPT.

Mukand had originally teamed up with Imonesa of Spain for supplying four electric level luffing wharf cranes of 20 tonne capacity each. VPT had floated the tender in April 1999 and the techno-commercial bids were opened in July 1999.

Five firms were considered qualified by VPT. These included OBE of Japan, Kranbau (in association with WMI) of Germany, CIMMCO Birla (with Konecranes of Finland), Tata MHS and Mukand (in association with Imonesa of Spain). The price bids of these firms w ere opened in February 2000 and the Mukand-Imonesa combine was declared the lowest bidder.

Meanwhile, one of the level luffing wharf cranes earlier supplied by Mukand got involved in an accident at Vizag port, which caused the death of the crane operator. Following the accident, the award of the contract for four cranes to Mukand was delayed.

There was report of another accident at Kandla port, also involving the cranes supplied by Mukand. All this raised question on the company's ability to execute the contracts.

However, VPT eventually issued LoI to Mukand in December 2000, presumably because the foreign collaborator, Imonesa, assured technical support to the Indian partner.

The assurance of the foreign collaborator was crucial. According to the terms of the tender, Imonesa had to submit the performance bank guarantee for executing the contract in association with Mukand. This document was required to be submitted within on e month from the date of the issue of LoI.

Imonesa and Mukand were also needed to sign a joint venture within 90 days of the issue of LoI for executing the contract and defining the roles of partners.

In Janaury 2001, Mukand informed VPT that its collaboration with Imonesa had come a cropper as the Spanish firm had exited from the manufacturing of level luffing cranes.

Imonesa also informed the port authorities of their inability to submit the performance bank guarantee as well as to form a joint venture with Mukand to execute the contract.

As a result, the issue of work order was delayed as the Indian firm on its own would not qualify for the contract.

Mukand, it is learnt, has now informed VPT of its plan to tie up with either Felguera Gruias, another Spanish company, or Konecranes of Finland (earlier teamed up with CIMMCO Birla but found unsuitable) on the same terms as it had with Imonesa.

It is exactly two years now the original tender was floated by VPT. However, the process of acquisition is still not clear. As a result, the operation of the port gets affected.