The government’s attempt to sell the technology of Bharat Pumps and Compressors (BPC), which is under the process of closure, may hit the wall as the highest bidder, Vasavi Power Services breached the tender norms.
BPC manufactures heavy duty pumps and compressors, CNG gas cylinders, cascades to oil refineries, petrochemicals, chemicals, fertiliser, and downstream industries.
The company had stopped production and was slated for closure in 2021.
MSTC’s auction of BPCL tech
The government had appointed MSTC Ltd, a government owned e-commerce service provider, to auction the critical technology used by BPC.
In August, MSTC had floated online tender seeking interest from India Inc for use of BPC technology. The bidding process was completed with eight companies placing financial bids.
Winners of the auction
However, lesser known Vasavi Power Services won the bid by quoting just ₹2 lakh more than the second highest bidder, Kirloskar Ebara Pumps (KEPL).
While Vasavi had placed a bid of ₹27.02 crore, KEPL and Centrif had placed a bid of ₹27 crore and ₹20.22 crore.
WPIL Ltd was the fourth highest bidder at ₹15.22 crore, sources said.
Breaking auction norms
As a part of the tender condition, MSTC had created a wallet to pay for Earnest Money Deposit (EMD) and made it clear that money into the wallet should be added by the bidder and not by a third party, on his behalf.
However, sources said Vasavi Power Services, through a third part company, Allox Infra transferred about ₹7 crore to the wallet and requested MSTC to adjust it against the 25 per cent to be paid as security deposit, said one of the bidders in the auction.
Transfer of money into the wallet through a third party account is a clear breach of auction norms, he added.
An email sent to Vasavi Power Services remained unanswered till the time of going to press.
The technology being sold is critical due to its application in Atomic Energy and Nuclear power, said a bidder.
Such a sale may look like monetary profit on the face of it but the strategic risk of such technology falling in wrong hands with all the installed base and details of all the key strategic locations and sectors will be dangerous, he added.