VA Tech Wabag moves High Court against Delhi Jal Board debar order

P Manoj Mumbai | Updated on October 28, 2020

Utility cites breach of contract conditions; firm says uncleared dues the issue

The Delhi Jal Board has debarred Chennai-based VA Tech Wabag Ltd for three years from participating directly or indirectly in any projects, works, tenders of the water utility.

Wabag has filed a writ petition in the Delhi High Court against the debarment, a company spokesman said.

VA Tech Wabag is one of the world’s top water treatment companies with presence in four continents and is listed on the Bombay Stock Exchange.

The debarment follows what the Jal Board called “fundamental breaches to the contract agreement and poor operation and maintenance (O&M) performance” on the 45 million gallons per day (MGD) sewage treatment plant (STP) at Kondli, Delhi, that was awarded to Tech Wabag in June 2008 on a design, build and operate basis.

BusinessLine has reviewed a copy of the debarment letter that was issued on October 15.

Wabag said the Delhi Jal Board has not performed its contractual obligations and the main dispute was over “non-payment of dues” for five years.

“Two months ago, Wabag issued a termination notice to DJB on the contract. But, instead of accepting the dispute, DJB has arbitrarily issued a debarment letter,” the spokesman for Wabag said.

Among the reasons cited by the Delhi Jal Board to debar the firm include failure to achieve the “treated effluent parameter” stipulated in the agreement and also for failure to “operate and maintain the plant as per the SOP”.

VA Tech Wabag “miserably failed to maintain the electrical and mechanical equipment installed at the STP and observed that more than 40 per cent of major E&M equipment are out of order. The power generation through bio-gas by the company was never found stable during the O&M period”.

DJB also cited occasions where “no deployment of O&M staff was found even at critical units like inlet works/primary units making the plant dysfunctional. This led to overflow and consequent scattering of raw sewage inside STP premises and adjoining residential colony creating unhygienic conditions”.

During a surprise inspection, DJB also recorded that Wabag was allegedly “bypassing the untreated sewage/sludge into river Yamuna thereby clearly violating the conditions of contract agreement and also direction of the National Green Tribunal”.

“DJB had viewed it very seriously and communicated the same to Delhi Pollution Control Committee (DPCC) for necessary action against the Executing Agency for bypassing the untreated sewage which is against the Environment (Protection) Act”, the Board said.

“DJB has suffered power loss, loss under the provisions of Environment (Protection) Act, loss of endangering life and property and reputational damages due to selected bidder's fundamental breaches to the contract agreement, and selected bidder's persistent poor performance in respect to the operation and maintenance of the STP,” the DJB added.

During a personal hearing before the DJB on September 28, Rajiv Mittal, Managing Director, VA Tech Wabag, “raised the issue of sulphide contents, excess flow at the STP, requirement of sludge beds for sludge disposal and force majeure etc”.

The firm claimed the presence of excess sulphide in raw sewage being received at STP as culprit for bad odour, corrosion of equipment, wear and tear of equipment.

Published on October 28, 2020

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