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2024

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02

Controversial green hydrogen tender quietly cancelled by state-owned Indian Oil after High Court involvement

Author:

HydrogenInsight


 

More than 50 companies registered an interest, but only one made a final bid — an Indian Oil joint venture — apparently due to preferential tender clauses

 

State-owned Indian Oil Corporation Ltd (IOCL) has quietly cancelled a controversial green hydrogen tender after it was taken to court for alleged bias and conflict of interest.

 

While more than 50 companies had registered an interest in the tender — to build, own and operate a 10,000-tonnes-a-year green hydrogen plant at IOCL’s Panipat refinery in Haryana — only one actually submitted a bid before the November deadline: an IOCL joint venture called GH4India.

 

The Independent Green Hydrogen Producers’ Association (IGHPA) subsequently lodged a writ petition to the High Court in Delhi, accusing IOCL of stifling competitive bidding in a public procurement process due to specific tender clauses that unfairly advantaged GH4 India.

 

The writ says that the state-owned company’s tender notice of 28 August 2023 “creates a Right of First Refusal in favour of [GH4India and]... permits IOCL to not accept the lowest bid and also exempts the IOCL JV from submitting Earnest Money Deposit [ie, a deposit made to a seller that represents a buyer’s good faith to make a purchase]”.

 

It further points out that GH4India — a joint venture between IOCL, engineering firm Larsen & Toubro and Indian renewables giant ReNew — was only incorporated on 25 August 2023, implying that it was formed specifically to unfairly benefit from the tender.

 

The writ further states that “the government cannot arbitrarily choose any person it likes for entering into a commercial relationship thereby discriminating between similarly situated persons” and that “the Supreme Court has repeatedly warned against specific clauses in tenders which have the effect of favouring a single tenderer”.

 

The IGHPA — a body formed last year by six renewables companies: Azure Power, Acme Group, Fortum India, O2 Power, Sprng [sic] Energy and SunEdison Infrastructure — alleged that this favouritism contravened the principles of fair competition and jeopardized the integrity of India’s $2.4bn National Green Hydrogen Mission.

 

The High Court had accepted the IGHPA petition and had asked the Indian government, which owns 100% of IOCL, to respond.

 

Neither the IOCL nor the government has responded to requests for comments or publicly commented on the tender’s cancellation, which was not announced in the conventional sense, but quietly appeared as a “corrigendum cancellation” on the IOCL tenders website on 21 February.

 

This note offered only five words: “Tender No. RHQCC23082 stands cancelled”.

 

Details about the tender, including the offending clauses, have now been removed from the IOCL website.

 

Source:HydrogenInsight

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