Exim is providing credit facility worth $640 million for three sugar-related projects in the African country. The HC, however, has stayed the disbursal of funds for now.
Uttam Sucrotech, a Delhi-based company, has dragged the Ethiopian government and Export-Import (Exim) Bank of India to the Bombay High Court over the award of a contract for a sugar factory project in Ethiopia.
Exim is providing credit facility worth $640 million for three sugar-related projects in the African country. The HC, however, has stayed the disbursal of funds for now.
Sucrotech, which is into manufacturing of sugar plant machinery and had won one of the Ethiopian projects, has objected to the contract awarded by the Tendaho Sugar Factory Project (undertaking of government of Ethiopia) to another Indian company, Overseas Infrastructure Alliance (OIA). Its contention is that the project authorities selected OIA as the Engineering, Procurementa and Construction (EPC) contractor or lead-contractor in a non-transparent and arbitrary manner. The contract for Tendaho is worth $184 million.
Exim Bank disburses funds on behalf of the Indian government to developing countries for projects to be implemented by Indian companies. According to Sucrotech, Exim Bank is required to approve contracts between foreign governments and the Indian company and to ensure that such contracts are awarded through a transparent bidding process.
In the present case, Sucrotech alleged that though original tender did not contemplate appointment of single EPC, the India ambassador to Ethiopia intervened and forced the Ethiopian authorities to select a single EPC. Indian embassy had no business interfering.
“Now OIA, which has been selected as EPC, has stepped into the shoes of Ethiopian government, and is seeking to renegotiate contract terms. In one project, OIA is seeking to replace us,” Sucrotech lawyer Sandip Marne said.
It also states that even the selection of EPC was vitiated because OIA was not the lowest bidder. Since the project is going to be funded by Exim, Sucrotech says that it is public money. At the earlier hearing, Exim has made a statement that it would not disburse any funds unless the HC orders so. The division bench of justices PB Majmudar and Amjed Sayed is slated to hear the case on September 18.
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