India to blacklist China's PT Hexing, will debar it from other government contracts
3 min read . Updated: 19 Aug 2020, 04:22 PM IST- State run EESL to issue a showcase notice for black-listing, will encash smart meter contract’ bank guarantee
Home >Industry >Energy >India to blacklist China's PT Hexing, will debar it from other government contracts
NEW DELHI : India is turning the screws on PT. Hexing Technology and plans to black-list it from participating in any future government tenders, post the cancellation of a ₹344.47 crore smart meter contract.
This follows the Delhi High court’ decision on Tuesday to dismiss a petition filed by PT. Hexing Technology, seeking a stay on the encashment of its $4.08 million ( ₹30 crore) bank guarantee given to state run Energy Efficiency Services Ltd. (EESL), following the cancellation of its smart meter contract for supplying 1.5 million units.
In a related development, EESL also wants to return 9980 meters supplied by the firm, said to be owned by Hangzhou-headquartered Hexing Electrical Co in China.
This comes in the backdrop of India firming up a series of economic responses against China, following border tensions that remain unresolved. Also, India’ new public procurement rulebook calls for compulsory purchase preference to local suppliers.
“The Honourable High Court has dismissed the petition of PT. Hexing with regard to non-performance of their contract. We will proceed to initiate/take action as per the contract, including issuing a show-cause notice, as to why should the company not be black-listed?" said Saurabh Kumar, executive vice chairperson, EESL Group.
Getting black-listed post the encashment of its bank guarantee will debar PT. Hexing Technology not only from participating in future tenders floated by the central government or its agencies but also by the state government agencies.
PT Hexing could not be contacted for comments.
The PT. Hexing Technology’ petition that sought an injunction for preventing EESL from invoking and encashing its contract performance guarantee (CPG) reviewed by Mint stated, that the petitioner will, “suffer irretrievable injury as the encashment of the bank guarantees is now a ground for rejection of bids in many tenders floated by various governmental agencies and therefore would have a negative impact on the future biddings by the Petitioners thereby leading to financial loss to the Petitioners."
EESL had awarded the contract to a consortium led by PT. Hexing Technology and comprising of Pal Mohan Electronics Pvt. Ltd., and Hangzhou-headquartered Hexing Electrical Co Ltd.
Mint reported on 11 August about India’s EESL’ plan to encash the bank guarantee submitted by Indonesia-based PT Hexing.
A smart meter architecture requires a two-way communication network, control centre equipment and software applications, which enable near real-time gathering and transfer of energy usage details. The government is cautious about such equipment running the risk of being infected by a malware.
A 13 August EESL communication to PT Hexing Technology reviewed by Mint stated, “We would like to state that PT Hexing has failed to deliver the supplies as per tender conditions."
“This delay has caused substantial loss to EESL. The 9980 meters supplied by you have problematic firmware due to which data collection issues communication issues have arose," the communication said added, “Please consider this as our formal intimation for LoA annulment and forfeiture of the CPG submitted by you."
After PT Hexing’s disqualification and India’ new public procurement rulebook for compulsory purchase preference to local suppliers, the firms eligible to participate in the snap bid called by EESL for supplying 3 million meters include Genus Power Infrastructures Ltd., Larsen and Toubro and HPL Electric and Power Ltd.
The state run EESL’ move follows the government’s decision to restrict firms from countries with a shared land border from participating in bids for government procurement, without approval from competent authorities. Earlier, Uttar Pradesh Power Corp. Ltd had scrapped a consignment of Chinese smart meters, which were being procured by EESL, a joint venture set up by NTPC Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd and Power Grid Corp. of India Ltd.
EESL’s smart meter programme plans to replace 250 million conventional meters and has inked agreements for there deployment with New Delhi Municipal Corporation, Uttar Pradesh, Bihar, Haryana, Rajasthan, and Andaman and Nicobar. This will help increase debt laden discoms’ annual revenues to ₹1.38 trillion. Besides, India’s proposed Rs3.5 trillion distribution reform scheme to cut electricity losses below 12% starts with smart meters.
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