Naidu’s swiss challenge method for Amaravati challenged by former Chief Secretary

A contract awarded to a Singapore based consortium under the Swiss Challenge method, for the development of part of the State’s new Capital has been challenged by former Chief Secretary IYR Krishna Rao..The petitioner’s main contentions are that basic principles of a ‘Swiss Challenge’ were inapplicable in this case, the original project proponent (OPP) was unduly favoured by the government, and serious doubts as to the integrity of one of the partners in the consortium exist..What is a Swiss Challenge.A Swiss challenge is one of the methods by which a Government project can be executed. The pre-requites are that an innovative and unsolicited proposal be presented suo-moto by a third party to the Government. The Government is then required to make details of the project, including the cost of execution, as submitted by the proponent public, and invite competitors to provide an alternative..If a better proposal (in most cases meaning lower cost) is received by Government, the original proponent will then have a right to match it..The Instant Case .It is the argument of the petitioner in this case that the original proposal was neither unsolicited nor original. The AP Government had issued a press release on May, 4, 2015 stating that it had approved the ‘Swiss Challenge Method’ for the selection of master developer for seed capital area in the new capital city..The Singapore-based consortium comprising two entities – Sembcorp Development Ltd and AscendasPte Ltd, submitted a proposal to the government, for the development of the seed capital area on October, 30, 2017..What is interesting to note is that the Singapore Government had signed a Memorandum of Understanding (MoU) with the Government of AP on December, 8, 2014, for the purpose of developing a world class capital city for the State of Andhra Pradesh. Under the MoU, Singapore was slated to prepare a master plan for building the new capital of Andhra Pradesh..The petitioner contends that a press release being issued is violative of one of the basics tenets of a Swiss Challenge, which is that it must be unsolicited. The other part of the argument is that the consortium cannot be considered a third party as, the Singapore Government which was privy to the planning of the capital, holds a stake in it..“Ascendas-Singbridge Group was formed through the merger of Ascendas Pte. Ltd., (Ascendas), JTC subsidiary and Singdridge Holdings Pte. Ltd., (Singdridge), a Temasek subsidiary. Temasek is an Investment Company based in Singapore with a portfolio of SGD 266 billion as of 31stMarch, 2015, and JTC Corporation is a subsidiary of Ministry of Trade and Industry, Government of Singapore. Temasek and JTC Corporation hold a 51:49 stake in Ascendas-Singbridge Group” .Similarly Sembcorp share holding pattern is Temasek sovereign fund of Singapore holds 49.5% and the rest is held by the public..It is also the contention of the petitioner that principles of natural justice in relation to a Swiss challenge as laid down by the Supreme Court in Ravi Development vs. Shree Krishna Prathisthan & Ors and as enshrined under the Andhra Pradesh Infrastructure Development Enabling Act 2001 have been violated..The fact that the consortium was an arm of the Government of Singapore and that they must have been privy to plans relating to the capital at Amaravathi, has been relied upon to support this assertion ..A single Judge Bench of the Telangana and Andhra Pradesh High Court, had issued interim orders on September 12, 2016 staying the opening of the bid submitted by the original proponent in light of “glaring infirmities”..The Government appealed the verdict, but withdrew the same on the grounds that it would issue fresh Requests for Proposal (RFP)..It is noteworthy that a fresh notice inviting counter proposals to the proposal submitted by the original proponent were invited on January, 3, 2017, and the bid was closed on May 8, 2017 on the grounds that no competitive bids were received..Amendments to the APIDE Act 2001.The State Government proceeded to pass an ordinance, which was subsequently signed into law in 2017, in the form of the Andhra Pradesh Infrastructure Development Enabling (Amendment) Act of 2017..The petitioner claims that the sole purposes of this exercise was to remove the hurdles that the Court had enumerated in their order date September 12, 2016 restraining the Government from opening the consortium’s bid..The amendments such as replacing the term “Infrastructure Authority” as was contemplated prior to the Amendment in the Act with the term “Government” evidences that the power is usurped by the State Government merely to legalize whatever was done by it without following the provisions of the Act prior to the Amendment.. The petition also states.“Additionally, the new Section inserted in the place of the erstwhile Section 18 removes the compulsion/obligation cast upon the Government Agency to ensure adequate competition in consultant selection process for any project and enables the Government to select appropriate consultant by following the transparent procedure.”. Allegations of Misconduct by a partner.The petitioner claims that he remembered an instance of alleged wrongdoing by one of the partners of the consortium namely Sembcorp in relation to another Government of AP project, which he had referred to the Vigilance and Enforcement..An application filed by the petitioner under the Right to Information Act seeking a copy of the report submitted to the Government elicited the following response..“…it is informed that Vigilance and Enforcement Department conducts enquiry and sends report to the Government. the Departments concerned have to take a decision on the recommendations made by the Vigilance and Enforcement Department. Therefore, supply of information, copies of reports even before the acceptance/rejection by the Competent Authority will most likely affect the further course of action to be taken by the Government Department concerned..Therefore, your request for providing the results of the investigations, copy of the full file along with the copy of the Note file, pertaining to Appraisal Report No. 126 (C. No. 894/V&E/D2/2015) dated 29-08-2015 is rejected under Section 8(i)(h) of RTI Act.”.The petitioner is urging the court to annul all Government action that arbitrarily favoured the consortium and call for fresh bids. The matter is likely to be heard by a Division Bench of the Telangana and Andhra Pradesh High Court next week..Image Courtesy.Read the petition