Dredging Corp gets court relief on Mumbai Port contract controversy

      07/11/2018

The Mumbai High Court on Monday restrained Mumbai Port Trust from invoking the bank guarantee of Dredging Corporation of India Ltd (DCI) on a three-year dredging work awarded in 2017 which was terminated in April.

The court also refrained Mumbai Port Trust from opening the financial bid on a new tender it had issued to carry out the work for the remaining two years, an order which didn’t take into account the fact that the Port Trust had last week opened the lone price bid placed by Dutch dredging contractor Van Oord Dredging and Marine Contracting Co. NV.

Van Oord had quoted 91.667 crore for the remaining two years of dredging work. The board of trustees of Mumbai Port Trust is expected to clear the Van Oord bid in the next few days.

In comparison, DCI had won the three-year contract last year after quoting 83.99 crore.

DCI is contesting the decision of Mumbai Port Trust to terminate the contract on April 21 without giving the mandatory 14 days’ notice for such terminations and sought a stay on the finalisation of the new tender that was issued the same day. The Vizag-based firm has also sought the court’s intervention on encashment of its bank guarantee of 8.339 crore by Mumbai Port Trust.

Besides, the State-owned dredging company is seeking court direction to recover dues of 17 crores for the work done at the port for one year. The port trust has paid 7 crore to DCI but refused to pay the balance citing non-performance. Mumbai Port Trust failed to appear for the hearing either on Saturday or on Monday, prompting Justice SJ Kathawalla to direct that the order copy be served on Mumbai Port Trust, said Subhash Bhalwal, the lawyer representing DCI.

Mumbai Port Trust could not be reached for comment.

The spat between the two State-owned entities found a mention from Justice Kathawalla who suggested that the matter be sorted out through mutual discussions. Mumbai Port Trust claims it decided to scrap the contract after DCI pulled out the dredgers from the project site without permission.

“DCI de-mobilised the dredgers on April 8 after duly informing the Port Trust and after obtaining the port clearance,” A DCI spokesman said.