The unpaid dues relate to a sub-contracting deal between DCI and Van Oord at JNPT
Dredging contractor Van Oord India Pvt Ltd has filed a petition in the National Company Law Tribunal (NCLT) seeking to recover unpaid dues of ₹93.12 crore from Dredging Corporation of India Ltd (DCI) on a contract it had undertaken at Jawaharlal Nehru Port Trust (JNPT) on behalf of DCI.
Van Oord India is the wholly-owned Indian unit of Dutch dredging giant Van Oord Dredging and Marine Contracting Co. NV.
The unpaid dues relate to a sub-contracting deal between DCI and Van Oord at JNPT, India’s biggest state-run container port.
Contract on nomination basis
In 2019, DCI secured a three-year annual maintenance dredging contract from JNPT on nomination basis (without a tender).
In the first year’s contract, DCI outsourced a big portion of the work to another contractor ISDPL, making “extra money” in the process from the deal.
JNPT later sought refund of the “extra money” from DCI to avoid potential adverse observations or queries from the government auditor, the Comptroller and Auditor General of India (CAG), on why the contract wasn’t tendered out to the lowest bidder – the preferred way to determine market rates – instead of giving it to DCI on a nomination basis, resulting in “unjust gain to DCI” from sub-contracting the work at a lower value.
Dredging industry sources said that this was the first such instance in the sector where the employer (JNPT) is seeking refund from the dredging contractor (DCI).
It is considered further significant because DCI is now part-owned by JNPT.
In a strategic disinvestment deal, Visakhapatnam Port Trust, Paradip Port Trust, Jawaharlal Nehru Port Trust and Deendayal Port Trust together acquired the Central government’s 73.47 per cent stake in DCI for ₹1,056 crore in March 2019.
Wiser from the experience of spending more than the market rates for annual dredging in the first year of the contract, JNPT decided not to pay the full amount estimated by DCI for the second and third year’s work. Instead, JNPT said it will only pay DCI the amount it finalised with the sub-contractor plus a 10 per cent extra as supervision/project management consultancy charges.
DCI sub-contracted the second year’s work to Van Oord India, which was completed in March this year. The unpaid dues for the work done is the subject matter of the petition filed before NCLT.
Van Oord India declined to comment on the NCLT petition, which was filed on August 31.
G Y V Victor, managing director and chief executive officer of DCI, said the company was yet to receive any notice from NCLT on the petition. He declined to discuss the matter further.