T.S. Thakur, J.
1. Judicial review of administrative action has its own limitations. The court examining the validity of any such action is not so much concerned with the correctness of the decision under challenge as it is with decision making process. It does not sit as a court of appeal to pronounce upon the correctness of the decision or appraise the material to arrive at its own conclusion and then substitute the same for that of the authority. The court is concerned with finding out whether the decision making process is vitiated by mala fides, unreasonableness or arbitrariness. Even while doing so, the court is expected to exercise its powers under Article 226 with great care and caution and intervene only when such intervention would promote public interest. There is considerable authority for these propositions to which we shall refer in the course of this judgment, but before we do so, it is necessary to set out in brief the facts giving rise to these proceedings.
2. The genesis of the controversy raised in this petition lies in a decision taken by the Government in September, 2003 for modernizing and upgrading the Indira Gandhi International Airport at Delhi and the Chatrapati Shivaji International Airport at Mumbai through what is described as 'Joint Venture Route' by formation of separate companies between Airports Authority of India and a joint venture partner. The first step taken in that direction came in the form of the Government constituting an Empowered Group of Ministers (hereinafter referred to as EGoM) which was some time later reconstituted to comprise Minister of defense, Minister of Finance, Minister of Law & Justice, Minister of Commerce and Industry and Minister of State Civil Aviation.
3. The terms of reference for the EGoM included selection and appointment of a financial consultant, approval of Request for Expression of Interest (hereinafter referred to as RFEOI), selection and appointment of Global Technical adviser, approval of Request for Proposal document (hereinafter referred to as RFP document) comprising draft Concession Agreement, draft Shareholders Agreement and other project related agreements and short-listing of prospective bidders based on technical and financial criteria stipulated in the RFP. Approval of detailed modalities including design parameters, bid evaluation criteria, fee payment structure etc. was also left to the EGoM. The EGoM was to be assisted by an Inter Ministerial Group (hereinafter referred to as IMG) under the chairmanship of the Financial adviser to the Ministry of Civil Aviation.
4. The EGoM acted in the right earnest and on the recommendation of the IMG, appointed the financial, technical and legal consultants for the two airport projects. While ABN-AMRO was appointed as financial consultant, Airplan Australia was taken as the global technical adviser with Amarchand & Mangaldas & Suresh A. Shroff & Co. as legal consultants. Separate agreements, to which we shall refer in detail a little later, were executed with each one of these consultants stipulating the terms and conditions subject to which they were required to render their services to the Government and to the Airports Authority of India.
5. The consultants placed in position, the Invitation to Register Expression of Interest (hereinafter referred to as ITREOI) document was prepared with their assistance and approved by the EGoM in February, 2004. A global advertisement inviting expression of interest from prospective bidders was then published in response whereto, ten consortia expressed their interest in the two projects out of whom, nine qualified in the process of screening to proceed to the next stage of consideration. Eventually, however, only eight of the ten consortia who had initially responded remained in the field.
6. In February, 2005, the EGoM approved the RFP and transaction documents which were then issued to the pre-qualified bidders in April, 2005. The RFP inter alias contained the terms and conditions governing the transaction as also the approach to be adopted for evaluation of the offers. Briefly stated the evaluation process was spread over the following four stages :
Stage-I : This stage involved the assessment of mandatory requirements set out in Clause 5.2 of the RPF.
Stage-II : This stage involved the assessment of the financial commitment of the bidders in terms of Clause 5.3 of RFP.
Stage-III : This stage related to the technical pre-qualification criteria, and comprised two distinct aspects viz. (a) Management Capability, Commitment and Value Add and (b) Development Capability, Commitment and Value Add.
Stage-IV : This stage related to the assessment of the financial consideration, the bidder offering the highest financial bid being declared as the successful bidder.
7. The most significant part of the above process of evaluation was that in terms of para 5.4 of the RFP, only such of the bidders were to qualify for the final i.e. Phase-IV of evaluation as would score at least 80% marks under both management capability and development capability heads in Phase-III. Para 5.4 reads as under :
5.4 Assessment of Technical Pre-Qualification
The Technical pre-qualification is based on two global pre-qualifications criteria.
Management Capability, Commitment and Value Add
Development Capability, Commitment and Value Add
Each of these is assessed in terms of a set of pre-qualification criteria and supporting pre-qualification factors that are detailed in the Section 56.
The purpose of the Technical Pre Qualification phase is to ensure that only those Bidders that can address the GOI's strategic objectives are evaluated at the final phase of the evaluation process and that only Bidders satisfying the benchmark of 80% under the technical pre qualification requirements are allowed into the final phase of evaluation.
A scoring system will be applied based on the assessment of the evaluation terms of the Offer against the Technical pre-qualification criteria. Each of the two global pre-qualification criteria is assessed out of a possible 100 marks. The assessment is on an absolute basis not relative as between the Offers. Hence there is no predetermined number of Offers that will be considered in the final phase.
8. It is also noteworthy that in terms of Para 1.5 of the RFP, while the tenderers could submit tenders for both the airports, only one airport could be allotted to any one party. The relevant portion of the RFP reads :
Bidders may bid for both Airports but on the basis that only one bid may be successful.
9. It is common ground that out of a total of eight pre-qualified bidders, only six submitted their offers for Mumbai Airport while five bids were received for the Airport at Delhi. These bids were in the first place referred to the consultants for evaluation, who submitted a report according to which only two of the bidders viz. the petitioner and Respondent No.3 had qualified to go to the fourth stage of evaluation. The evaluation by the consultants had presented the following picture in respect of the two airports :
MUMBAI AIRPORT
Sl. No. Name of Bidder Management DevelopmentTechnical evaluation Capability Capability1 Reliance-ASA (Bidder E) 81.0 80.22 GMR-Fraport (Bidder B) 84.7 92.73 DS Construction-Munich Airport (Bidder C) 73.1 54.74 Sterlite-Macquarie (Bidder D) 57.0 65.15 Essel-TAV (Bidder A) 35.5 29.46 GVK-ACSA (Bidder F) 76.0 59.3DELHI AIRPORTSl. No. Name of Bidder Management DevelopmentTechnical evaluation Capability Capability1 Reliance-ASA (Bidder E) 80.9 81.02 GMR-Fraport (Bidder B) 84.7 80.13 DS Construction-Munich Airport (Bidder C) 73.1 70.54 Sterlite-Macquarie (Bidder D) 57.0 61.95 Essel-TAV (Bidder A) 37.6 41.4
10. The evaluation report received from the consultants was then reviewed by the Government Review Committee (hereinafter referred to as the GRC) constituted by the IMG in terms of an order dated 10th October, 2005. The GRC was of the view that the approach adopted by the consultants was broadly consistent with the approach notified and advised to bidders in the RFP document although there were variations in individual criteria due to the element of subjectivity inherent in the evaluation process. The evaluation reports of the consultants and the GRC were then placed before the IMG on 2nd December, 2005 and before the EGoM on 5th December, 2005. Since the IMG had not come up with any clear proposal as some of its members had agreed with the evaluation while some others had expressed some reservation about the same, the EGoM asked the IMG to come up with a clear proposal. The matter was accordingly discussed in the IMG once again in the course of which discussions, it transpired that five out of eight members found fault with the evaluation made by the consultants and were of the view that there was need for a fresh look on the same.
11. Keeping in view the opinion expressed by the IMG, the EGoM referred the matter to a committee of secretaries comprising the Cabinet Secretary, Secretary MCA, Member Secretary Planning Commission, Secretary Department of Economic Affairs and Secretary Department of Legal Affairs in terms of an order dated 21st December, 2005. The committee, in turn, referred the matter to a Group of Eminent Technical Experts (hereinafter referred to as 'the GETE' or 'the Sreedharan Committee'). This Committee comprised Mr. E. Sreedharan, Chairman, Delhi Metro Rail Corporation and Mr.R. Sivadasan, Finance Commissioner, Ministry of Railways. Both these officers were perceived as men with considerable experience in infrastructure development and financial matters and as persons who have attained pre-eminence and expertise in their respective fields. The GETE was asked to comprehensively scrutinize the technical pre-qualification of joint venture partners in terms of the bid criteria. It was also required to comment upon the evaluation process including calibration of the qualifying cut-off and sensitivity analysis, transparency and fairness of the evaluation process and steps, if any, required to be taken to achieve a transparent and fair outcome. The GETE was to be assisted by Director General of Civil Aviation.
12. The GETE submitted its first report on 7th January, 2006. It had, in that report, analysed the evaluation process qua only two bidders who had, according to the technical advisers, crossed the benchmark of 80% marks stipulated by Para 5.4 of the RFP. One of these bidders, as noticed earlier, was the petitioner while the other who had met the qualifying requirement was respondent No. 3, M/s G.M.R. Infrastructure Limited. The GETE reported certain discrepancies in the evaluation of the bids submitted by these two tenderers. It carried out a process of moderation as a result whereof while Respondent No.3 continued to remain qualified with more than 80% marks, the petitioner company fell below the benchmark of 80% for both the airports. The GETE, thereforee, held the petitioner ineligible. We shall turn to the norms adopted by GETE for moderating the process of evaluation when we come to the criticism which Mr.Rohtagi, counsel for the petitioner, mounted against the evaluation by GETE. Suffice it to say that since in the opinion of GETE rectifying the flaws in the award of marks qua other bidders would not have changed their status materially for they would have continued to get less than 80% marks, a fresh exercise for award of marks to the remaining bidders was unnecessary.
13. Based on the validation exercise undertaken by it, GETE recommended that instead of scrapping the entire tender process and inviting fresh bids, respondent G.M.R. Infrastructure Ltd. should be declared as the only bidder who is technically qualifying and its financial bid opened for both the airports. It recommended that depending upon the best advantage to the country, one of the two airports could be assigned to respondent GMR. For the other airport, GETE suggested the modernization and improvement work to be entrusted to a specially set up agency on the lines of Delhi Metro Rail Corporation. The recommendations made by the GETE may at this stage be extracted in extenso :
6. Way forward :
6.1 There is no need to take up the technical evaluation afresh nor to scrap the whole tender process and invite fresh bids. Tenderer 'B' should be declared as the only bidder technically qualified and their financial bids should be opened for both IGI Airport and Mumbai Airport. Based on the best advantage to the country, one of the two Airports can then be considered for assigning to them.
6.2 For the other Airport, again following the process of re-bidding to select another consortium would involve considerable delays. As the re-structuring and modernization of the second Airport cannot brook any further delay, we would recommend that the airport which is not assigned to bidder 'B' should be taken up for modernization and improvement through an agency of a Special Purpose Vehicle specially set up for this purpose on the lines of Delhi Metro Rail Corporation. However, in this SPV with the pubic-private partnership route. Government's participation including that of Airports Authority of India should be limited to 50% so that the SPV will have more flexibility and freedom for taking decisions. Following the Delhi Metro pattern, the SPV should appoint a well-known and competent International Consultant for the planning, design and project supervision of the Airport. We understand this was the route followed for developing the modern airports at Hong Kong, Singapore, Seoul, etc. The funding of such modernization may be on a debt equity pattern of 1:1 or 2:1 as the Government may decide. In any case, the Government's equity should be limited to 50% as was done in the case of Maruti Udyog Ltd. By this route the second Airport can also be got ready by the year 2010 and the Consultants can plan the expansion scheme in such a way that the present operations are not affected and they get progressively augmented to meet the needs of the growing traffic.
6.3 It is, however, for the government to take a decision whether a re-bid process should be followed for the second Airport or what has been suggested in para 6.2 is to be adopted.
14. On receipt of the report from the GETE, the Committee of Secretaries examined the matter and accepted the recommendations contained therein in so far as the allotment of one of the two airports to respondent No. 3, G.M.R. Infrastructure Ltd. was concerned. The Committee of Secretaries was of the view that Delhi Airport could be taken up for development on priority basis through the joint venture route while Mumbai Airport could be included in the next round of bids to be invited for airport modernization along with Chennai and Kolkata airports.
15. When the matter came up before the EGoM on 12th January, 2006, they were of the view that instead of evaluating the bids received from only two bidders, GETE should evaluate the bids received from other bidders also. This was done by GETE in terms of a supplementary report on 17th January, 2006. The position that emerged upon completion of this process was as under :
Bidder Code
DELHI AIRPORT
Management Development, Marks awarded Marks awarded Marks awarded Marks awarded
capability, capability by the by GETE by the Technical by GETE
commitment commitment Technical adviser
and value and value adviser
add add
A 37.6% 40.4% 41.4% -
B 84.7% 81.7% 80.1% -
C 73.1% 73.3% 70.5% -
D 57.0% 23.5% 61.9% -
E 80.9% 74.8% 81.0% -
F N/A N/A N/A -
Bidder Code
MUMBAI AIRPORT
Management Development, Marks awarded Marks awarded Marks awarded Marks awarded
capability, capability by the by GETE by the Technical by GETE
commitment commitment Technical adviser
and value and value adviser
add add
A 35.5% 38.3% 29.4% -
B 84.7% 81.7% 92.7% -
C 73.1% 73.3% 54.7% -
D 57.0% 53.5% 65.1% -
E 81.0% 74.8% 80.2% -
F 76.0% 73.0% 59.3% -
16. As is evident from the above, Respondent No. 3 was the only bidder qualified to enter the fourth stage of the selection process. One of the two airports would, thereforee, logically go to the said respondent at the choice of the tenderer for it was the only one qualified to stake a claim for both the airports. Allotment of one of the two airports at the option of the eligible bidder, thereforee, did not appear to present any major difficulty for the EGoM. The question was whether the process of allotment of the other airport should be started afresh or the qualifying standards liberalized to enable a reasonable number out of the existing bidders to go to the fourth and the last stage of the selection process. The Government's version is that it decided to go for the second option for a variety of circumstances to which we shall advert a little later while we deal with the arguments advanced on behalf of the petitioner challenging the legality of the said decision. Suffice it to say that the EGoM took a decision to modify para 5.4 of the RFP, which decision and modification was announced by the Chairman of the Bid Opening Committee to the bidders on 31st January, 2006 before the opening of the sealed envelopes containing the financial bids for Delhi and Mumbai airports. This was confirmed in writing to the bidders in terms of a communication dated 1st February, 2006 in the following words:
No. AAI/KID/D&M;/2004
1st February, 2006
Reliance Airport Developers Pvt. Ltd.
Kind Attn: Mr. J.P. Chalasani
Director, Reliance Energy
BSES Bhawan, Nehru Place,
New Delhi-110009, India
Subject : Modernisation and Restructuring of Mumbai Airport
Sir,
This has reference to the opening of sealed envelopes containing Financial Consideration for Delhi and Mumbai airports held yesterday i.e. 31st January 2006 in the Board Room of AAI, wherein representatives from your consortium were also present. Prior to opening the sealed envelopes containing Financial Consideration, Chairman of the bid opening Committee, conveyed the decision of the Competent Authority regarding the procedure to be followed by the bid opening Committee and the modifications to the RFP which are reproduced as under:
2. The competent authority has decided that para 5.4 and other provisions in the RFP which lay down the process for the transaction till the technical qualification stage are modified as under :
(a) Since Bidder (B) led by GMR Infrastructure Ltd. is the only bidder who meets the minimum 80% marks criteria for both the management and development in the original RFP, he should be allowed to choose between Delhi and Mumbai airports provided that if the financial bid of any other bidder is higher for the airport he chooses, he will have to match that higher financial bid.
(b) The competent authority has also decided that including the GMR consortium there should be a total of four bidders for each of the two airports deemed to be technically pre-qualified on the basis of the highest aggregate marks they obtained for the development and management criteria as laid down in the RFP.
(c) In view of para 2 (a) & (b) above, for the airport which remains after the GMR consortium has chosen an airport, that bidder, whose financial bid is the highest, would be declared the successful bidder. However, if the financial bid of GMR consortium is higher for the remaining airport, the said bidder would have to match the financial bid of GMR consortium
3. The above modifications may please be noted.
Yours faithfully,
Sd/-
(V.K.KALRA)
Executive Director (KID)
17. The financial bids were then opened by the Committee which revealed the financial bid position in regard to the two airports as under :
DELHI AIRPORT
Sl. No. Name of the Consortium Financial bid offered in termsof revenue sharing1 GMR Consortium 43.640%2 Reliance Consortium 45.99%3 DS Construction Consortium 40.15%4 Macquarie Consortium 37.04%MUMBAI AIRPORTSl. No. Name of the Consortium Financial bid offered in termsof revenue sharing1 GMR Consortium 33.03%2 Reliance Consortium 21.33%3 GVK Consortium 38.7%4 DS Construction Consortium 28.12%
18. In terms of the decision and modified Para 5.4 of the RFP extracted above, Respondent No.3 who opted for Delhi Airport was asked to match the highest financial bid received for the said Airport which the said respondent agreed to do. In so far as the Mumbai Airport was concerned, since GMR Consortium could not claim the allotment keeping in view of para 1.5 of the RFP whereunder both the bidders could offer for both the airports but only one bid could be successful, the contract was allotted to respondent No. 4 who had offered the highest financial bid of 38.7% for the said airport as against 21.33% offered by the petitioner and 28.12% offered by D.S. Constructions. The EGoM accordingly declared respondent No. 3 as the successful joint venture partner for Delhi Airport and respondent No. 4 for Mumbai. That decision was endorsed by the Union Cabinet on 1st February, 2006. Letters intimating to respondents No. 3 and 4 about their selection as successful bidders were accordingly issued calling upon them to furnish the enhanced bid bond guarantees of Rs. 500 Crores each. Aggrieved the petitioner has filed the present writ petition challenging the said allotment.
19. Appearing for the petitioner, Mr. Mukul Rohtagi, learned senior counsel argued that Fraport whom respondent No. 3 had taken as its consortium partner had claimed the benefit of development of Frankfurt and Manila airports in the bid submitted by the said respondent. Respondent No. 3 had not, however, argued the learned counsel, disclosed the true facts in relation to the Manila airport contract awarded to Piatco in which Fraport had a 30% stake. According to Mr. Rohtagi, the said contract had been annulled by the Supreme Court of Philippines in May, 2002 on various grounds including the ground that the same was opposed to public policy and public interest. Non-disclosure of the true affairs relevant to Manila airport development and the factum of invalidation of the contract by the Supreme Court of Philippines should have according to Mr.Rohtagi resulted in the rejection of the bid offered by respondent No. 3. In any event, the invalidation of the Manila airport contract would according to the learned Counsel dis-entitle Respondent No. 3 or Fraport from claiming any experience whatsoever in regard to the said Airport. He urged that the assessment and award of 0.5% marks under the sub-head 4.2.1 was unjustified and liable to be disallowed. Once that was done, respondent No. 3 would fall below the benchmark of 80% and thereby become ineligible qua both the airports.
20. Mr.Rohtagi next argued that award of 80.1% marks to respondent No. 3 under the criteria 'Development Capability' was entirely arbitrary. He urged that the initial development plan which the bidders were required to submit and in which they were required to indicate the methodology of modernizing the airports was not up to the mark in the case of respondent No. 3. He submitted that the technical experts as also the committees appointed by the Government had expressed their dissatisfaction with the initial development plan of respondent No. 3. He referred to the observations made by the evaluation committee in regard to the initial development plan submitted by respondent No. 3 and urged that no prudent person could have allotted a contract for modernization and upgradation of the airports on the basis of such a defective and technically poor plan. He further argued that appointment of GETE was without jurisdiction as according to RFP, only respondent No. 1 and its advisers were competent to evaluate the offers for both the airports. He contended that the entire evaluation process having been stipulated in the RFP, there was no room for any digression from the said process by appointing an outside agency like GETE to undertake an independent process of evaluation of the bids. He contended that the appointment of GETE was unnecessary also for the reason that the Government Review Committee had approved of the evaluation process undertaken by the expert advisers and certified that the process was broadly consistent with the approach that was notified in the RFP document. Alternatively he contended that the evaluation of the development capability criteria by GETE was flawed not only because the GETE had no knowledge or experience to judge the process of evaluation of bids for works like the ones proposed for the two airports but also because the process of evaluation itself was conducted in an unsatisfactory and cursory manner. He found fault with the reasoning given by GETE in its report and argued that the award of equal weightage and marks for all the sub-factors under a particular factor was illegal and irrational. He, in particular, referred to the weightage given and award of marks for sub-factors like property development, infrastructure development, approach to and integration of employees, absorption of employees, non-aeronautical revenues for the airports and experience in OECD countries. He found fault with GETE evaluating only management capability without carrying out a similar process in so far as Development Capability criteria was concerned.
21. It was further argued by Mr. Rohtagi that once the bidders had crossed the lowered benchmark of 50% and were treated as technically pre-qualified, no single bidder could claim any distinctive position as all of them had to be treated at par with each other. What would then determine the fate of the bid would be the financial bid. Having lowered the benchmark from 80% as originally stipulated in the RFP to 50%, the respondents could not, according to Mr. Rohtagi, adopt two different standards for allotment of the two airports for doing so would be legally impermissible being discriminatory. He also contended that the RFP did not envisage giving of any choice to any particular bidder as was done in the instant case to benefit respondent No. 3. He found fault with the amendment of the RFP in terms of Clause 6.7 thereof and urged that the power to alter the terms of the RFP could not be exercised in an unguided and arbitrary manner. Any unilateral variation of the RFP without informing the bidders and without there being any cogent reason whatsoever for the same was, according to Mr.Rohtagi, a negation of fairplay and the concept of equality in a polity governed by the rule of law.
22. On behalf of the respondent Union of India, Mr.Gopal Subramaniam argued that the airport modernization projects at Mumbai and Delhi were not only prestigious in terms of their importance and magnitude but involve complicated issues arising in the fields of civil and aeronautical engineering. The joint venture route adopted for these projects was, thereforee, dependent to a great extent on the ability of the joint venture partner to handle not only issues of technical nature but also those that related to management capability. A selection process for joint venture partners had, in that view, to be on a global basis so that the very best in the field of modernization and upgradation of airports would come forward to offer participation in the proposed joint venture bringing with them experience in similar other projects elsewhere. The Government had, thereforee, taken pains to ensure that a transparent and objective process of evaluation of offers with the help of advisers was put in place to avoid any criticism about the validity of the said process. He argued that the entire process undertaken in the instant case qua both the airports was totally transparent and perfectly honest and objective.
23. Mr. Subramaniam further argued that the process by which the ultimate choice of a joint venture partner was made itself showed that there was no possibility of anyone acting arbitrarily or any bidder or consortium partner being benefited or favored in any manner whatsoever. He urged that the fact that the evaluation process had the expert touch of consultants selected for the purpose, and the fact that the evaluation was itself subjected to review by the Government at various levels like the Government Review Committee, the Inter Ministerial Group, the Committees of Secretaries, GETE and the Empowered Group of Ministers left no manner of doubt about the fairness of the process which alone was the concern of a Court engaged in judicial review of the decision taken by the Government. He submitted that the comments made by the technical advisers regarding the initial development plan submitted by different bidders did not condemn the said plan as inappropriate or unsuitable so as to warrant a rejection of the bid out of hand. The comments were intended only to highlight the strong and the possible weak points of initial development plans all of which had gone through the process of evaluation in terms of the RFP, which, in turn, provided a stringent scrutiny of the said plans. He urged that in terms of the RFP, the initial development plans had to be in conformity with the Development Planning Principle set out in the Operation Management and Development Agreement. Once the Initial Development Plan had crossed the threshold of evaluation process and once the mandatory requirements were assessed and found complied with, the observations made by advisers pointing out any particular aspect in the plan could only be of peripheral importance and would not warrant rejection of the plan itself. He stoutly defended the appointment of GETE for a proper moderation of the evaluation by the technical experts which had not found favor with the majority of the IMG Members on account of elements of subjectivity evident in certain aspects.
24. Mr. Subramaniam argued that the members of the GETE were outstanding people who have distinguished themselves in their respective fields and regarding whose ability and objectivity, none of the tenderers could or have raised a finger. There was, according to Mr. Subramaniam, no arbitrariness in the decision taken by the Government to allot to GMR Infrastructure Ltd. who had emerged as the only eligible tenderer one of the two airports at the choice of that respondent nor was, according to him, there any illegality or arbitrariness in the decision taken by the Government to lower the benchmark so that instead of a fresh tender process, the other airport could be allotted to one of the tenderers who had already submitted its tender depending on who had offered the highest financial bid. A fresh tender process would have, according to Mr. Subramaniam, not only delayed the start of the project work but brought no real gain either in terms of better technical management ability of the JV partner or lower cost of construction for the Government.
25. Appearing for the Airports Authority of India, Mr.K. Parasaran argued that the consultants chosen by the Government had several other tasks entrusted to them relating to the tender transaction. He urged that the power of evaluation had, notwithstanding the appointment of the consultants, always remained vested in the hands of the Government of India/AAI and that all the six entities including the consultants, the Committees and the GETE had to simply aid and assist the Government in the evaluation process. There was, according to the learned counsel, no illegality in either the appointment of GETE or the process of moderation undertaken by it to remove as far as possible any element of subjectivity in the evaluation of the bids which had been the subject matter of discussions and deliberations before the GRC, the IMG and even the Committee of Secretaries. He also supported the moderation of the evaluation process and urged that five distinct areas in which GETE had corrected the process were rightly picked-up and suitably modified to make the entire process rational, transparent and objective. He submitted that the choice made by the Government of India in reducing the benchmark for the second airport so as to qualify more bidders was bona fide and served public interest. But for the modification of para 5.4 of the RFP, the second airport would have to be re-tendered thereby causing not only a delay in the execution of the project but also adversely affecting public interest in terms of escalation of cost. He argued that the petitioner cannot partly rely upon the process of evaluation while challenging the rest to suit its ends. This he submitted was not legally permissible for a litigant cannot approbate and reprobate in the same proceedings. Reliance in support was placed by Mr.Parasaran upon the decision of the Supreme Court in Nagubai Ammal and Ors. v. B.Shama Rao and Ors. 1956 SCR 451 and The Dollar Company v. Collector of Madras : AIR1975SC1670 . Relying upon certain other decisions of the Supreme Court, he argued that the present was not a fit case in which this Court could, in exercise of its powers of judicial review, interfere with the process of allotment of the works in favor of the successful parties.
26. Appearing for Respondent No. 3, Mr.K.K. Venugopal, learned senior counsel argued that this Court would judicially review the award of a commercial contract by Government or its agency only if the decision making process was vitiated by mala fides, unreasonableness or arbitrariness. The petition did not, however, lay any foundation for a challenge on the ground of mala fides. He also urged that a writ court would not substitute its own decision for that of the administrative body and that it is only when overwhelming public interest required interference, that the Court would intervene. He submitted that the entirety of the documents placed by the Government before the Court in the present case showed that a fair and transparent process had been elaborately undertaken by various committees which sufficiently proved that the decision was bona fide and taken after addressing all the relevant concerns and issues. He also submitted that if two views were logically possible, a writ Court would not conclude that the decision making process was vitiated in any manner. Interference with the award of contract would, according to the learned counsel, cause grave prejudice to public interest as it would result in loss of time of at least one year with the concomitant rise in cost of the project. It would also result in the deadline for Commonwealth Games not being met and the prestige of the country being affected, resultantly jeopardizing its bid for hosting the Olympic Games. He further argued that there was no suppression of material information or facts as alleged by Respondent No. 3 and that whatever information regarding pending investigations was available stood presented to the Government and the AAI at the stage of expression of interest and with the tender documents.
27. Dr. A.M. Singhvi, learned senior counsel, who followed Mr.Venugopal, submitted that the decision in the present case was a multi-layered institutional decision which had been taken after examination of the relevant aspects at different levels. He contended that any such decision even if taken by the Executive would deserve deference from the Court especially when the decision related to any economic activity. The manner in which the decision was taken was, according to Dr.Singhvi, transparent and excluded any possibility of any bias or mala fides at any stage affecting either the decision or the decision making process. He also supported the moderation undertaken by GETE in relation to five different aspects and submitted that the same was based entirely on a rational and objective approach regarding which there could be no two opinions. He contended that the modification of para 4.5 was intended only to ensure the highest revenue for the Government by bringing in more competition regarding the second airport. Modification of Para 5.4 of the RFP was not, according to Dr.Singhvi, meant to place GMR Infrastructure Ltd. at par with other bidders for the purpose of technical evaluation. He supported the initial development plan submitted by Respondent No. 3 and described it as visionary in nature. The plan submitted by Respondent No. 3 was, according to Dr.Singhvi, different from the Airplan IDP which had been circulated for the information of the bidders. The plan was, in any case, assessed to be in consonance with the Development Planning Principles and the traffic forecast and could not, thereforee, be said to be inappropriate or unsuitable. Amendments to the IDP were even otherwise possible at the stage of preparation of master plan. The complaint made by the petitioner regarding change of procedures was, according to the learned Counsel an afterthought since the petitioner knew about the change in procedures and had continued to participate in the process till the stage GETE submitted its report.
28. Mr. Dushyant Dave, learned senior counsel appearing for Respondent No. 4 argued that the entire tender process in respect of CSIA, Mumbai was independent and distinct from that of IGI, Delhi so that the cause of action, if any, in relation to Mumbai airport is separate and distinct from that in relation to Delhi. He submitted that the challenge to the allotment of the Mumbai airport work in favor of Respondent No. 4 was without any basis especially when the petitioner's case, as stated in the writ petition, is that the petitioner and three others, including Respondent No. 4 were declared as technically qualified for Mumbai by reason of lowering of the benchmark. He urged that once the benchmark was lowered by an amendment of the RFP, the only test for allotment of the work was the financial bid in which event the petitioner could have no grievance against the allocation of the contract in favor of Respondent No. 4 as the bid offered by the latter was much higher at 38.7% as against 21.33% offered by the petitioner. It was submitted that the entire process of evaluation of the bids and allotment of the works was fair, objective and transparent and did not smack of any arbitrariness or mala fides to warrant interference with the same. Relying upon the decision of the Supreme Court in Tefcon Projects (I) (P) Ltd. v. Union of India and Ors. (2004) 13 SCC 788 and Madan Lal and Ors. v. State of J&K; and Ors. : [1995]1SCR908 , Mr. Dave argued that the petitioner having participated in the process taken a chance for getting a favorable result cannot turn around to question the validity of the process either on the ground that the RFP did not authorise the Government to amend the same or that the amendment was not in public interest. He submitted that the Evaluation Committee had shown marked preference for the petitioner over Respondent No. 4. The Evaluation Committee had, according to the learned counsel, improperly given to the petitioner credit for its association with Louis Berger group although the said group is not a member of its consortium.
29. Before we formulate the precise questions that fall for our determination, it is necessary to briefly recapitulate the legal position as regards the scope of the Court's power to judicially review administrative decisions relating to award of contracts by the State or its instrumentalities. A long line of decisions rendered by the Supreme Court has recognised the availability of the power of judicial review in relation to the award of contracts to prevent arbitrariness or favoritism in such matters. The decisions have, at the same time, cautioned that there are certain inherent limitations in the exercise of that power. The golden thread that runs through all these pronouncements is the need for the Court to strike the right balance between administrative discretion and the requirement of fairness and equity as guaranteed by the Constitution. In doing so, the Court has to constantly bear in mind certain fundamental considerations which permeate the process of judicial review of any administrative action.
30. In Tata Cellular v. Union of India (1994) 6 SCC 651, the apex court, on a comprehensive review of the law on the subject, declared that a court exercising powers of judicial review must confine itself to finding out whether the decision making authority had exceeded its powers, committed an error of law, committed a breach of the rules of natural justice, reached a decision which no reasonable Tribunal would have reached or otherwise abused its powers. It was not, declared their lordships, for the Court to determine whether a particular policy or a decision taken in fulfillment of that policy is fair. It is only concerned with the manner in which the decision has been taken. The scope of judicial review was, observed the Court, confined to the following three distinct aspects :
(i) Whether there was any illegality in the decision which would imply whether the decision making authority has understood correctly the law that regulates his decision making power and whether it has given effect to it;
(ii) Whether there was any irrationality in the decision taken by the authority implying thereby whether the decision is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at the same; and
(iii) whether there was any procedural impropriety committed by the decision making authority while arriving at the decision.
31. Their lordships proceeded to sum-up the principles deducible from the pronouncements on the subject in the following words :
(i) The modern trend points to judicial restraint in administrative action.
(ii) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made.
(iii) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(iv) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(v) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(vi) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
32. We may also refer to the decision of the Supreme Court in Air India Ltd. v. Cochin International Airport Ltd. : [2000]1SCR505 . The apex Court, in that case, noticed its previous pronouncements to sum-up the law regarding the scope of judicial review and the caution that the Court must always exercise in the following words :
The law relating to award of a contract by the State, its corporations and bodies acting as instrumentalities and agencies of the Government has been settled by the decision of this Court in Ramana Dayaram Shetty v. International Airports Authority of India : (1979)IILLJ217SC , Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India : (1981)ILLJ193SC , CCE v. Dunlop India Ltd. : 1985ECR4(SC) , Tata Cellular v. Union of India (1994) 6 SCC 651, Ramniklal N. Bhutta v. State of Maharashtra : AIR1997SC1236 and Raunaq International Ltd. v. I.V.R. Construction Ltd. : AIR1999SC393 . The award of a contract, whether it is by a private party or by a public body or the State, is essentially a commercial transaction. In arriving at a commercial decision considerations which are paramount are commercial considerations. The State can choose its own method to arrive at a decision. It can fix its own terms of invitation to tender and that is not open to judicial scrutiny. It can enter into negotiations before finally deciding to accept one of the offers made to it. Price need not always be the sole criterion for awarding a contract. It is free to grant any relaxation, for bona fide reasons, if the tender conditions permit such a relaxation. It may not accept the offer even though it happens to be the highest or the lowest. But the State, its corporations, instrumentalities and agencies are bound to adhere to the norms, standards and procedures laid down by them and cannot depart from them arbitrarily. Though that decision is not amenable to judicial review, the court can examine the decision-making process and interfere if it is found vitiated by mala fides, unreasonableness and arbitrariness. The State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. The court should always keep the larger public interest in mind in order to decide whether its intervention is called for or not. Only when it comes to a conclusion that overwhelming public interest requires interference, the court should intervene.
33. To the same effect is the decision of the Supreme Court in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) ltd. and Ors. : AIR2005SC2299 in which the Court reiterated the law as declared in Tata Cellular and other cases and observed :
11. The principles which have to be applied in judicial review of administrative decisions, especially those relating to acceptance of tender and award of contract, have been considered in great detail by a three-Judge Bench in Tata Cellular v. Union of India. It was observed that the principles of judicial review would apply to the exercise of contractual powers by government bodies in order to prevent arbitrariness or favoritism. However, it must be clearly stated that there are inherent limitations in exercise of that power of judicial review. Government is the guardian of the finances of the State. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of that power will be struck down.
12. After an exhaustive consideration of a large number of decisions and standard books on administrative law, the Court enunciated the principle that the modern trend points to judicial restraint in administrative action. The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted, it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principles of reasonableness but also must be free from arbitrariness not affected by bias or actuated by mala fides. It was also pointed out that quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.
34. It is, in the light of above authoritative pronouncements that have taken note of all previous decisions rendered by their lordships, unnecessary to multiply references to other decided cases. All that need be pointed out is that judicial restraint and the limitations inherent in the exercise of power of judicial review of administrative action must remain present to the mind of the Court while examining whether a given case is fit for judicial intervention. It is only if a palpable case of arbitrariness, discrimination or mala fides in the matter of award of contract is established that the Court may interfere subject, of course, to the overriding consideration that any such interference would not, in any manner, prejudice public interest.
35. Let us now examine the controversy in these proceedings in the light of the above legal principles. The submissions made before us at great length have touched several aspects which arise for our consideration either directly or incidentally. Broadly speaking, the contentions urged at the bar raise for our determination the following questions :
(1) Was there any material non-disclosure of relevant information by respondent No. 3 G.M.R. Infrastructure Ltd.? If so, was the tender submitted by it liable to be summarily rejected on that ground?
(2) Was the constitution of the Group of Eminent Technical Experts (GETE) permissible under the terms of the RFP? If so, was the reference made to it supported by valid reasons?
(3) Was the approach adopted by GETE in the process of validation of the evaluation process, in any way, discriminatory or otherwise bad in law?
(4) Was the modification of para 5.4 of the RFP and allotment of the contract for Delhi Airport in favor of Respondent No. 3 vitiated by any illegality or procedural irregularity?
(5) Was the allotment of the contract for Mumbai Airport in favor of Respondent No. 4 vitiated by any illegality or procedural irregularity?
36. We propose to deal with the questions ad Serialtim :
Re : Question No. 1
37. Appendix D-2 to the RFP inter alias required the intending parties to certify that they had not been convicted by a Court of law or indicated by any Regulatory Authority so as to cast any doubt on their ability to partner Airports Authority of India in the joint venture company. The relevant portion of appendix D-2 requiring disclosures to be made may, at this stage, be extracted :
We certify that in regard to matters other than security and integrity of the country, we have not been convicted by a Court of Law or indicted or adverse orders passed by a regulatory authority which would cast a doubt on our ability to partner AAI in the JV Company or which related to a grave offence that outrages the moral sense of the community.
We further certify that in regard to matters relating to security and integrity of the country, we have not been charge-sheeted by any agency of the Government or convicted by a Court of Law for any offence committed by us or by any of our sister concerns.
We further certify that no investigation by a regulatory authority is pending either against us or against our sister concerns or against our CEO or any of our Directors/Managers/employees.
38. There is in the light of the above, no gainsaying that the intending parties were required to furnish certificates on the lines indicated above which certificates have no doubt been furnished by all the parties who had pre-qualified the evaluation process. According to the petitioner, however, there was notwithstanding the certificate issued by respondent No. 3 a material suppression in regard to the cancellation of the contract for Manila airport which would constitute a material suppression thereby rendering the bid offered by respondent No. 3 liable to be rejected. A three-fold argument was advanced by Mr.Rohtagi in this regard. The first limb of the argument is based on the alleged non-disclosure of the cancellation of the contract for Manila airport, the second is based on the alleged inquiries pending against the Chief Executive Officer of the Fraport in Germany while the third aspect raises the question whether Fraport could claim credit for Manila airport in the matter of evaluation of its bid.
39. There is, in our view, no merit in either one of these contentions. We say so for more than one reasons. Firstly because the writ petition does not make any assertion in regard to any one of the aspects which were argued by Mr.Rohtagi. An assertion made in the rejoinder for the first time can hardly provide a proper basis for an argument which the petitioner has belatedly coined to support the challenge. Secondly because the bid offered by respondent No. 3 did make a fair disclosure in relation to the cancellation of the contract for Manila airport under the orders of the Supreme Court of Philippines. This disclosure was a part of the brief write-up in which Fraport was claiming credit for its association with the construction of the Manila airport. A reading of the said write-up would show that the Manila airport project was initially awarded to Piatco on but basis in the year 1997. Fraport had become a partner of the successful bidder the following year and had contributed in terms of its technical, operational and financial experience to optimize layout, construction, operation and administration of the airport. The disclosure statement in the write-up specifically stated that at the end of 2002 when the terminal was ready to go into operation, the new Government of Philippines had publicly stated that the contract would not be honoured and that the Philippines Supreme Court had soon thereafter declared the contract null and void ab initio. The write-up also referred to the pending arbitration proceedings for settlement of the investment disputes between the contracting parties in Washington (DC) in relation to Manila airport project. There is, in the light of this declaration, no room for holding that respondent No. 3 or its partner had suppressed the facts relating to cancellation of the Manila airport contract. The disclosure is clear and sufficient to meet the requirements of the RFP.
40. Similarly, Respondent No.3 had made a complete disclosure of the pending investigations against Fraport in Germany. It had given in sufficient detail the nature of the investigation and the persons against whom the same were pending at the stage of Expression of Interest itself. It has on an affidavit filed in these proceedings referred to the disclosures made by it and asserted that the pending investigations were not against any person in the employment of Fraport at the time of submission of the bid documents. The allegations against Fraport in relation to the airport in Uzbekistan have, according to the affidavit, been dismissed by the prosecutor in Germany. Suffice it to say that the pendency of the investigations against the former employees of Fraport stood properly disclosed by Respondent No.3. There was, thereforee, no real failure of the obligation to make such disclosures on the part of the said respondent or by Fraport, its partner.
41. Coming then to the third aspect viz. whether respondent No. 3 or its partner could claim credit for the airport work done at Manila, we find it difficult to appreciate how the award of half a mark for not only the airport work at Manila but other airports with which Fraport was associated can be said to be unjustified or legally impermissible. Respondent No. 3 had, in answer to sub-criteria 4.2.1 of the RFP dealing with major airport development experience, claimed a role in the construction of five airports, one each at Frankfurt, Lima, Hahn, Athens and Manila. The consultants had noticed the association of the said respondent with the construction of these airports and made its observations and comments in regard to each airport in the following words :
GMR - Fraport (Delhi) 4.2.1
Implementation of 'state of the art' international / domestic terminal complexes at substantial international airports. Provide information on scale of terminal (design busy hour, annual service volume), role of Airport Operator in the development process, date of opening.
* Frankfurt - Continuous major developments.
* Lima - Role not clear, worked with Bechtel.
* Hahn - Relatively small, non complex LCC.
* Athens - Development role not clear, worked with Hochtief.
* Manila - Substantial involvement.
42. It is not as though the high rating given by the evaluation committee rested entirely on the involvement of Fraport as a partner of the contractor building Manila airport. It is on account of the sum total of the experience which Fraport had in regard to all the airports referred to above that its claim for experience and implementation of state of the art international/domestic terminal complexes was rated high. Just because the contract allotted in favor of Piatco was cancelled after the terminal had been constructed and was due for being commissioned could not, thereforee, be a sufficient ground for this Court either to interfere with the process of evaluation by the consultants and the experts or the end result of that process. This is particularly so when annulment of the contract by the Philippines Supreme Court can not necessarily lead to the inference that Fraport did not have the experience of building a world class airport at Manila. What was being evaluated by the experts was the experience in building world class airports. The fact that Fraport had been substantially involved in the construction of a world class airport at Manila not being in dispute, the argument that this Court ought to interfere with the process of evaluation conducted by experts has not appealed to us. Our answer to question number 1 is accordingly in the negative.
Re: Question No. 2
43. A two fold argument was advanced on behalf of the petitioner in regard to the constitution of GETE and a reference to it for validation of the evaluation. Firstly it was submitted that the process of evaluation having been set out in the RFP, the Government or the Airports Authority of India for that matter could not amend, alter or modify either the method or the agency nominated for that purpose. Secondly, it was argued that even if the Government or the AAI had reserved the power to amend the RFP, they could do so only after notice to the parties and for reasons in writing. No formal amendment having been ordered nor any reason recorded for the same, the constitution of GETE and the making of the reference was contrary to the terms of the RFP.
44. For a proper appreciation of the submissions made at the bar, it is necessary to appreciate the scheme underlying the RFP in so far as the evaluation process envisaged by the same is concerned. That is because it is only when we do so that we can determine whether the RFP reserved any power for the Government or the Airports Authority of India to either change the method of evaluation or the agency through whom the evaluation of the bids could be done.
45. The argument that the appointment of GETE was not permissible proceeds on an assumption that the RPF had stipulated a method of evaluation and an agency which could not be altered by either the Government or the Airports Authority of India. That is not so in our opinion. The RPF reserved in favor of the Government and the Airports Authority of India absolute discretion to vary the tender requirements or amend the terms, procedure and protocols set out in the said document. The RFP did not exclude from the amending power of the Government any provision whether the same stipulated a procedure for evaluation of the bids or matters incidental thereto. We shall presently deal with that aspect in some depth. Assuming however that the power to vary the terms of the RFP did not include the power to vary the terms or the procedure for evaluation of the bids received from the pre-qualified bidders, the question is whether the RFP stipulated any such procedure.
46. According to Mr. Rohtagi, the fact that the Government and the Airports Authority of India had appointed consultants with a view to getting the bids evaluated from them was sufficient for this Court to hold that the process of evaluation of the bids could not be assigned to any other agency except the consultants nominated for the purpose. He argued that the scheme of the RFP did not envisage a reference to an outside agency for evaluation of the bids either for validation of the evaluation process undertaken by the consultants or for an independent evaluation. The constitution of GETE and the reference made to it was, according to the learned counsel, legally impermissible.
47. Para 4 of the RFP stipulates the 'Stage 2 Offer Requirements' while para 5 deals with evaluation of 'Stage 2 Offers'. We are not, for the present, concerned with 'Stage 2 Offer Requirements' for it is admitted that the petitioner and respondents No. 3 and 4 had all satisfactorily complied with the requirements stipulated therein. Para 5.1 of the RFP sets out the approach to be adopted by the Airports Authority of India and its advisers while evaluating the offers. The evaluation of the offers, as seen earlier, was in four phases out of which, phase-I dealt with verification of mandatory requirements stipulated in para 5.2 of the RFP. Phase-II dealt with assessment of financial commitment in the course of which, debt and equity commitments, as specified in the RFP, are evaluated and offers not meeting the requirements excluded from further consideration. In Phase-III, the offers had to be assessed on technical pre-qualification criteria and only those awarded 80% or more marks for each of the two criteria allowed to go to phase-IV in which the bidder offering the highest financial consideration for the airport had to be selected as the joint venture partner. What is important is that neither para 5 nor any other provision in the RFP stipulated that the process of evaluation must necessarily be undertaken by the consultants appointed by the Government/AAI. On the contrary, the process of evaluation and the approach was set out for application by the Airports Authority of India and its advisers as is evident from the very opening sentence in para 5.1 which reads as under :
This section sets out the approach that will be applied by AAI and its advisers when evaluating Offers. General guidance in relation to the relative importance of each of the criteria and certain tender requirements are set our below.
48. It is also noteworthy that the consultants/advisers appointed by the Government and the Airports Authority of India had their tasks cut out in terms of separate contracts executed between the consultants and the Airports Authority of India. These contracts specifically set out the objective underlying the appointment of the consultants. For instance, the contract for global technical advisory services executed between Airports Authority of India and Airport Planning Pty. Ltd. (Airplan) described the purpose underlying the contract in the following words :
1. FIRST CLAUSE: OBJECTIVES AND SCOPE
1.1 The objective of this Contract is, in the process of modernization and restructuring of Mumbai and Delhi airports (Transaction), to provide Technical Advisory Services by GTA to assist and advise the Ministry of Civil Aviation ('MCA'), AAI and the Financial Consultant and other designated members of the Transaction team.
49. The terms of reference enclosed with the contract document are also to the same effect and envisaged assistance and advice to be tendered by the consultants to the Ministry of Civil Aviation, the AAI and the financial consultants and other designated members of the transaction team. We may, in this regard, extract the following passage from the terms of reference forming part of the contract executed with the technical advisers :
TERMS OF REFERENCE
1.0 Scope of work
1.1 The scope of work for the GTA shall include the following:
Assist and advise the Ministry of Civil Aviation ('MCA'), AAI and the Financial Consultant and other designated members of the Transaction team, including preparation of separate written reports relating to each of Delhi and Mumbai airports in respect to the following:
a. XXX
b. XXX
c. XXX
d. XXX
e. An assessment of an appropriate economically efficient and effective development plan and associated estimates of capital expenditure that would be required to develop the two airports over a 20 year time horizon to meet projected traffic forecasts as provided by the traffic consultant and to develop the two airports, over time, to world class standards ('Airport Development Report');
f. Recommended evaluation criteria for assessing 10 to 20 year development plans giving due consideration to world class standards, with global precedents supporting the key recommendations ('Technical Evaluation Criteria Report');
g. XXX
h. XXX
i. XXX
Other requirements for the GTA with respect to each of the two airports will included :
a. assist MCA, AAI and its advisors in evaluating expression of interest submissions and final bids and in negotiations/discussions with bidders relating to technical matters with particular focus on the proposed airport development plans and business plans submitted;
50. Even in the case of contract for financial consultancy services executed between ABN AMRO Asia Corporate Finance (I) Pvt. Ltd. and the AAI, the consultant was required to provide financial consultancy and advisory services as is evident from para 1.1 of the said contract which reads :
1. FIRST CLAUSE: OBJECTIVES AND SCOPE
1.1 The objective of this Contract is to provide financial consultancy and advisory services to AAI and also assist AAI in the process of modernization and restructuring of Mumbai and Delhi airports.
51. To the same effect were the terms stipulated between the legal consultant and the AAI for legal consultancy services, one of which was in the following words :
To advise in all legal matters that may be required by Ministry of Civil Aviation/Airports Authority of India in smooth transfer of Delhi and Mumbai airports to the two companies.
52. In the light of what has been stated above, it is difficult to appreciate how the petitioner can logically argue that the process of evaluation of the bids received from the pre-qualified bidders could be undertaken only by the consultants engaged by the Government of India and the Airport of India or that a reference to a third agency was in the scheme of things forbidden either expressly or by necessary implication. What the RFP had stipulated was the various stages of the process of evaluation and the broad approach to be adopted in relation thereto. It did not make any commitment or representation to any tenderer that the process of evaluation of the bids would necessarily be undertaken by any particular agency, adviser or consultant - technical or otherwise. The Government of India and the Airports Authority of India had, no doubt, appointed consultants to advise and assist them in the matter of finalizing the transaction but the role assigned to them was limited to tendering of advice on matters stipulated in their respective contracts and no more. Neither in the RFP nor in the contracts executed between the AAI and the consultants was the opinion or advice tendered by the consultants made final, conclusive and binding upon the AAI or the Government of India. There was indeed no obligation for the Government of India or the AAI to even consult the advisers/consultants engaged by it and even if they were consulted, the Government or the AAI were not prevented by the contracts executed with the consultants or the RPF to engage another consultant or refer any issue for the opinion of any other expert - technical, financial or legal. The contention that the evaluation of the bids by the consultants was conclusive so that the Government or the AAI could not make even a reference to a third party leave alone act upon the same is, thereforee, without any merit and must be rejected.
53. Let us now examine whether the procedure and agency, even if the same was stipulated in the RFP, could have been altered by the Government, and a reference made to GETE for validation of the evaluation process. Para 1.1 of the RFP specified the purpose underlying the said document which inter alias included an outline of the approach to be adopted in evaluating the binding offers. Para 1.2 of the RFP dealt with the documentation and information to be issued to the pre-qualified bidders but specifically declared that the Airports Authority of India shall have the freedom to vary or add to all or some of the said information including the RFP at any time during the transaction process. The following words in para 1.2 are in this regard significant:
AAI may choose to update, vary or add to all or some of the information (including this RFP) at any time during the transaction process.
54. Also significant are the following two paragraphs in the disclaimer contained in the RFP :
DISCLAIMER
1. XXX
2. XXX
3. XXX
4. This Document is meant to provide information only and upon the express understanding that recipients will use it only for the purposes set out above. It does not purport to be all-inclusive or contain all the information about AAI or the Airports (defined hereinafter) or be the basis of any contract. No representation or warranty, expressed or implied, is or will be made as to the reliability, accuracy or the completeness of any of the information contained herein. It shall not be assumed that there shall be no deviation or change in any of the herein-mentioned information. While this Document has been prepared in good faith, neither AAI nor GOI (defined hereinafter) nor their consultants nor any of their respective officers or employees make any representation or warranty or shall have any responsibility or liability whatsoever in respect of any statements or omissions here from. Any liability is accordingly expressly disclaimed by AAI, GOI, and all of their respective officers, agents and employees even if any loss or damage is caused by any act or omission on the part of AAI and GOI.
5. XXX
6. XXX
7. XXX
8. XXX
9. XXX
10. XXX
11. This Document outlines AAI's expectations in relation to the proposed Transaction. AAI reserves the right, in its absolute discretion, at any stage, to withdraw its proposal to undertake the Transaction or any part thereof or to terminate further participation in the proposed Transaction by any Entity, to change the structure and timing of the proposed Transaction, without notice to refuse entry to a particular Entity to the next step of the process and to withdraw one or both Airports from the proposed Transaction or to vary any of the terms of the Transaction at anytime without giving any reason whatsoever.
55. As regards the power to vary the RFP, para 6.7 of the RFP reserved absolute discretion in favor of the Airports Authority of India and the Government of India to cancel, add to or amend the information, terms, procedures and protocols at any stage and reads :
6.7 Variation to the RFP
AAI/GOI reserves the right, in its absolute discretion and at any stage, to cancel, add to or amend the information, terms, procedure and protocols set out in the RFP, PQB and Consortium members will have no claim against AAI with respect to the exercise, or failure to exercise, such rights.
56. Reference may also be made to para 6.12 of the RFP document which reserved to the AAI/GOI the absolute right to add or remove any party from the shortlist of PQBs or bidders or to vary its standard requirements or to change the structure and the timing of the Transaction process. The said para reads thus:
6.12 Other AAI Rights
AAI/GOI reserves the right, in its absolute discretion without liability and at any stage during the Transaction process, to:
Add to, or remove parties from, any shortlist of PQBs or Bidders;
Require additional information from any PQB or Bidders;
Vary its tender requirements;
Terminate further participation in the Transaction process for any PQB or Bidder;
Change the structure and timing of the Transaction process;
Accept or reject any Offer at any time for any reason;
Not provide PQBs or Bidders any reasons for any actions or decision it may take including in respect of the exercise by the AAI of any or all of the above mentioned rights; and
Take such other action as it considers, in its absolute discretion, appropriate in relation to the Transaction process for the Airport.
57. It is manifest from the above terms and conditions which constitute the very basis on which offers were invited from the intending parties that the Government and the AAI was competent to not only cancel, add or amend the information, terms, procedures and protocols set out in the RFP at any stage but also to vary its tender requirements, change the structure and dimension of the transaction process or take such other action as it would consider appropriate in relation to the proposed transaction. The argument that the Government or the AAI was not competent to amend the terms contained in the RFP or the procedure stipulated therein is thereforee unacceptable.
58. So also the contention that the bidders were entitled to a notice before any change was made or that the amendment, if any, ought to have been preceded by reasons in writing has no juristic basis whatsoever. The RFP and the related tender documents simply invited offers without casting any obligation upon the Government or the Airports Authority of India to necessarily process the same to their logical conclusion. The RFP, as noticed earlier, specifically reserved for the Government and the AAI the authority to modify the terms and conditions subject to which tenders were to be received, processed and evaluated. Any modification made in exercise of that power did not involve the violation of any right vested in any tenderer so as to necessitate the issue of a notice to him leave alone justify such modification by recording reasons in writing.
59. That brings us to the question whether the reference made to GETE was for good and valid reasons. On behalf of the petitioner, it was argued that even if the Government and the AAI were competent to appoint GETE, such appointment was, in the facts and circumstances of the case, unjustified. The fact that the Government had constituted a review committee and an Inter Ministerial Group which was being supervised by the Empowered Group of Ministers (EGoM) competent to take a final decision was, according to the learned counsel, sufficient to enable the Government to take a final decision in the matter. The making of a reference to an expert Committee only to dilute the evaluation undertaken by the consultants and in the process, disqualify the petitioner who had been declared to be eligible to go to the final stage of the tender process was unnecessary and unjustified. It was submitted that the constitution of one committee after the other leading eventually to the appointment of GETE and the allotment of the contracts on the basis of the evaluation made by it was an exercise which was administratively unnecessary and legally unwarranted. He urged that although the petitioner had not alleged mala fides against any individual associated with the process of evaluation or the taking of the decision by the Government at any stage, yet the decision to allot the contracts to respondents No. 3 and 4 was questionable and vitiated by malice in law.
60. There is indeed no allegation of any mala fides against any official or functionary of the Government or the AAI associated with the evaluation of the bids or the allotment of the contracts to respondents No. 3 and 4 at any stage. Super added to that is the fact that the Government was in no way bound by the evaluation which the consultants or the Government Review Committee appointed by it had made. That being so, a reference to the GETE for a validation of the evaluation process would be a decision purely administrative in character which the Government was competent to take in its discretion. Nothing really may turn on the reasons which impelled the Government to make a reference to GETE so long as the reference is not vitiated by any extraneous consideration or mala fides which, as stated above, are absent in the present case. Even so the background in which the constitution of GETE was ordered may be recalled no matter briefly to dispel the impression that the reference was actuated by any collateral purpose of elbowing the petitioner out from competition.
61. The evaluation report received from the consultants first came under scrutiny by the Government Review Committee in which the Committee held extensive discussions with the consultants to get a over view of the transaction process. They explained to the members of the GRC the weightage allocated to each sub-factor, scale adjustments, the re-basing factor adopted by them to ensure that final scores allocated under each of the sub-factors would result in absolute numbers with two decimal points thereby making the comparison of marks between bids easier. They also explained the contents of the evaluation reports to the GRC and that each consultant had individually rated the bids on each factor and sub-factor and allocated marks separately which were subsequently discussed and a consensus on the allocation of marks arrived at. They explained their observations in regard to the strength and the weaknesses of the various plans submitted by the bidders and provided the requisite clarifications sought by the members of the Committee underlining the fact that the process of evaluation of most of the factors had to be subjective although the methodology adopted for evaluation was fair and rational.
62. Having thus familiarized itself with the norms and the procedure adopted by the consultants, the GRC prepared its report in which it inter alias observed that a majority of the evaluation criteria stipulated in the RFP document were subjective in nature thereby making it difficult to allocate a purely objective marking across all bidders. The GRC said :
Based on the independent review conducted, the GRC is of the opinion that a majority of the evaluation criteria, as stipulated in the RFP documents, are necessarily subjective in nature and thereforee it would be difficult to allocate a purely objective marking across all bidders. As such, the inter-se-marking across various bidders for the same criterion, based on experience, expertise, commitment etc. could be marginally different. This subjectivity does not, however, reveal any apparent indication of bias or prejudice for or against any individual bidder.
63. The focus then shifted to the IMG who in its meeting held on 2nd December, 2005 discussed the report of the evaluation committee and the GRC after the consultants had made a presentation giving an over view of the entire transaction and the evaluation process. Based on the deliberations and extensive discussions held by it, the IMG identified the areas of concern which included the way marks were allotted and weightage was given to different sub-factors by the consultants. Concern was also expressed whether there was sufficient competition after the evaluation of the technical bids, since only two bidders had qualified, each one of whom would get one of the two airports. One of the members of the IMG who happened to be a member of the Planning Commission had even argued in favor of the short-listed nine bidders being asked to re-bid or a fresh technical evaluation of the bids by the IMG in which case, those found non-responsive in terms of mandatory condition could be disqualified. Having said so, the IMG left the final decision to EGoM in accordance with the wishes of the majority of its members. The minutes of the meeting drawn by the IMG recorded the following decision:
However, a majority felt that if the entire bidding process had been transparent and the Government Review Committee was satisfied with the process it may not be necessary to go by the advice of the personal opinion of the member from the Planning Commission and that a final decision should be left to the EGoM.
64. When the matter went to EGoM, a decision was recorded requiring the IMG to undertake an independent review of the evaluation conducted by the consultants with the assistance of GRC and submit its recommendation to the EGoM for consideration. The EGoM also directed that no change should be made in the evaluation criteria as stipulated in the RFP document. The EGoM's decision held on 5th December, 2005 is in the following words :
4. The EGoM after detailed deliberations, decided as under:-
I. The IMG with the assistance of GRC should undertake an independent review of the evaluation conducted by the consultants and give a clear recommendation to the EGoM for its consideration. In this regard, the bid document could be made available to the IMG members and they could then seek clarification from consultants/raise appropriate queries on the approach adopted as also the rational for allocation of marks to the bidders for various criteria as stipulated in the RFP documents.
II.The EGoM also directed that no change should be made in the evaluation criteria as stipulated in the RFP documents. Further, the IMG would not undertake any fresh evaluation or allocate marks for any of the criteria. The mandate of the IMG will be restricted to ascertain as to whether it is in agreement or otherwise with the assessment/findings and allocation of marks across various criteria in respect of various bids.
III.The EGoM directed that the IMG must complete its exercise in two weeks or earlier and submit its recommendations through the Ministry of Civil Aviation to the EGoM for its consideration.
IV.The EGoM also directed that the validity of bid bonds submitted by the bidders be extended for a further period of three months and appropriate action be initiated in this regard.
65. The IMG accordingly undertook the process of an independent evaluation and submitted the result of its deliberations held on 12, 13, 14 and 16th December, 2005 to the EGoM. It is noteworthy that in its earlier meeting held on 9th December, 2005, the IMG had noticed certain deviations in the criterion stipulated in the RFP document and the concerns expressed by the members regarding the need for an evaluation that is strictly according to the RFP document. The IMG had, thereforee, directed the consultants to neutralize the deviation and to do the evaluation strictly as envisaged in the RFP document. The minutes of the meeting of the IMG held on 9th December, 2005 had directed the consultants to re-work the evaluation to conform strictly to the criterion stipulated in the RFP. This is evident from the following decision taken in the said meeting :
The consultants were directed to rework their evaluation based on a strict adherence to the RFP criteria and submit their findings today itself, in the form of a matrix to the Ministry of Civil Aviation. It was also decided that the matrix submitted by the consultants would be circulated to all the IMG members for their perusal. The next meeting of the IMG would be held on 12th December, 2005 at 1730 hours to discuss the said matrix as also bidder specific queries pertaining to the Offers.
66. Based on these deliberations held by the IMG in the meetings aforementioned and the discussions which they had with the consultants on various aspects, the members of the IMG expressed their views in writing on the kind of report which should go to the EGoM. A reading of the minutes of the IMG meetings held between 12th to 16th December, 2005 would show that serious concerns had been expressed by the Member, Planning Commission, the representative of the Ministry of Law, Chairman, Airports Authority of India and Member Finance, the Financial Adviser of Ministry of Civil Aviation and the Joint Secretary (DEA). All these were collated for submission to the EGoM along with a note prepared by the Chairman of the IMG. We need not advert here to the views that were expressed by the members or the broad areas in relation to which the same were expressed. Suffice it to say that issues not only regarding development plans submitted by the bidders, but those relating to the method of evaluation and the weightage and allocation of marks were raised. Issues relating to a possible fresh evaluation of the bids by an agency/committee to be appointed by the Government of India were all also raised and articulated by the members of the IMG.
67. The EGoM noticed the absence of any unanimity in the IMG and the possible options available to it. After deliberations, the EGoM decided to set up a committee of secretaries to consider and recommend selection of an appropriate Joint Venture partner for executing the modernization and restructuring work of Delhi and Mumbai airports. This committee was headed by the Cabinet Secretary with Secretary, Planning Commission and three other secretaries to Government of India as its members.
68. The Committee of secretaries discussed the issue at length and noticed the points of view that required to be addressed in so far as technical evaluation of the bids was concerned. They also noted that since they were not technically qualified to assess the entire process of evaluation, it would be prudent to take the assistance of a very eminent and technically qualified group who could advise the Committee on the entire process as well as the concerns shown by the members of the IMG on specific issues. The following passage appearing in the minutes of Committee's meeting held on 24th December, 2005 gives an insight into how the Committee eventually resolved to take the assistance of a group of experts for advice in regard to the evaluation of the bids :
Cabinet Secretary observed that the process starting from advertisement, inviting of applications and short-listing of applicants commenced satisfactorily. Regarding the issue of technical evaluation, there have been various points of views and these need to be addressed. He mentioned that in view of the fact that the members of the COS were not technically qualified to assess the entire process of evaluation, it would be prudent to take the assistance of a very eminent and technically qualified group who would advice the Committee on the entire process as well as about the concerns raised by members of IMG on specific issues. He mentioned that a group consisting of eminent persons in the field like Shri E. Sreedharan of Delhi Metro would not only ensure that the committee gets the proper inputs to arrive at a fair conclusion but would also take care of the issues of credibility of the decision taking process as far as public perception was concerned. Names of other experts were also suggested and were considered.
69. It is pursuant to the above that the Government appointed GETE comprising Sh. E. Sreedharan, the Managing Director, Delhi Metro Rail Corporation and Sh. R. Sivadasan, Finance Commissioner, Ministry of Railways to be assisted by Sh. Satendra Singh, Directorate General of Civil Aviation with the following terms of reference:
(a) Overall validation of the evaluation process, including calibration of the qualifying cut-off and sensitivity analysis. The sensitivity analysis will cover the impact of inter se weightage of sub-criteria as well as scoring.
(b) The issues raised by the Members of Inter Ministerial Group about the evaluation process.
(c) An overall technical assessment of transparency and fairness of the evaluation process, including steps required, if any, to achieve a transparent and fair outcome.
(d) Suggestions for improving the selection procedure for Joint Venture Partners in the future.
70. It is manifest from the above narrative that the decision to appoint GETE did not spring out of any covert design aimed at excluding the petitioner from the field as was feebly argued by Mr.Rohtagi. The decision to have the aid and advice of a group of eminent technical experts had its genesis in concerns that were shown by the members of the Government Review Committee and the Inter Ministerial Group in which various critical areas involving the parameters of evaluation, suitability of the plans and the procedures and norms adopted by the consultants were raised. The record sufficiently demonstrates that there was a sharp conflict of views in regard to these critical areas and the options that were available to the Government to address the same. If the EGoM appointed a Committee of Secretaries who, in turn, thought of taking the assistance and the advice of a group of technical experts, it committed neither any illegality nor any impropriety to call for interference by the Court. What is significant is that even the petitioner had, at no stage, found fault with the appointment of GETE. All that it had desired was that its point of view in regard to various matters and issues be conveyed to GETE which request was granted and rightly so.
71. In the totality of the above circumstances, we have no hesitation in holding that the reference to GETE was for good and valid reasons and that there is no justification for viewing the same with suspicion. Question No. 2 is, in that view, answered in the affirmative.
Re: Question No. 3 :
72. The allotment of the contracts to the successful bidders has been assailed inter alias on the ground that the recommendations made by the GETE were flawed and that the decision taken by the Government on the basis of the said recommendations would also stand vitiated on account of the said flaws. The challenge on this count is primarily founded on the following four aspects that were highlighted by Mr.Rohtagi in the course of his submissions :
(a) GETE did not evaluate the bids submitted by the bidders afresh.
(b) GETE evaluated the bids only qua one out of the two factors relevant for the evaluation of the technical bids.
(c) GETE and the Government of India overlooked the basic deficiency in the initial development plans submitted by the successful bidders which were found to be unworkable by the consultants.
(d) GETE's criticism of the evaluation done by the consultants was unjustified.
73. We shall deal with each one of these grounds of challenge ad Serialtim :
(a) GETE did not evaluate the bids submitted by the bidders afresh:
74. There is, in our view, an apparent fallacy in the submission made on behalf of the petitioner that GETE was constituted to evaluate afresh the bids received from the pre-qualified bidders. As is evident from a plain reading of order dated 27th December, 2005 extracted earlier, GETE was not constituted to undertake a fresh process of evaluation as was sought to be made out by the petitioner. It was only required to make recommendations regarding the over all validation of the evaluation process including calibration of the qualifying, cut-off and sensitivity analysis. The sensitivity analysis included the impact of inter se weightage of sub-criteria/factors as well as scoring. It was also required to make recommendations regarding issues raised by the members of IMG about the evaluation process and examine the transparency and fairness of the said process including steps, if any, required to achieve a transparent and fair outcome. In as much as GETE did not undertake a fresh evaluation of the bids, which would mean looking into a plethora of documents running into 40,000 pages, it did not commit any mistake leave alone fail in the object for which it was constituted.
75. The background in which GETE was constituted cannot be overlooked while appreciating the scope and nature of its duties in the ongoing process of evaluation of the bids and finalization of the choice of joint venture partners. From what has been discussed while dealing with question No.2 above, it is evident that serious issues regarding the validity of the evaluation process especially by reference to the weight ages given to the sub-factors as also the marks awarded to the bids received by the Government had been raised in the GRC as also the IMG. There was no unanimity as to the correctness of either the weightage awarded by the consultants or other areas of concern shown by the members in their respective opinions expressed orally as also in writing. The Committee of Secretaries had, thereforee, a difficult task at hand in as much as without the necessary assistance of experts on the subject, it was called upon to address issues and find a solution which would make the process of evaluation fair, objective, transparent and acceptable. GETE was, thereforee, introduced to perform that function. It was required to validate the evaluation process wherever there were any aberrations in regard either to the weightage given to the sub-factors or otherwise. GETE's role was not in that sense the role of a parallel body of experts evaluating afresh the bids that were received. Its role simply was to make the evaluation proposed by the consultants acceptable in a manner that would remove as far as possible the element of subjectivity and make the entire process rational, uniform and acceptable. That is precisely what GETE did in the first report submitted by it to which we shall advert in greater detail while we deal with the question whether the criticism by GETE of the weightage given by the consultants was correct. Suffice it to say that GETE was not constituted nor was it otherwise required to undertake a fresh process of evaluation. Its report and recommendations cannot, thereforee, be faulted on that ground.
(b) GETE evaluated the bids only qua one out of the two factors relevant for the evaluation of the technical bids :
76. The criticism of the petitioner that GETE did not validate the evaluation of bids under criterion 4.1.2, namely, Development Capability Commitment and Value Add as it did for criterion 4.1.1, namely, Management Capability Commitment and Value add has also not impressed us. The following two paragraphs appearing in GETE's first report dated 7th January, 2006 would clearly show that validation of the evaluation for criteria 4.1.2 was not neglected by GETE, no matter a final picture in regard to the validation process under that criterion was not drawn by it:
4.9 While scrutinizing the marks for criteria 4.1.2 we have the following observations to make :-
The GETE have not studied the development plan of this bidder or any other bidder for that matter. We have also not discussed this with the GTA (Ari Plan). Considering the type of deficiencies in the developmental plans pointed out by AAI, we fell the marking of bidder 'E' has been on a liberal side in regard to sub-criteria 6.1 to 6.5. This will also be evident if we compare the marks scored by bidder 'B' vis-a-vis marks scored by bidder 'E' in regard to Delhi Airport as brought out under :-
Maximum score Score of 'B' Score of 'E' Delhi44.5 30.2 434.10 Admittedly bidder 'B' has better credentials for airport development and such vast difference in marks scored by bidder 'F' over bidder 'B' cannot be easily explained. We feel if a rational approach had been adopted, bidder 'E', who now gets qualified by 0.3 marks for Mumbai and by 1.1 marks for Delhi, would have been disqualified.
77. It is evident from the above that GETE was critical even of the marks scored by bidder E, i.e. the petitioner herein under criterion 4.1.2. In its opinion, marking of bidder E, i.e. the petitioner, was on the liberal side in regard to sub-criterion 6.1 to 6.5 and that if a rational approach had been adopted, bidder E, i.e. the petitioner who had qualified according to the evaluation of the consultants by 0.3 marks for Mumbai and 1.1 marks for Delhi airport would have been disqualified. The reason why GETE did not go deeper into the validation process of criterion 4.1.2 is in fact evident from para 4.11 of its report :
4.11 Since in any case in our view bidder 'E' gets disqualified on the basis of our assessment contained in Para 4.7 above, we are of the opinion that qualifying bidder 'E' technically is not correct.
78. It is, in the light of the above, difficult to dub the report and recommendations of GETE to be incomplete, half hearted or half baked. GETE was emphatic in its view that bidder E did not qualify under criterion 4.1.1. That being so, it would in any case go out of competition even if the process of validation of criterion 4.1.2 was not meticulously undertaken. It indeed made little difference whether a bidder is out of the competitive field by reason of its failure under one criterion or the other or both so long as it failed to make the grade for going to the fourth stage of evaluation process. We have, thereforee, no hesitation in repelling the submission that GETE had failed to do a complete job or that its report was on that account unacceptable.
(c) GETE and the Government of India overlooked the basic deficiency in the initial development plans submitted by the successful bidders which were found to be unworkable by the consultants :
79. On behalf of the petitioner, it was strenuously argued by Mr.Rohtagi that the evaluation committee, the GRC and the IMG had all expressed serious doubts about the viability of the initial development plan submitted by Respondent No. 3. Particular reliance was placed by Mr.Rohtagi upon the observations made by the GRC in regard to the initial development plan submitted by Respondent No. 3 for Delhi airport. These observations are as under:
An excellent Offer overall which gets an overall high rating across most areas, management and development, with the major exception of the Initial Development Plan. Highly experienced airport operator and Indian partner and high quality Business Plan, Transition Plan and Environmental Management Plan. What is particularly strong is the international experience of the airport operator in a wide range of environments. The areas of weakness in the whole Offer were in respect to experience in Indian retail, handling in India of HR issues in ownership change situations, providing multiple nominations for management and support positions and the Initial Development Plan, which is considered unsuitable for implementation in its current form. The multiple management nominations did not reflect a lack of commitment but uncertainly about the timing of the transactions and hence which staff would be committed.
With respect to the Initial Development Plan, it proposes a totally different development path to that recommended in the Airplan Development report and to all of the plans submitted by the other Bidders. The major concern is in relation to the concept of developing the whole of the midfield area as restricted airsides area with no landside access. The scheme relies on high cost automated systems for passenger and baggage movement. Further details regarding problems with this plan are included in Appendix J.
80. So also reliance was placed upon the observations made by the GRC in regard to the weakness in the initial development plan submitted by Respondent No. 4 for the Mumbai airport. These observations are as under :
A medium level Offer with some good aspects but with some inherent weaknesses. The key weakness is the small to medium scale of the South African airports operated by ACSA and the lack of any experience beyond South Africa, as well as limited airport development experience. This lack of development experience reflected in substantial reliance on consultants for both master planning and airport development.
The Initial Development Plan was assessed as medium with a key weakness being a high impact, high cost redevelopment in stage I which involves significant risk, this risk being compounded by the lack of major development experience.
81. It was submitted that the opinion expressed by GRC was in essence echoing the opinion of the consultants in regard to both the initial development plans mentioned above. It was contended that since the initial development plans had themselves been found to be unworkable, no prudent person could have allotted the contracts in favor of the bidders who submitted such plans. In as much as the EGoM, the Committee of Secretaries, the Government and the Airports Authority of India had all ignored the weaknesses pointed out by the experts, while allotting the contracts to Respondent Nos. 3 and 4, they had fallen in a serious error and committed an act of perversity sufficient to vitiate the allotment.
82. The argument advanced by Mr.Rohtagi is, no doubt, attractive but is not equally sound. We say so for more than one reasons. Firstly because the argument ignores the scheme of evaluation underlying the RFP to which we may briefly refer once again to dispel the impression which the petitioner seeks to create about the initial development plan itself being wholly unacceptable. As noticed earlier, the RFP required the bidders to present as part of their Binding Offers a detailed Business Plan and an Initial Development Plan as well as a Transition Plan apart from other documents. While the Business Plan was required to set out the key performance indicators and targets, business strategy and business initiatives etc., the initial development plan for the airport was meant to set out the vision for the airport at year 20 and the ultimate vision of the airport as well as the implementation plan for achieving the development vision including projection of capital expenditure. Para 2.3 of the RFP required the initial development plan to meet four essential requirements stipulated there under. These requirements are enumerated in para 2.3 under the following sub-heads :
* Mandatory Capital Projects
Certain capital projects have been proposed in the draft Transition Documents which are to be undertaken in accordance with the terms and conditions of the Transaction Documents. These must be incorporated in the Initial Development Plan.
* Development Planning Principles
Development Planning Principles as set out in the Transaction Documents must be taken into account while preparing the Initial Development Plan for the Airport.
* Development Standards
The design of aeronautical facilities must conform, where applicable, with the standards as set out in the Transaction Documents.
* Traffic Forecasts
The Initial Development Plan and the Business Plan must be based on the base case traffic forecasts as provided in the Traffic Forecasts prepared by the Traffic Expert. In the event that the PQB believes that alternative forecasts are likely to provide a more realistic forecast, the Initial Development Plan and Business Plan can provide information on the implications of these alternative forecasts.
83. In the process of evaluation of the bids, the very first step involved examination and assessment of the bid to find out whether the same satisfied the mandatory requirements stipulated in para 5.2 of the RFP. Apart from other requirements, one of the mandatory requirements enumerated under para 5.2 was the submission of an initial development plan which is in accord with the Development Planning Principle and the traffic forecast. Para 5.2 of the RFP to the extent it is relevant for our purposes may be extracted at this stage :
Mandatory Requirement for Stage 2 Offers
Confirmation of acceptance of final Transaction Documents.
Confirmation that the Networth criteria of the Bidder as per the requirement in the ITREOI document continues to be fulfillled.
No Consortium member or Group Entity of a Consortium member or nominated Airport Operator is participating in more than one Consortium bidding for the same Airport.
Consortium has an Airport Operator who has relevant and significant experience of operating, managing and developing airports.
Confirm that the Offer is capable of acceptance anytime during the Bid Period.
Confirm that the Offer commits the Offeror to the mandatory capital projects and the Initial Development Plan is in accord with the Development Planning Principles and the Traffic Forecasts (It is to be noted that Traffic Forecasts are only the Base level forecasts).
Equity ownership in the Joint Venture Company by a Scheduled Airline and their Group Entities does not exceed 10% and there is no participation by any airline that is a foreign entity and their group entities, subject to the exemption of Group Entities that are existing airport operators.
FDI in the JVC does not exceed 49%.
Minimum equity ownership by Indian Entities (other than AAI/GOI public sector entities) in the JVC is 25%.
Provision of suitable probity and security statements.
Lodgement of Offer that incorporates all the material required as set out in Appendices A to E, inclusive, in this Document.
Submission of Bid Bond.
84. A conjoint reading of para 2.3 and 5.2 (supra) would show that the Initial Development Plan was itself required to conform to the mandatory Development Planning Principle, Development Standards, Traffic Forecast and Mandatory Capital Projects. As to what these development planning principle, development standard and requirements are is elucidated in the Operation, Management and Development Agreement (OMDA) which the successful bidder was required to execute and a draft whereof had been furnished to the bidders before the submission of the bids. It is not as though the Initial Development Plans were for the first time tendered to the consultants and commented upon by them. The initial development plans accompanying the bids submitted by the bidders had all gone through a mandatory process of evaluation no matter only to find out whether the said plans were in conformity with the fundamentals which the RFP and the OMDA stipulated for the same. The fact that the bids were found eligible to go into the next phase of evaluation signified that the Plans were acceptable at least to the extent the same complied with the mandatory or the bare minimum requirement prescribed by the RFP. In other words even when one Initial Development Plan may have been better than the other, all such plans that went to the second stage of evaluation conformed to the fundamental requirements which the RFP and the OMDA stipulated. If an initial development plan was so inappropriate, unworkable and off the mark or in violation of the terms and conditions of the RFP that it would not deserve to be even considered for evaluation or allotment of the contract, it would not have gone beyond the first stage of evaluation. It would have, in any such situation, been screened at the very threshold on account of the deficiencies and defects of a fundamental character.
85. There is another aspect that we need to keep in mind. The technical consultant appointed by the Government of India and the AAI had prescribed the broad parameters within which the bidders were supposed to prepare and create an initial development plan. This exercise would put to test the innovative capacities and bring to bear on the process of upgradation, the experience of the bidder in similar plans around the globe. Airports Authority of India and the Government of India had not on the basis of the technical advice tendered to it by Airplan curtailed the options of the bidder in devising a suitable plan. All that was stated was that whatever plan the bidders may prepare, it must conform to the fundamental requirements stipulated in the RFP and the Operation, Management and Development Agreement. The master plan was upon the success of the bidder in the process of evaluation to be eventually prepared in consultation with all major stakeholders including the airlines, passenger groups and the Government of India. Para 8.3 of the OMDA stipulated the requirements and the essential features of the Master Plan. Paras 8.3.1 and 8.3.2 of the OMDA are in this regard relevant and may, thereforee, be gainfully extracted :
8.3.1 The JVC shall prepare a Master Plan for the Airport setting out the proposed development for the entire Airport, planned over a 20 year time horizon. The Master Plan shall include traffic forecasts for this period and link all planned major development to these forecasts. The Master Plan shall be prepared in accordance with and include the following :
(a) A statement of the overall development strategy and philosophy;
(b) The Development Planning Principles set forth in Schedule 1 hereof.
(c) Details of planned developments separately for each broad area, namely commercial development, surface transport, terminal areas, runway system, environmental management (including aircraft noise);
(d) Details of traffic forecasts and provide the traffic trigger points for all developments which are linked to traffic growth, indicating at what traffic level the project will be commenced and finished;
(e) Vision of how the Airport and each of its precincts will look at the end of 20 years and at critical intermediate stages and the ultimate vision of the Airport, at the end of the period when it reaches capacity;
(f) Report on the outcome of consultations with users, community, businesses and the government;
(g) Obstacle limitation surfaces for the airport and approach and takeoff areas;
(h) Noise exposure contours for areas surrounding the Airport for the traffic level forecast for the 20 years Master Plan period;
(i) Such other matters that may be specified by the GOI.
Notwithstanding anything to the contrary contained in this Agreement, the Parties hereby acknowledge and agree that nothing in this Article 83 shall be deemed to be an approval by AAI of any Master Plan (or any part thereof) submitted by the JVC in accordance with the aforesaid provisions, including but not limited to any minimum projected traffic. It is expressly agreed that it shall be sole responsibility and obligation of the JVC to ensure that the final Master Plan is in full compliance with the requirements of this Agreement and is, additionally, in accordance with the parameters set out in the State Support Agreement and nothing in this Agreement shall, in any way, absolve the JVC of its obligation to ensure that the final Master Plan is in accordance with the provisions of the OMDA and the State Support Agreement or any other obligations under any of the Project Agreements.
8.3.2 The first Master Plan for the Airport must be consistent with the Initial Development Plan and must incorporate the Mandatory Capital Projects. Any significant deviations from the Initial Development Plan must be fully explained. The Master Plan shall be made pursuant to full consultation with all major stakeholders, including but not limited to airlines, passenger groups and GOI.
86. The GRC had taken up the issue regarding the alleged deficiencies in the initial development plan submitted by Respondent No. 3 and queried why the contract need be allotted to the said respondent if it had scored just about 68% marks for its initial development plan. The consultants, however, suggested that the initial development plan submitted by Respondent No. 3 required changes but that the bidder was capable of doing so as part of the master plan process. This is evident from the GRC's minutes where it had made the following observations:
Based on the above, Bidders B and E are short listed for the next stage i.e. opening of financial bids in respect of Delhi airport. They also mentioned that the offer of Bidder B has some areas of weakness. These weaknesses are capable of being addressed and need to be addressed, as a failure to do so may potentially compromise the GOIs strategic objective, should this emerge as a Successful Bidder. In particular while the offer of Bidder B for Delhi airport gets a 80% score for development, this is in spite of the Initial Development Plan (IDP) being rated only at 68%. They also mentioned that the IDP of Bidder B needs to be changed but the Bidder is capable of doing that as part of the Master Plan process. They also recommended that in relation to Bidder B, confirmations need to be obtained about the specific persons who will undertake key management, planning and development roles (since the Offer provided for multiple nominations at each position) so that the nominated personnel with high levels of experience from the nominated pool for each position are made available.
87. It is also evident from the queries raised by the members of the GRC and the reply to the same by the consultants that the initial development plan submitted by Respondent No.3 for Delhi airport was implementable but was considered inappropriate since it used a larger area of land than otherwise required. The plan had accordingly been assessed as low to medium. The reply given by the consultants to one of the queries is, in this regard, as under :
With respect to the IDP of Bidder 'B' for IGIA, the Consultants explained that the plan envisages developing the whole of the midfield area as restricted airside area with no landside access. The plan incorporates high cost automated systems for passenger and baggage movement. Accordingly, the plan, although implementable, is not appropriate since it uses large area of land than otherwise required. Accordingly, the Plan has been assessed as to low to medium.
88. The following three distinct aspects emerge from the above:
(i) That the initial development plan submitted by Respondent No. 3 had been assessed for compliance with the mandatory requirements of the RFP and the OMDA and found to be compliant.
(ii) That the IDP submitted by Respondent No. 3 for Delhi airport was found to be implementable although assessed as low to medium on account of excessive use of the land. It was not a case of the plan being wholly incapable of implementation.
(iii) The plan could be modified in the master plan which ought to be prepared in consultation with the Government of India and all stakeholders including airlines, passengers etc.
89. An Initial Development Plan judged medium, could not be said to be the failure of a mandatory requirement leave alone a failure that could put a question mark on the prudence of the decision to make an allotment on the basis of such a plan. In the totality of these circumstances, thereforee, we do not see any perversity of any kind leave alone a legal or procedural infirmity in the approach adopted by GETE, the Government of India or the AAI in the matter of allotment of the contract to respondent No.3 on the basis of the Initial Development Plan submitted by the said respondent.
(d) GETE's criticism of the evaluation done by the consultants was unjustified :
90. The RFP envisaged evaluation of the technical bids received by the Government under two distinct heads, each carrying 100 marks. These were:
(a) Management Capability Commitment and Value Add and;
(b) Airport Development Capability Commitment and Value Add.
91. The RFP divided the total marks under different factors leaving the weightage to be assigned to each sub-factor enumerated under the factors to the evaluators. Since the petitioner's grievance is directed entirely against the moderation done by GETE under management capability commitment and value add, we shall refer to the division of marks in the RFP for each of the factors and that given by the evaluators for each of the sub-factors there under.
92. Out of a total of 100 marks under management capability commitment and value add, 25 marks were reserved by the RFP for the management capability (Experience) of the nominated airport operator to be divided further into nine sub-factors. The experience of prime Member (Indian/non-Indian) was to carry a total weightage of 12.5 marks to be divided under four sub-factors.
93. Similarly management commitment (Resources) was to carry 12.5 marks for the airport operator and Anr. 12.5 marks for the prime member (separately evaluating Indian prime members). Management Value Add was yet another broad head under which marks were to be allocated. There were three factors under this head viz. (a) HR Approach carrying 12.5 marks to be allocated under two sub-factor headings, (b) Transition Plan carrying 12.5 marks and (c) other carrying 12.5 marks under two sub-factor headings.
94. It is common ground that the consultants had divided 25 marks allocated under the RFP for management capability (experience of the nominated airport operator) equally among the nine sub-factors stipulated under the said factor. This meant that each sub-factor carried a weightage of 2.8 marks. In the case of experience of prime members (Indian/Non-Indian) carrying a weightage of 12.5 marks, the consultants had divided the said marks into four sub-factors on an unequal basis unlike what was done in the case of management capability/experience of the nominated airport operator. The experience of prime members (Indian/non-Indian) was allocated among the following four sub-factors :
Clause 1.2.1 Weightage Commercial/retail experience3.1Clause 1.2.2 Experience with major property development1.6Clause 1.2.3 Experience with infrastructure development4.7Clause 1.2.4 Experience with handling HR issues in ownershipchange situation3.1
95. Apart from the above sub-factors, the consultants had given unequal weightage to the sub-factors under Management Value Add (HR Approach) for which the RFP had reserved a total of 12.5 marks. The weightage given by the consultants for the sub-factors was as under:
Clause 3.1.1 Weightage Approach and Commitment to integration of AAIAirport employees into JVC9.4Clause 3.1.2 Proportion of AAI staff targeted for integration into theJVC by year 33.1
96. The Sreedharan Committee found fault with the above unequal weightage. It sought an Explanationn from the consultants whether the weightage given by it to sub-factors was determined before opening the technical bids or after. The answer to that query did not satisfy GETE. The consultants appear to have given an equivocal answer in as much as instead of stating whether the weightage was determined before the opening of the technical bids or afterwards, the reply was that they had given the weightage before 'marking the scores'. GETE was also of the view that if weightage was equal among the sub-factors under the major factor dealing with management capability and experience of the airport operator, there was no reason why experience of the prime members (Indian/non-Indian) ought to be dealt with differently. Sub-factors under the factor heading 'Experience of Prime Members (Indian/non-Indian)' carrying 12.5 marks also should, according to GETE, have been divided equally among the four sub-factors enumerated under the said factor. As a matter of fact, the consultants had, in their first report, clubbed sub-factors 1.2.2. and 1.2.3 and given them a weightage of 6.2 marks which was found fault with by the GRC and IMG who had directed fresh evaluation under the two factors separately. The consultants had, in the second report, allocated 1.6 marks to sub-factor 1.2.2 and 4.7 marks to sub-factor 1.2.3. The members of the IMG had reservations about this unequal weightage. According to them, the weightage to the two sub-factors ought to have been equal. GETE also adopted a similar line of reasoning and validated the evaluation by allocating equal marks i.e. 3.1 each to sub-factors 1.2.2 and 1.2.3. With this moderation, the sub-factors under the factor heading 'Experience of Prime Members (Indian/non-Indian)' carried 3.1 marks each just as the sub-factors under the other factor, namely, Management Capability (Experience of Nominated Airport Operator) carried 2.8 marks equally for all the sub-factors under the said major head. Similarly for the sub-factors 3.1.1 and 3.1.2 GETE had equalized the weightage at 6.25 for each sub-factor instead of what was assigned by the consultants.
97. It was argued by Mr.Rohtagi that GETE was not justified in adopting a uniform weightage for the sub-factors as according to him, one factor could be more important than the other. GETE which also comprised experts, however, had a different perception about things and felt otherwise. In its opinion, the division of the marks under the major factor would be more rational if they were spread out equally among all the sub-factors found under a given factor. There is no gainsaying that opinions may differ whether the sub-factors should have carried equal or unequal marks. One group of experts may find equal allocation to be the right thing while another group of experts equally qualified may favor an unequal weightage. A writ court would, in such a situation, be ill-equipped to determine as to which out of the two opinions was more logical or scientifically correct. All that one can say is that the allocation of weight ages to sub-factors was an issue on which there were two equally logical opinions possible. That by itself would not however be a ground for the Court to dub the choice made by the Government on the basis of one of the two opinions as perverse or to interfere with the allotment of the contract on that basis. The legal position regarding the approach to be adopted by the courts in matters where the decisions are taken on the basis of expert opinions is settled by a long line of decisions rendered by the apex court. Their lordships have in those decisions cautioned the courts from readily interfering with decisions which involve technical expertise not otherwise available to the court. The apex court has shown deference to the views of the experts, and reluctance to meddle with the decision unless of course the decision is vitiated by mala fides or is palpably perverse or illegal. We need not advert to all the decisions on the subject for a reference to some of them should in our view suffice.
98. In Federation of Railway Officers Association v. Union of India : [2003]2SCR1085 , the court held :
Further, when technical questions arise and experts in the field have expressed various views and all those aspects have been taken into consideration by the Government in deciding the matter, could it still be said that this Court should re-examine to interfere with the same. The wholesome rule in regard to judicial interference in administrative decisions is that if the Government takes into consideration all relevant factors, eschews from considering irrelevant factors and acts reasonably within the parameters of the law, courts would keep off the same.
99. In Balco Employees' Union (Regd.) v. Union of India : (2002)ILLJ550SC , the court observed :
In the case of a policy decision on economic matters, the courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the court is satisfied that there is illegality in the decision itself.
100. To the same effect is the view expressed by the Court in Tata Iron & Steel Co. Ltd. v. Union of India : AIR1996SC2462 where the court declared :
This is a case of the type where legal issues are intertwined with those involving determination of policy and a plethora of technical issues. In such a situation, courts of law have to be very wary and must exercise their jurisdiction with circumspection for they must not transgress into the realm of policy-making, unless the policy is inconsistent with the Constitution and the laws.
101. Reference may also be made to N.D. Jayal v. Union of India : (2004)9SCC362 where the Court held :
This Court cannot sit in judgment over the cutting edge of scientific analysis relating to the safety of any project. Experts in science may themselves differ in their opinions while taking decisions on matters related to safety and allied aspects. The opposing viewpoints of the experts will also have to be given due consideration after full application of mind. When the Government or the authorities concerned after due consideration of all viewpoints and full application of mind took a decision, then it is not appropriate for the court to interfere.
102. The first two aspects in relation to which GETE validated the evaluation process viz. weightage under sub-factors 1.2.2 and 1.2.3 under factor heading 'Experience of Prime Members (Indian/non-Indian)' and 3.1.1. and 3.1.2 under factor heading 'Management Value Add' cannot thereforee be found fault with.
103. The third aspect in relation to which GETE found fault with the technical consultants' evaluation was the award of marks for sub-factor 1.1.6 under the factor heading 'Experience of Nominated Airport Operator'. The RFP identified this sub-factor in the following words :
Clause 1.1.6 The performance of commercial operations at major airportsmanaged by the Airport Operatorcovering retail, property and other commercial operations,focusing on airports where non-aeronautical revenue is 40% or more of total revenue.
104. The Evaluation Committee had, in its first report, awarded 2.1 marks for both Delhi and Mumbai airport to the petitioner although the non-aeronautical revenue earned by its airport operator at major airports was less than 40% stipulated under the RFP. Reservations were expressed by GRC and by IMG regarding the award of these marks. According to GETE, instead of awarding 75% marks to the petitioner against this sub-factor even when it did not touch the bare minimum of 40% revenue stipulated under the RFP, it deserved only 50% marks for both the airports. Even here, the view taken by GETE cannot be said to be perverse for a bidder who does not touch the bare minimum of 40% non-aeronautical revenue stipulated under the RFP could not have been awarded 75% marks reserved for the said sub-factor. The GETE, it is noteworthy, did not despite the evaluation of the petitioner's airport operator to touch the minimum 40% revenue, totally delete the award of marks in its favor under this sub-factor. It moderated the evaluation by reducing 75% to 50% of the marks awardable against this sub-factor.
105. The fourth area in which GETE found an aberration in the process of evaluation was in relation to award of marks for sub-factor 1.1.8 under the factor heading 'Experience of Nominated Airport Operator'. This sub-factor related to experience of nominated airport operator in operating and developing airports in non-OECD countries. The Evaluation Committee had, for this sub-factor, given a weightage of 2.8 marks against which the petitioner had been awarded 2.1 marks. The GETE, however, was of the view that since the petitioner's airport operator did not have any experience in operating and developing airports in non-OECD countries, it was not entitled to any marks against this sub-factor as the RFP did not envisage any credit to be given for experience in OECD countries. The petitioner does not dispute the fact that Mexico is a OECD country. This is evident from the following averment made in the rejoinder filed on its behalf :
Mexico is member of the OECD and hence is a OECD country, however it is also a developing country.
106. What was argued by Mr.Rohtagi was that even when Mexico is a OECD country, it was also a developing country. According to him, GETE had failed to notice that RFP itself used the term 'Non-OECD countries and developing countries inter-changeably'. We do not think so. The RFP is unequivocal in so far as it makes experience in operating and developing airports relevant for evaluation of the bids. It is only experience in operating and developing airports in non-OECD countries that could count for award of marks under this sub-factor. The argument that a country can be a OECD country and a non-OECD country at the same time appears to us to be fallacious. If Mexico is a OECD country, any experience in relation to that country must go out of consideration. The GETE was, thereforee, correct in recommending deletion of the marks awarded to the petitioner for experience in a OECD country. It is not open to the petitioner to argue that even when Mexico is a OECD country, experience gained in it could still be taken into account as it is a developing country. What is relevant under the RFP is whether a country is OECD country or non-OECD country and not whether in the perception of one of the bidders, the same is developed, developing or under-developed country. The view taken by GETE in this regard was, thereforee, justified.
107. The fifth and the only other aspect in regard to which GETE had recommended a change was in relation to the award of marks against sub-factors 3.1.1 and 3.1.2 under the factor heading 'Management Value Add and HR Approach'. The Evaluation Committee had awarded marks on the principles that any bidder offering to absorb a minimum of 40% of the AAI staff would be awarded 50% of the marks and the balance 50% would be proportionately spread over for absorption of employees between 40% to 100%. The GETE found fault with that method. It recommended that since 40% of the existing employees of AAI had to be compulsorily absorbed by the JVC, any bidder who absorbed 40% would get zero marks and that the marks allocated against the two sub-factors would be distributed in proportion to the percentage of absorption between 40% to 100%. This would mean that any bidder who offered to absorb more employees would earn higher marks than the other who may just absorb 40% which was the bare minimum. There is no perversity even with this principle adopted by GETE. Since the absorption of 40% employees was the bare minimum which every bidder was required to assure, any bidder who offered absorption of higher percentage should have been entitled to the award of marks proportionate to what he would offer for absorption beyond 40%.
108. To sum up the discussion on the validation of the evaluation of the bids of the petitioner and Respondents No. 3 and 4 as also the other bidders, we can say that not only was the validation based on rational, non-discriminatory and uniform norms but the norms evolved by GETE were applied uniformly and in a non-discriminatory manner. The result was that the petitioner as indeed all other bidders except one lost in terms of the total marks which they had scored for Management Capability Commitment and Value Add. Out of the two bidders, namely, the petitioner and Respondent No.4 who had qualified as per the evaluation made by the consultants, the petitioner had by reason of the moderation done by GETE, fallen below the benchmark of 80% for both Delhi and Mumbai Airports while Respondent No. 3 continued to qualify even after the said moderation.
109. Similarly, the marks awarded to all other bidders were reduced except bidder 'A' viz. Essel-TAV whose marks for Delhi Airport marginally increased from 37.6% awarded by the consultants to 40.4% awarded by GETE. For Mumbai Airport, there was a marginal upward change even in the marks awarded to bidder 'C' viz. D.S. Construction Ltd. whose performance rose from 73.1% to 73.3% for both the airports.
110. It is noteworthy that there is no complaint regarding a uniform and non-discriminatory application of the norms adopted by GETE to the bids of all the bidders. In other words, not only in so far as the individual sub-factors in regard to which GETE interfered with the evaluation of the consultants, but also the application of the norms formulated by it to all the bidders uniformly, there is neither any illegality nor any perversity or discriminatory treatment at the hands of GETE.
111. We may before parting with this aspect of the matter, notice one other submission which Mr.Rohtagi forcefully urged before us. It was contended by him that the GETE had, while validating the evaluation process, taken note of only such of the matters pointed out by the IMG as related to the petitioner and ignored the objections which were raised by them in relation to the respondent GMR. The GETE had thus according to Mr.Rohtagi done an incomplete exercise even while validating the evaluation process qua Management Capability of the bidders.
112. We have, while dealing with the criticism against GETE's evaluation, already held that the terms of reference to GETE did not require it to evaluate afresh the bids received by the Government. GETE was constituted to validate the evaluation process, wherever it required to be so validated to bring objectivity to the evaluation process. It had accordingly seen the record and the concerns shown by the IMG and the GRC in regard to the various aspects. This is evident from the following passage from the report of GETE :
3.1.2 While examining the assignment of marks to the various bidders we kept in mind the issues raised by the members of the Inter Ministerial Group but we were not solely guided by their views. We also examined in a dispassionate way whether there was any flaw or bias in the exercise of subjective ness while assigning marks to the different consortiums.
113. GETE had identified five different aspects that required to be validated not because they related to the petitioner but because those aspects required to be addressed for a correct and objective evaluation of all the bids including the respondents. Merely because GETE had not found fault with the evaluation under the other factors or sub-factors would not, however, make the corrective process in regard to the sub-factors identified by it unacceptable. It would in fact mean that GETE did not find any error or aberration in the evaluation of the bids in so far as the rest of the factors or sub-factors were concerned. The validation process undertaken by GETE had been found to be in order and satisfactory even by the EGoM as is evident from the following passage from its minutes of the meeting held on 24.01.2006:
The EGOM felt that the exercise carried out by the Group of Eminent Technical Experts sufficiently validated the final marks which were now available with the EGOM. The EGOM also noted that after the GETE's exercise, while the markings of the bidders underwent marginal changes, the ranking among the bidders, for both Mumbai and Delhi, remained the same.
114. If the entire evaluation process is viewed from a correct perspective, it would lead one to conclude that the evaluation by the consultants, its criticism by GRC, IMG and the Committee of Secretaries as also the moderation done by GETE was a composite process - one integral exercise though undertaken at different levels by different individuals all contributing their views and perceptions about how the process should be conducted and what ought to be the end result, to enable the Government to take a final view. So viewed, the decision-making process appears to us to have been fairly transparent in which every participant, at whatever level his participation was required, had the freedom to express his views and concerns which, in turn, provoked responses to address the concerns that were expressed and to find corrective solutions ensuring at the same time that whatever norms and standards are evolved, the same are rational, non-discriminatory and applied uniformly to all the bidders. The fact that the ultimate decision has evolved through a multi-layered decision making process, eliminates the possibilities of any mala fides or arbitrariness and brings in objectivity which must permeate every governmental action especially when it is handing out pecuniary benefits in the form of contracts, licenses or quotas. The absence of any allegation of mala fides against any individual is in that backdrop an indication of the process being bona fide, fair and objective. Question No. 3 is, in the light of the above, answered in the negative.
Re: Question No. 4 :-
115. The evaluation done by the consultants as moderated by GETE and the recommendations of the Committee of Secretaries and the Ministry of Civil Aviation were submitted to the EGoM to take a final decision. The EGoM decided to accept the evaluation done by the consultants as moderated by GETE. It, however, found that despite a long and arduous process, the Government had only one technically qualified bidder for the two airports which had, in the words of the EGoM created a very piquant situation requiring urgent action. The EGoM, thereforee, decided that not only should the process of modernization and restructuring be gone a head with, but it should be done for both the airports. It discussed the two options which the Government had and came to the conclusion that it had no option but to slightly modify the RFP by re-visiting the technical pre-qualification criteria in an absolutely transparent, fair and equitable manner. By this option of mid-stream correction of the process, it aimed at saving huge administrative cost of re-tendering and a ten days delay. This is evident from the following para appearing in the minutes of the EGoM meeting dated 30th January, 2006 :
Options 21 The EGOM felt that if it accepted the recommendation of the COS, to award Delhi airport to bidder (B), the options then available to the Government for Mumbai airport was either to give the work to AAI or call for fresh bids or change the criteria so that more than one bidder could go forward to the next stage of the selection process.
a. It was noted that the funds required for Mumbai were nearly Rs. 6131 crores and AAI also had the task of modernizing non-metro airport for which at least Rs. 4662 crores were required. The reserves with AAI were just not enough to cope with this magnitude of fund requirement. AAI may also take time in evolving world class management practices and would not have access to technology as would some of the JVCs who had bid.
b. It was felt that the option of calling for fresh bids at this stage was not a viable option at all. GETE, the Committee of Secretaries and even the Attorney General had felt that the process should be gone ahead with. Fresh bids would be difficult since the plans given by the bidders were now known to all. To compile a new RFP document, call for bids and evaluate them would unduly delay the process. This would also lead to an inevitable loss of investor confidence. Also if the first process failed, it would impact later modernization plans. The delay in finalizing a successful bidder for the second airport through fresh bids could have an immediate adverse impact on the Commonwealth Games as well as the mounting security and safety concerns.
Powers to modify RFP
22 In view of the above the EGOM decided that it had no option but to slightly modify the recommendation of the COS by revisiting the technical pre-qualification criteria as contained in the RFP in an absolutely transparent, fair and equitable manner. The EGOM felt that the option of mid-stream correction of the process would be in public interest and also save huge administrative costs of retendering and the attendant delays.
116. The modification of para 5.4 of the RFP was accordingly ordered in the following terms :
Modification of RFP
23 The EGOM then decided that para 5.4 and other provisions in the RFP which lay down the process for the transaction till the technical pre-qualification stage should be modified as under :-
a. The EGOM recognized the unique position of bidder B who has met the minimum requirement of 80 per cent marks under each criterion both in the original evaluation by the EC as well as in the moderation done by GETE. Hence, while going forward with the process, EGOM concluded that this unique position of bidder B should be recognized.
b. The EGOM concluded that at least four bidders for each Airport should be allowed to go forward to the next stage of the selection process so that there is adequate competition among the financial bids. EGOM also noted that if this approach is adopted, the minimum qualifying marks would remain 50 per cent under management criteria as well as development criteria and that the technical standards would not have been diluted affecting performance and outcome. The rankings would be done on the basis of the total marks obtained by each bidder and the consequent ranking (para 18).
c. The EGOM noted that the alternative of prescribing the minimum qualifying mark of 50 per cent under each criterion (management and development) would yield the same result.
d. Since bidder B had emerged with rank No. 1 in Delhi as well as Mumbai, and bidder B had satisfied the original minimum qualifying mark of 80 per cent for both airports, it was decided that bidder B would be declared the successful bidder for both airports and would be given the right to choose one of the two. However, it was decided that bidder B would be required to match the highest financial bid among the four bidders for that airport, in order to protect the revenue interest of the Government.
e. For the airport which would remain after bidder B's choice, the bidder whose financial bid was the highest would be declared the successful bidder. However, if the financial bid of bidder B was higher for the remaining airport, the successful bidder would have to match the financial bid of bidder B.
117. While dealing with Question No. 2, we have already held that the Government and the Airports Authority of India had reserved ample authority to modify the terms of the RFP or to amend the information, terms, procedures and protocols set out therein at any stage. All that we need to add is that apart from para 6.7 of the RPF which specifically reserved to the AAI/GOI the right in its absolute discretion to amend the RFP, para 3.4 of the same in terms reserved to the AAI/GOI the power to determine the structure and timing of the transaction process following the submission of binding offers. This included the evaluation of binding offers and matters incidental thereto. There was, thereforee, no illegality arising from lack of power or jurisdiction on the part of the AAI/GOI in making a suitable amendment in the RFP which amendment it considered necessary in public interest. There was similarly no irregularity, procedural or otherwise, in the making of the said modification, especially when it had been made at a stage prior to the opening of the financial bids. The argument that the modification ought to have been preceded by a notice to the tenderers or reasons ought to have been conveyed to the tenderers has already been rejected by us while dealing with Question No. 2. All that we need point out is that the Government had the absolute discretion to determine the terms and conditions subject to which it would invite tenders. No tenderer could possibly find fault with the conditions subject to which such tenders are invited. That is particularly so when the conditions upon modification were uniform in their application and did not prefer one tenderer over the other in an arbitrary or discriminatory fashion. Having accepted the terms of the RFP, the petitioner cannot grudge the exercise of the power of amendment vested in the AAI or the GOI or read into that power limitations which are not otherwise stipulated. The amendment to the RFP was, in our opinion, necessitated by the concern of the Government to initiate the process of modernization of both the airports without any further delay implicit in the initiation of any fresh tender process especially when such process was global in nature. The minutes of the EGoM and the averments made in the counter affidavit filed on behalf of the Government of India sufficiently establish that the power of variation of the RFP was exercised for bona fide reasons and in public interest.
118. That brings us to the second part of the question, viz. whether there was any illegality, irregularity or impropriety in the allotment of Delhi Airport in favor of Respondent No. 3. Our answer to that question also is in the negative. Respondent No. 3 had, as seen earlier, emerged as the only eligible tenderer after the moderation of the evaluation process by GETE for both the airports. The decision of the EGoM as approved by the Government to recognize the unique position of Respondent No.3 and to give an option to it to choose one of the two airports was, thereforee, perfectly logical. If a rigorous process of evaluation at various levels based on a meticulous assessment of the various aspects considered relevant under the RFP had resulted in Respondent No.3 emerging as the only eligible candidate for allotment, there was no valid reason for the Government to decline an allotment in its favor. As a matter of fact, the allotment of one of the two airports to GMR may as well have been free from the rigours of any amendment which the Government made in public interest and the compulsion arising from the need for immediate modernization of the other airport also. Since however GMR had emerged as the eligible bidder, the Government's concern that it may get away with an allotment with a relatively low financial offer was understandable. The Government, thereforee, made the amendment to para 5.4 of the RFP relevant even to the allotment in favor of Respondent No.3 by prescribing that Respondent No.3 shall match the highest offer received by the Government of India/AAI from any one of the four bidders whom it considered technically qualified for that purpose. The object of declaring three other bidders apart from the petitioner technically qualified for both the airports was, in no way, to jeopardise the entitlement of the petitioner to an allotment. It was only meant to determine the highest financial bid which Respondent No.3 would be called upon to match. The decision to modify para 5.4 of the RFP and the precise modification can be understood only in that context. When read as a whole, it lends itself to only one interpretation viz. the Government had decided to allot one of the two airports to Respondent No.3 provided it agreed to match the highest financial offer made by four other bidders who although not eligible under the RFP were deemed to be technically qualified for that purpose. There is, in that view of the matter, no illegality or irregularity in the allotment of the contract for Delhi Airport in favor of Respondent No.3 which allotment not only ensured that the best out of the bidders is chosen for the work in question, but also at the highest financial offer which the Government of India had received for the same. Question No. 4 is, in that view, answered in the negative.
Re : Question No. 5 :-
119. The evaluation of the bids as moderated by GETE had left Respondent No.3 G.M.R. Infrastructure Ltd. as the only bidder eligible for allotment to both the airports. Since, however, allotment of one of the airports to the said respondent would have still left the other airport with the Government, the strategy to be adopted for the allotment of the said airport had to be evolved. The Government had the benefit of the recommendations made by GETE who had, in this connection, opined that re-bidding the airport to select another consortium would involve considerable delay particularly when the restructuring and modernization of the second airport could brook no such delay. It had, thereforee, recommended that the other airport should be taken up for improvement and modernization through a Special Purpose Vehicle (SPV) set up on the lines of Delhi Metro Rail Corporation limiting the Government and Airport Authority of India's participation in the same to 50%.
120. The Committee of Secretaries and the Ministry of Civil Aviation were not, however, impressed by that suggestion. For Delhi Airport, they had recommended development through joint venture route after negotiation with the technically qualified bidder. In so far as the Mumbai airport was concerned, the COS and MOCA had recommended that the said Airport be included in the next round of bids to be invited for airport modernization along with Chennai and Kolkata. They had also said that the GETE's recommendation for adopting the SPV route may be examined by the Planning Commission in consultation with the Ministry of Civil Aviation as a possible alternative for modernization of airports.
121. The EGoM upon consideration of these recommendations felt that if the recommendation of the Committee of Secretaries were to be accepted, only Delhi airport would be developed as only one bidder had been technically qualified for both Delhi and Mumbai Airports. It noted that because of the proposal to modernize and restructure the two airports, no investment of any significant amount had been made in Delhi and Mumbai since 1998 and even earlier. It also noted that for the period April-November 2005-06 as compared to the same period for 2004-05, the overall Aircraft Movement had increased by 12.1%, the overall Passenger Traffic by 19.2% and the overall Freight by 9.6%. It was, thereforee, of the view that more than seven year after the announcement for modernization and after all the processes had been gone through, a decision needed to be taken without any further delay. It was in its opinion absolutely necessary to go ahead with the modernization of both the airports because of the Commonwealth Games, the sustained growth in Aircraft Movement, Passenger Traffic and increase in freight. It also expressed grave safety and security concerns because of the immense crowding over both the airports and observed :
A very conscious decision had been taken to go the JVC route for Mumbai and Delhi airports. However, after a very long and arduous process the Government was left with only one technically qualified bidder for the two airports (applying the benchmark of 80 per cent) which had created a very piquant situation requiring urgent action. If no decision was taken on the basis of the bid documents, there would also be a loss of investors' confidence in the airport sector. Given the factors stated above, there was unanimity that not only should the process of modernization and restructuring be gone ahead with, but it should be done for both the airports.
122. It was, in the light of the above, that the EGoM examined the options available to it. It recognized three distinct options to deal with the situation arising from the emergence of only one successful bidder. These were :
(i) Give the modernization work for Mumbai Airport to Airports Authority of India for execution.
(ii) Call for fresh bids for the said airport and make an allotment ; and
(iii) Change the criteria already stipulated so that more than one bidder could go forward to the next stage of the selection process.
123. The first two options were considered and rejected by the EGoM for reasons which are self-explanatory. The relevant portion of the minutes rejecting the first two options has already been extracted at para 115 of this judgment. That left the EGoM with the third option, namely, modify the recommendation of the Committee of Secretaries by re-visiting the technical pre-qualification criteria in the RFP and introduce a mid-stream correction of the process to save huge administrative costs involved in re-tendering of the work and attendant delays. That is precisely how modification of para 5.4 of the RFP came into effect.
124. The modified provisions of para 5.4 of the RFP had two distinct implications. One recognized the unique position which GMR consortium had on account of its being the only eligible tenderer as per the original qualifying standards. The modified para 5.4 of the RFP conceded an allotment in favor of GMR subject to its agreeing to match the highest financial bid received for the airport that it may choose. The modified para for that limited purpose brought in three other tenderers to declare four tenderers in all as technically qualified for both the airports. What is noteworthy is that the bringing in of the other three tenderers for the airport which would go to GMR was with the limited object of identifying the highest financial bid received for Delhi Airport and asking GMR consortium to match the same, and no more.
125. The second aspect of the modification related entirely to the airport which would be left after GMR had made its choice. In relation to this airport, the benchmark of 80% was lowered to take in four bidders as technically qualified for the said airport. The EGoM noted that by this process, the minimum qualifying marks would remain 50% under the Management and Development criteria and that the lowering of the benchmark to that level would not, in any way, dilute the technical standards so as to affect the performance and the outcome of the process of evaluation and allotment. With the lowering of the benchmark, while four bidders would come into the fray for the second airport, the real competition would in any case remain among three bidders as GMR, the fourth bidder, would be disqualified for taking a second airport. The allotment would then be based entirely on the highest financial bid offered by the said three tenderers. The modification also stipulated that if the financial bid of GMR for this airport was higher, the successful bidder for the said airport would have to match the financial bid of the said bidder.
126. The above modification was, it is significant to note, made at a stage when the financial bids had not yet been opened. No one, thereforee, knew as to what the result of the modification would be in so far as the financial bid which GMR may be required to offer for the airport it may choose. It was also not known as to who would emerge as the successful bidder for the other airport. At the stage of the modification, the petitioner, Respondent No. 4 and D.S. Constructions Ltd. all having been declared eligible on account of the lowering of the benchmark for the second airport had a fair chance to win the contract on the basis of their financial bids. No special advantage of any kind had been granted to anyone of the said three bidders. The advantage conceded uniformly to all the three bidders was in the nature of declaring them technically eligible to go into the fourth stage of evaluation process. In so far as that stage of evaluation was concerned, the RFP remained unaltered. This implied that out of the three eligible bidders, the contract would go to the one who would offer the highest bid subject to the condition that if the bid offered for the second airport by GMR was higher than any such bid, the successful bidder would match the same.
127. There is in our opinion complete transparency in the decision leading to the modification of the RFP and uniformity in its application to the bidders who qualified in the process. The standard by which the bidders were to be originally judged had to be lowered not because the intention was to bring in any particular bidder who was not eligible but because of an unforeseen situation that had arisen on account of their being no eligible bidder left in the fray to claim the second airport after GMR had taken its pick. The altered standards were applicable uniformly and have indeed been applied uniformly. That being so, any grievance against the norms is wholly misplaced.
128. Mr.Rohtagi argued that there was no logical rationale in bringing the benchmark of 80% down to 50%. The lowering of the benchmark was according to him wholly arbitrary. We do not think so. If the Government of India did not find any bidder eligible for the second airport on account of the high benchmark originally stipulated, nothing prevented it from relaxing the said requirement to ensure that the current process of tenders and their evaluation itself culminated in a decision for allotment of the said airport. The power to modify the RFP was available to the Government in abundance as already noticed earlier. The lowering of the benchmark was not so much by way of lowering the percentage of marks as it was to ensure that at least four bidders were declared qualified. In that process, the condition of eligibility got lowered to 50% which, according to EGoM, did not compromise the performance and outcome of the process. A writ court cannot possibly interfere with any such decision just because in its opinion instead of declaring four bidders eligible, the Government could or ought to have declared either a lesser or a larger number of such bidders as technically qualified. It would also not be open to a writ court to stipulate an alternative standard by which the technical eligibility of the candidates could be determined. Whether or not 50% marks was a reasonable enough standard to prescribe was a matter which lay entirely with the Government. Suffice it to say that there is nothing irrational, arbitrary or suspicious about the decision of the Government by which it declared four bidders eligible for the second airport resulting in the benchmark of eligibility being lowered from 80% to 50% marks.
129. Mr.Rohtagi next argued that instead of allotting the contract to Respondent No.4 on the basis of its financial bid, the Government ought to have allotted the same to the petitioner as the petitioner had better technical qualifications. It was submitted that if the Government had conceded a unique position to GMR on account of its score being above 80% for Delhi Airport, there was no reason why Mumbai airport should not have been given to a bidder who was technically the next best. The argument, though attractive, does not stand scrutiny. We say so for more than one reasons. Firstly because the allotment of the second airport on the basis of the next highest technical score was never indicated to be an option by either GETE, Committee of Secretaries or the EGoM. Secondly because the Government had absolute discretion to decide whether and to what extent the conditions of the RFP regarding eligibility of tenderers and the award of contract should be modified. If the Government had taken a decision to modify para 5.4 of the RFP only to the extent indicated earlier, no fault can be found with the said modification on the ground that allotment of the contracts could as well have been made on the basis of some other criterion which may in the opinion of the petitioner or that of the Court have been equally fair and reasonable. The question is not whether the standard applied by the Government for making the allotment was the only conceivable standard available to it. The question is whether the standard adopted by it is fair and non-discriminatory even assuming that there could be some other standard or method for such an allotment which was in itself equally fair. Just because in the opinion of a writ court it is possible to evolve a better policy would not be a reason enough to interfere with the policy which the competent authority has evolved so long as such policy is neither discriminatory nor illegal or arbitrary in any manner.
130. That apart, a modification of the RFP in the manner suggested by Mr.Rohtagi could well have been assailed as an attempt to benefit a known tenderer. Any allotment based on a standard which was evolved after it was known who the beneficiary of such changed standard would be, could be assailed as mala fide and legally bad. The standard would then symbolize a cap that would fit only the petitioner and none else. The criticism could as well be that the Government had altered the standards with an avowed object of making an allotment to a particular bidder. This would have given rise to avoidable legal complications.
131. In the light of what we have said above, we do not find any legal infirmity in the allotment of the contract for Mumbai airport in favor of Respondent No.4 who had admittedly emerged as the highest financial bidder for the said airport having offered 38.7% of the revenues to the Government as against 21.33% offered by the petitioner. Question No.5 is accordingly answered in the negative.
132. In the result, this writ petition fails and is hereby dismissed but in the circumstances without any order as to costs.