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TMI Blog2020 (2) TMI 1391X X X X Extracts X X X X X X X X Extracts X X X X ..... s is evident from Regulation 5(6) under which the Board is to scrutinise the bids of only those entities which fulfil the minimum eligibility criteria. The minimum eligibility criteria include the technical capability of the bidding entity to (i) lay and build; and (ii) operate and maintain a CGD network. Both of them are defined with reference to qualifying criteria. Besides the technical criteria, the minimum eligibility requirements under Regulation 5(6)(e) incorporate the financial ability to execute the project and to operate and maintain it in the authorised area. The financial criteria are defined with reference to the minimum net-worth of the bidding entity. The net-worth required is dependent on the population of the GA under the 2011 Census. The minimum net-worth required is specifically defined with reference to the 2011 census figures of population for the GA. The bidding entity is also required to submit a bid bond in the form of a performance bond guarantee. The quantum of the guarantee is dependent on the population of the GA. Regulation 7 (1)(b) requires the successful bidder to achieve the target in terms of an annual work programme within eight contract years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk the 'highness' factor of domestic PNG connections to the 2011 Census data. In Clause 4.4.1 of the Bid Document, the Board reserved to itself the right to reject any unreasonably high or low bid. In Addendum-1 to the Bid Document, the Board clarified to all prospective bidders that the evaluation of whether a bid was unreasonably low or high would be conducted on a case to case basis at the time of bid evaluation. There is no merit in the submission that there was a breach of the principles of natural justice in calling only the bidders with the highest composite score to explain the reasonableness of their bids. None of these bidders was being called upon to revise or improve their bids. In terms of the CGD Authorisation Regulations, the bidder with the highest composite score has to be declared as the successful bidder. If despite having the highest composite score, a bidder was being considered for rejection by the Board, it was that bidder who was justifiably called to explain the reasonableness of the bid. The other bidders had no locus to participate in the process. It is a settled principle of law that the Rules of natural justice are attracted where a decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulatory Board Act 20065. By their separate judgments dated 28 February 2019, the Chairperson and Member Technical (Petroleum and Natural Gas) rendered divergent findings, following which the Chairperson directed that the proceedings in the two appeals be placed before the judicial member. The judicial member recused from hearing the appeals on 7 March 2019. This led to the institution of the present appeals before this Court. Noting that no other judicial member was available in the APTEL to conduct the hearing, this Court by its order dated 1 April 2019 admitted the appeals and issued directions in exercise of its powers Under Article 142 of the Constitution for the transfer of the proceedings before the APTEL to this Court in order to bring finality to the present dispute. In assessing the merits, the Court has had the benefit of appraising the differing views which have been expressed by the Chairperson and by the Member Technical (Petroleum and Natural Gas). 3. The APTEL has been constituted in terms of Sub-section (1) of Section 30 of the PNGRB Act which is extracted below: 30. Appellate Tribunal. (1) Subject to the provisions of this Act, the Appellate Tribunal establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 16, insofar as is material contains the following stipulations: 16. Authorisation.--No entity shall-- (a) lay, build, operate or expand any pipeline as a common carrier or contract carrier, (b) lay, build, operate or expand any city or local natural gas distribution network, without obtaining authorisation under this Act: ... Under Section 19 of the PNGRB Act, the Board may grant an authorisation for a city or local natural gas distribution network either on the basis of an application or suo moto. Before it does so in a specified GA, the Board is under a mandate to give wide publicity of its intent to do so. Upon inviting applications from interested parties, the Board may select an entity in an objective and transparent manner as specified by regulations for such activities . 5. On 19 March 2008, the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations 2008 CGD Authorisation Regulations were notified. The CGD Authorisation Regulations were amended on 21 June 2013, 7 April 2014 and 6 April 2018. The CGD Authorisation Regulations, as amended in 2018, subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.1 million or more but less than 0.25 million ₹ 100 million Less than 0.1 million ₹ 50 million The minimum net-worth of the bidding entity is thus linked to the population of the GA the entity is bidding for, as set out in 2011 Census data. 7. Regulation 7 of the CGD Authorisation Regulations provides the criteria for determining how the Board should evaluate rival bids for the same GA. Regulation 7 is quoted below, in its entirety: 7. Bidding criteria. 1(a) The Board, while considering the proposal for authorisation, shall tabulate and compare all financial bids meeting the minimum eligibility criteria, as per the bidding criteria specified below, namely: Sl. No Bidding Criteria Weightage % Explanation 1 Lowness of transportation rate for CGD - in rupees per million British Thermal Unit (Rs./MMBTU) 10 Bidder is required to quote transportation rate for CGD only for the first contract year which shall not be less than ₹ 30/MMBTU. Rates for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year which shall not be less than ₹ 30/MMBTU. Rates for the subsequent contract years shall be derived considering the quoted rate and escalation as per Note. 2 Lowness of transportation rate for CNG - in rupees per kilo gram (Rs./kg) 10 Bidder is required to quote transportation rate for CNG only for the first contract year which shall into be less than ₹ 2/kg. Rates for the subsequent contract years shall be derived considering the quoted rate and escalation as per Note. 3 Highness of number of CNG stations (online and daughter booster stations) to be installed within 8 contract years from the date of authorisation 25 - 4 Highness of number of domestic piped natural gas connections to be achieved within 8 contract years from the date of authorisation 55 - Note: Annual escalation shall be considered from the second contract year and onwards based on the Wholesale Price Index (WPI) Data (2011-12=100) for All Group/Commodity , as normally avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive) CNG stations (cumulative) By the end of contract year % of work programme By the end of contract year % of work programme 1st Nil 1st Nil 2nd 10 2nd 10 3rd 20 3rd 20 4th 30 4th 30 5th 40 5th 40 6th 50 6th 50 7th 60 7th 60 8th 70 8th 70 9th 80 9th 80 10th 100 10th 100 Note - In case derived numbers are in fraction, the same shall be rounded off to the nearest whole number and fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the inch-kilometre of steel pipeline to be laid within eight contract years from the date of authorisation. The weightage ascribed to this parameter is 10 per cent. Regulation 7(1)(b) sets out a year-wise work programme indicating the progress which must be achieved by the successful bidder every year during the course of eight contract years from the date of authorisation. Under Regulation 7(3), a bidding entity with the highest composite score, in terms of the criteria contained in Sub-regulation (1), is to be declared as the successful bidder. This is illustrated in Schedule C(1) of the CGD Authorisation Regulations. Schedule C(1) contains the following illustration of the manner in which the weightage for PNG connections is to be ascribed: (E) Number of PNG domestic connections Let, P1 = Number of PNG domestic connections by the 1st entity P2 = Number of the PNG domestic connections by the 2nd entity P3 = Number of the PNG domestic connections by the 3rd entity Assume P1 is higher than P2 and P2 is higher than P3.; The highest number of PNG domestic connections bid (HP1) shall be given a score of 100% and the number of the other PNG domestic connections b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project under the ninth round of CGD bidding is 2018 to 2026. The period for commercial operation is between 2018 and 2043. 10. From an analysis of the CGD Authorisation Regulations, it becomes evident that the 2011 census figures have been utilised to peg the net-worth requirement in Regulation 5(6)(e) and the value of the performance bond to be submitted to the Board post authorisation in Regulation 9. Significantly, Regulation 7, which provides a table specifying the five bidding criteria to evaluate competing bids, does not link the said criteria with the census figures of 2011. Facts of the present appeals 11. On 12 April 2018, the Board initiated the bidding process for authorising entities to lay, build, operate or expand CGD networks for the ninth round. The bids were invited by means of an application-cum-bid-document for each GA. With respect to the relevant GA, Bid Document . The bidding process covered various GAs, including those of (i) GA 51 -Puducherry District; (ii) GA - 61 Kanchipuram District; and (iii) GA 62 - Chennai-Tiruvallur. 12. Clause 1.1. of the Bid Document was titled 'Geographical area and related information'. Clause 1.1.1 stipulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right to accept or reject any bid which it considered to be unreasonably high or low : 4.4 PNRGB'S RIGHT TO ACCEPT OR REJECT ANY OR ALL APPLICATION-CUM-BIDS 4.4.1 PNRGB reserves the right to reject any Application-cum-Bid comprising quoted work programme considered by it to be unreasonably high or low. On 31 May 2018, Addendum-1 to the Bid Document was issued by the Board. Clause 14.2, inserted as a result of Addendum-1, contained the following clarification: 14.2 What should be considered to be the level of unreasonably high or unreasonably low quotes shall be decided by Board at the time of bid evaluation on a case to case basis after considering the relevant factors. According to the above stipulation, the Board clarified that the determination of an unreasonably high or low quote would be made by the Board at the time of bid evaluation on a case to case basis after considering the relevant factors. 14. On 10 July 2018, three bid evaluation committees ( BECs ) were nominated by the Board for evaluating the bid documents. On 12 July 2018, a press release was issued by the Board setting out the date and time for the opening of technical bids for diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connections as 100% of Household (Census 2011 data). Beyond 100% household may be treated as unreasonable quote. The Board Note was approved by the members of the Board including the Chairperson. Between 24 July 2018 and 18 August 2018, the financial bids submitted by the bidders for various GAs were opened by the Board. 16. The Board Note of 23 July 2018 adopted the Census 2011 data on the total number of households as the basis for computing the minimum and maximum limits for the purpose of determining unreasonably low or unreasonably high quotes. The Board Note stipulated that 2 per cent of the total households in terms of the Census 2011 data would be regarded as the minimum quote. Anything below 2 per cent would be considered unreasonably low. Similarly, on the upper end of the spectrum, the Board Note proposed that 100 per cent of the total households in terms of the Census 2011 data would be regarded as the maximum. A quotation beyond this upper limit would be construed to be unreasonably high. Now, two features of the note of the Board Note dated 23 July 2018 must be noted. First, the Board Note was generated after the last date for the submission of bids. Second, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved the issuance of LOIs to 18 successful bidders for 48 GAs. The press release indicated that the remaining GAs were being evaluated and the outcome would be notified shortly. 19. On 9 August 2018, an agenda note was issued by the Board noting that in pursuance of the decisions which were taken by the Board on 3 August 2018, letters have been addressed to the entities which had obtained the highest composite score but had quoted unreasonably low PNG connections, to confirm their acceptance of the minimum requirement of 2 per cent of households as per the 2011 Census data. Table 5 to the agenda note contained a tabulation of bids which were liable to be rejected due to unreasonably high or as the case may be, unreasonably low quotes. Among these bids were the bids received from H1 bidders who had quoted unreasonably high PNG connections for the three GAs which form the subject matter of the present appeals. These were: Table -5 Sl No GA No. Name of GA Name of bidding entities Quote Remarks 11. GA 61 Kanch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PNG domestic connections were reflected in the following table: Sl No. GA No. GA name Bidding Entity Quoted for PNG Domestic connections as % of households as per 2011 census 1. 61 KanchipuramDistt. Consortium of AG P LNG marketing Pte. Ltd. and Atlantic Gulf Pacific Company of Manila Inc. 114% 2. 62 Chennai Tiruvallur Districts Torrent Gas Pvt. Ltd. 157% 3. 72 Medchal, Rangareddy Vikarabad Districts Torrent Gas Pvt. Ltd. 220% The minutes of the meeting went on to record that: During deliberations in the Board, the Board referred to Clause 4.4.1 of ACBD which reads, PNGRB reserves the right to reject any application cum bid comprising quoted work program considered by it to be unreasonably high or low. In terms of this Clause vide note dated 23.07.2018 (i) lower and upper limits were decided for PNG domestic connections (ii) low ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olds as per 2011 Census data should not be considered unreasonably high. The agenda note contained a tabulation of the percentage of PNG penetration in the projected households in 2026 with respect to the number of households as per the 2011 Census. The comparative table is extracted below: Sl No. GA ID GA PNG connections quoted by the bidder HH as per 2011 Census i.e. Upper Limit of PNG Connections fixed by PNGRB Projected HH in 2026* PNG penetration in 2026 as per PNGRB upper limit PNG penetration in 2026 as per H1 bidder A B C D E F G=(E/F) *100 H=(D/F) *100 1 51 Puducherry 2,75,000 2,31,513 3,91,852 59% 70% 2 61 Kanchipuram 11,51,111 10,06,245 20,89,765 48% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 to 2011). It was observed that penetration of PNG domestic connections based upon upper limit fixed by PNGRB with reference to projected number of households in 2026 varied from 45% to 59%. However, penetration of PNG domestic connections based upon quoted PNG connections with reference to projected number of households in 2026 varied from 55% to 99%. The variation between two sets of numbers is 7% to 54%. (c) The Board observed that the highest variation of 54% is in GA-72, which is based on untenable assumptions made by the bidder as described in Para 14.3 of the agenda note. Due to this, 10,05,300 PNG domestic connections quoted by the bidder are 99% of the projected households by PNGRB in 2026, which is unreasonably high. It was also observed that for the remaining 3 GAs, the variation between two sets of numbers given in para 15 of the Agenda note is 7% to 23% of projected number of households in 2026 and PNG penetration would be in the range of 55% to 79%. (d) The Board also referred to Regulation 16(2) of CGD Authorisation Regulations, which provides for rates of pre-determined penalty for shortfall in achieving cumulative work program targets for each contract year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on the website and without communicating it to Adani Gas Limited. Following the institution of proceedings by Adani Gas Limited, IMC Limited also instituted proceedings before the APTEL (Appeal No. 323 of 2018) challenging the grant of authorisation by the Board in respect of GA 61. The prayers in both appeals were identical and the Tribunal heard both appeals together. 27. During the pendency of the appeal, by an order dated 11 October 2018 the APTEL directed the Board to file an affidavit explaining its decision taken on 23 July 2018 and the reasons on the basis of which bids were rejected, including on the ground of high and low quotes. In pursuance of the above order, the Board filed an affidavit by which it disclosed the Board Note dated 23 July 2018 together with a compilation of documents containing board agenda notes, minutes of meetings and press releases. On a perusal of the documents submitted by the Board, the competing standing of the various bidders is summarised below for convenience: GA No Area H1 Bidder H2 Bidder 51 Puducherry SKN Haryana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the zone of authorisation; (v) Whenever certain parts of the GAs were excluded from the zone of authorisation, the population/household number was proportionally reduced to reflect the population/households as per the reduced area. Examples of the above are Surendranagar (GA-8); and Medchal-Ranga Reddy (GA-72). (vi) In GA 72, Medchal-Ranga Reddy: (a) The original map attached to the Bid Document showed the entire district with a corresponding number of households of 13,47,118 according to the 2011 Census; (b) The Bid Document was amended to exclude the area in which an existing entity was already laying a CGD network as a result of which not only was the land area reduced but even the number of households was reduced to 4,56,557; (c) Torrent Gas Limited Private Limited, which was the highest bidder for the reduced area had bid 10,05,300 PNG connections, which worked out to 74.6 per cent of the original number of households (13,47,118) and 220 per cent of the reduced number of households (4,56,557); (d) The Board, at its meeting on 29 August 2018 rejected the H1 bidder for GA 72 on the ground that the bid of 220 per cent of the households was unreasonably high; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) of Regulation 7. (B) 2013 Amendment to the CGD Authorisation Regulations 21 June 2013: (i) The 2013 amendment amended criteria (a) and (b) and substituted bidding criteria (c) and (d) with criteria (c); (ii) The successful bidder was required to achieve a Minimum Work Programme MWP in respect of the PNG domestic connections and inch-kilometres of steel pipeline; (iii) The minimum number of PNG domestic connections to be achieved within the first five years of authorisation was to be worked out by the Board. This was based on the total number of households to be calculated as per the basic data sheet of the respective districts of the GA and the population according to the latest census data; (iv) The weightage of bidding was shifted to 70 per cent for criteria (a) and 30 per cent for criteria (b). No weightage was given to PNG domestic connections and inch-kilometres of pipeline; and (v) The successful bidder was to achieve a target of 15 per cent by the second year, 50 per cent by the third year, seventy per cent by the fourth year and 100 per cent by the fifth year. (C) 2014 Amendment to the CGD Authorisation Regulations 7 April 2014: (i) The 2014 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n adversarial challenge and not a Public Interest Litigation. The Appellants cannot try and advance their case by relying on decisions taken in relation to separate GAs which are not presently under challenge; and (vi) The calculations made by the Appellants with respect to the growth rate and projected number of households are based on irrelevant factors. 32. Mr. Gopal Subramanium, learned Senior Counsel appearing on behalf of Torrent Gas Private Limited, supported the arguments urged by the Board and further submitted that: (i) Torrent Gas Limited has attended the hearing before the Board, explained its methodology in calculating its quoted number of PNG connections, and the quoted figure has been accepted by the Board as reasonable; (ii) The Board Note dated 23 July 2018 had been formulated subsequent to the submission of bids. At the time of submitting its bid, the only criteria known to Torrent Gas Private Limited were those specified in Regulation 7 and the Bid Document, which did not prescribe a maximum number of PNG connections; and (iii) There is no condition in either the CGD Authorisation Regulations or the Bid Document which require the quoted number of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The procedure specified in Regulation PNGRB Act applies to an invitation by the Board for laying, building, operating or expanding a CDG network. Regulation 5(6) requires the fulfilment of minimum eligibility criteria. For a technical bid to pass muster, the minimum eligibility criteria require the bidder to be qualified both with reference to technical and financial parameters. This is evident from Regulation 5(6) under which the Board is to scrutinise the bids of only those entities which fulfil the minimum eligibility criteria. The minimum eligibility criteria include the technical capability of the bidding entity to (i) lay and build; and (ii) operate and maintain a CGD network. Both of them are defined with reference to qualifying criteria. Besides the technical criteria, the minimum eligibility requirements under Regulation 5(6)(e) incorporate the financial ability to execute the project and to operate and maintain it in the authorised area. The financial criteria are defined with reference to the minimum net-worth of the bidding entity. The net-worth required is dependent on the population of the GA under the 2011 Census. The minimum net-worth required is specifically defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e highest composite score in terms of the criteria specified in Sub-regulation (1) of Regulation 7 is to be declared as the successful bidder. 38. The provisions contained in the 2008 CGD Authorisation Regulations, as amended on 6 April 2018, indicate that where a specific linkage was sought with reference to the 2011 Census data, a clear and categorical provision was made to that effect. Such provisions are found in regard to the financial capability of a bidder as part of the minimum eligibility criteria in Regulation 5(6)(e) and the extent of the performance bond in Regulation 5(6)(h). 39. Absent a condition in Regulation 7 linking the 'highness' of the number of PNG connections to be achieved within eight years from the date of authorisation with the 2011 Census data, it would be contrary to basic principles of interpretation to read such a restriction into the CGD Authorisation Regulations. A conditionality which has not been incorporated in Regulation 7 cannot be introduced as a matter of construction. The court must first and foremost read the Regulation in accordance with its plain and natural meaning. There is evidently a reason why Regulation 7 did not intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability, the pipeline connectivity and the existing customers in the GA. Significantly, the scope of work in Clause 1.2 required bidding entities to lay, build, operate or expand the CDG networks to meet the requirement of natural gas in domestic, commercial and industrial segments including natural gas in the vehicular segment in the said Geographical Area to be authorised. Bidders are required under Clause 2.1.1 to examine the contents of the Bid Document including instructions, terms and conditions and regulations of the Board. The bidder was required to carefully study the GA and the charge area before submitting the bid. In other words, bidders were on notice of the actions required to be taken to implement the Regulations. The Bid Document necessarily had to be in conformity with the CGD Authorisation Regulations. The map, at best was a compendium of the latest official record of the GA. The map did not dictate how the number of domestic PNG connections was to be calculated. There is no such indication particularly in Clause 1 of the Bid Document where the map is referenced. The mere attachment of a map to the Bid Document would not result in the imposition of conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the three who had approved the Board Note concluded that, though the lower and upper thresholds were decided the same need not be a mechanical exercise ; (vi) Neither the Bid Document nor the CGD Authorisation Regulations contain any provision allowing the Board to call upon bidders to improve their bids; (vii) The Board Note dated 23 July 2018 which defined the minimum and maximum threshold (2-100 per cent of the number of households as per the 2011 Census) without any caveat or provision for relaxation has been virtually reversed on 10 August 2018, thereby upsetting the level playing field between bidders; (viii) The only reason for the reversal of the decision, which is that the criterion need not be a mechanical exercise is not supported by reasons and this volte face introduced un-canalized subjectivity in the process which was earlier considered to be objective and definite; (ix) The Board decision dated 28 August 2018 wrongly adopts the 2011 Census number as 23,33,500 whereas in the Board Note, the number of households as per the 2011 census is 21,01,931; (x) There has been a breach of the principles of natural justice for the following reasons: (a) In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent households may be treated as unreasonably quote The terminology adopted by the Board Note indicates that the 2-100 per cent range was not laid down as an absolute or inflexible basis for disqualifying bids below the minimum or in excess of the maximum. On the contrary, the use of the expression may be is one indicator that a bid which was below 2 per cent or in excess of 100 per cent may trigger the exercise of the power which the Board had reserved to itself in Clause 4.4.1 of the Bid Document. On its plain terms, the Board Note cannot be construed to have laid down an absolute norm by which bids quoting below the minimum of 2 per cent or above the ceiling of 100 per cent of the number of households under the 2011 Census data would automatically be rejected as unreasonable. 45. If the Board Note of 23 July 2018 were to be construed in the manner in which the learned Senior Counsel for the Appellants urged, the automatic disqualification of bidders based on a criterion introduced by the Board Note would raise serious doubts about its fairness and legality. This is because the Board Note was not notified to bidders as a basis for the evaluation of bids before the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and approved by Chairperson for deliberations and approval of the Board. The agenda note dated 9 August 2018 was a recommendation which was prepared on the basis of the 2-100 per cent criterion contained in the Board Note dated 23 July 2018. Obviously in the light of that decision, a recommendation was made which was still to be deliberated upon by the Board as a body. When the Board met on 10 August 2018, it correctly came to the conclusion that the lower and upper thresholds were not to be applied mechanically to disqualify bidders. This decision, as we have indicated earlier, was justified not only by the terms of the Board Note dated 23 July 2018 but was intrinsic to a fair exercise of power by the Board. The Board decided that it would call the bidders with the highest composite score to explain the reasonableness of their bids. This was a fair opportunity which was granted to the bidders who had the highest composite score to justify the basis of their computation of projected households over the eight-contract years. 47. There is no merit in the submission that there was a breach of the principles of natural justice in calling only the bidders with the highest composi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholds based on historical growth rates; (iii) The twin city status of Chennai and Kanchipuram; and (iv) The per capita income growth in Kanchipuram district. On this basis, AG P LNG justified its number for projected PNG connections. For GA-51 (Puducherry), SKN Haryana based its computation on the compound yearly growth of households in the previous twenty years. Based on this growth rate, the bidder calculated the projected households till 2026 and accordingly presented this computation to the Board when called upon. 49. In its minutes dated 29 August 2018, the Board noted that the four GAs: 51, 61, 62 and 72 were compared with the upper limit fixed by the agenda note dated 23 July 2018 and projected households in 2026. The penetration of PNG domestic connections based on the upper limit fixed by the Board with reference to the projected number of households in 2026 varied from 45 per cent to 59 per cent. However, the penetration of PNG domestic connections based on quoted PNG connections with reference to the projected number of households in 2026 varied from 55 per cent to 99 per cent. The variation between the two sets of numbers was between 7 per cent to 54 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tendering process. Both before this Court and APTEL, it was contended that the Board had rejected bids in other GAs which were not-qualified on the ground that they were either below 2 per cent or above 100 per cent of the number of households as per the 2011 Census figures. The Member Technical (Petroleum and Natural Gas) at APTEL examined the submission in paragraph 60 of the decision and held: 60. Though the appeal pertains to only GAs, 51, 61 62, the Appellant also submits that the Board rejected 37 numbers of bids which were not qualified because their bids were below 2% and higher than 100% of 2011 census figures as per the Board's Press Release dated 10.08.2018 uploaded in its website. Though, the instant appeal also strictly pertains to only highness of PNG domestic connections, still for the sake of completeness, let me understand the status of these bids. On clarification, the Board has stated that there were only 9 bids with H-1 bidders quoting below 2% and above 100% limits of 2011 census. These 9 bids were accordingly highlighted to the Board, and final decisions were taken on these 9 bids by the Board after proper application of mind, hearing the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Board to accept the justification provided by the bidders cannot be attacked on the ground that the figures provided did not strictly match the numbers extrapolated from the 2011 Census data. Lastly, the Member Technical (Petroleum and Natural Gas) observed: 51. ... Moreover, the calculations have been done by an expert body (the Board) which has been constituted as per Statutory Act. In addition, the estimates on future PNG domestic connections made by the 3 bidders based on various parameters are only estimates. These are not meant to be arrived at by any specified formula or direct mathematical precision. The power to weed out unreasonably high or low quote is only an enabling power and not a yardstick or parameter for evaluation. The power granted to the Board under Clause 14.2 of the Bid Document is an enabling Clause that allows the Board to apply its mind to a quote and determine its reasonableness. The quotes submitted by all bidders with respect to the projected number of households in 2026 are admittedly estimates. Similarly, the Board's own determination of a baseline for comparing the reasonableness of various quotes is also an estimate. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to subjective assessment/satisfaction. The assessment of a bid based on the available material would amount to objective assessment. It is evident from the above extract that the Chairperson's findings are based on three key assumptions: (i) The Board Note dated 23 July 2018 was binding on the Board and the agenda note dated 9 August 2018 was evidence of the Board Note's binding nature; (ii) Because the Board disqualified certain other bidders by applying the 2 - 100 per cent range, it was bound to do so against the successful bidders in GAs 51, 61 and 52; and (iii) Because the assessment of reasonability was a subjective assessment , the Board was obligated to hear other bidders in the disputed GAs before declaring successful bidders. 55. As noted previously, on a bare construction of the Board Note dated 23 July 2018 and the fact that the Board Note was formulated after the last date for the submission of bids, the Board Note did not set out absolute criteria for disqualification of bids. The agenda note dated 9 August merely tabled a proposal to apply the criteria of 2-100 per cent range but the Board did not subsequently adopt this course of action, a d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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