Indian firm alleges discrimination in SA | india | Hindustan Times
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Indian firm alleges discrimination in SA

An Indian firm has accused the SA Govt of discrimination after it was twice overlooked as a qualifying bidder.

india Updated: Apr 05, 2006 12:05 IST

An Indian firm has accused the South African government of discrimination after it was twice overlooked as the qualifying bidder in the privatisation of a massive state forestry project.

"We consider the unilateral termination of the sale process as being highly discriminatory," Vineet Rohatgi, general manager of Kolkata-based Paharpur Cooling Towers, told the daily Business Report.

Paharpur and its local partner in the bid, Londoloza Forestry Consortium, appealed against the decision in the high court here and were successful in getting any conditional approval of a deal on the Komatiland Forests declared illegal.

"Is there some kind of aversion to Indian investment?" Rohatgi asked. Where is the commitment to South-South Investments that Brazil, South Africa and India have been bandying about for many years?"

Rohatgi said the South African government had twice unfairly terminated the proposed privatisation of the forests, with Paharpur having had the best chance on both occasions as the reserve bidder.

In 2002, Paharpur came in line when the successful bidder, Zama Resources, was disqualified because of allegations that it had secured the influence of key public enterprises ministry officials. But instead of awarding the tender to Paharpur, the government scrapped the tender and restarted the process.

The bid process was scrapped for a second time when the preferred bidder, US-based Bonheur, withdrew last month after evidence emerged that the firm and Komatiland Forests could face the wrath of South Africa's competition tribunal.

Again, instead of turning to Paharpur as the reserve bidder, the state decided to scrap the tender process.

"Why is it the government (and its forestry parastatal) Safcol went out of its way to persist with Americans for more than two years when it knew the transaction with Bonheur faced extraordinary competition issuers from the outset?" Rohatgi queried.

The official said that the court order had vindicated its representations to the government since October 2004, adding that it was now apparent the key decision makers in the government may not have been receiving the right advice.

Rohatgi remained optimistic about Public Enterprises Minister Alec Erwin reconsidering the recommendation by Safcol to terminate the tender process.

"We remain ready to conclude the Komatiland privatisation within three to four months," Rohatgi said.

Safcol Chief Eexecutive Kobus Breed said he was "disappointed" with the court judgment, as Safcol believed that it had acted within its rights.

Paharpur has reportedly already spent several million rands on its bids for the Komatiland Forests over the past five years.