Chaucer Capital, the London-based India focussed fund who had expressed intent to develop the Alewadi port in 2007 has just filed a case against the Maharashtra Government the week before voters go to the polls in the State Elections. Chaucer Capital says the case illustrates how key infrastructure development has been held up under the Congress administration in Maharashtra. Chaucer Capitalisstill waitingto receive a Letter of Intent from the Maharashtra Maritime Board to sanction its project while the State Government has breached the arrangement and its own policy by secretly awarding the project to another firm.
The award of the contract is a clear breach by the Maharashtra Government. It represents unfavourable conditions for investment, and unfair practices thereby dampening investor sentiments and confidence for international investors. It also undermines the efforts and expenditure in terms of time and investmentsmade by Chaucer Capital to complete its commitment to develop the Alewadi port.
Chaucer Capital was among the first of few other applicants who had expressed their willingness to develop the port in a public and fair process in January 2007. After a rigorous selection process, Chaucer Capital eventually was left as the sole qualified developer as other parties all dropped out.However, after having Chaucer Capital undergo additional scrutiny and innumerable follow-ups with Maharashtra Government, the London based companyis still unable to receive the LOI.
Over the years, the company approached various senior authorities including the Maharashtra Minister of Ports, the Chief Minister of Maharashtra and Senior Congress politicians in Delhi. Despite the Chief Minister’s agreement to consider the matter and sanction the project, Chaucer Capital was once again left in the lurch with inaction from the Maharashtra Government. The Maharashtra Government failed to issue the Letter of Intent, despite Chaucer Capital having complied with all requisite conditions of financial backing, technical know-how and experience to develop the Alewadi port project.
Chaucer Capital has continuously displayed its clear interest to develop the port. In a recent turn of events, the company discovered that the Maharashtra Government had privately opened discussions with another Indian company who had never previously been involved in the properly established public process. It has now emerged that the Maharashtra Government has awarded a contract to develop the port to that party under the guise of developing a jetty. The development of this alleged jetty has been sanctioned on exactly the same site as the Chaucer Capital port.
Negotiations for this new proposed development had clearly been conducted by the Maharashtra Government on a private and secret basis. This constitutes a clear breach of the promulgated government policy.To rectify this injustice Chaucer Capital has now filed a case under the Bilateral Investment Treaty between India and the UK and is in the process of filing a writ against the Maharashtra Government in the Bombay High Court.