Escorts is believed to have written to HMT indicating that as it was opting out of the bidding process, the tender money needed to be returned. This was done barely a month ago, putting an end to the company's participation in the process if bids are invited again.

Escorts' bid in 1995 was the highest at Rs 131 crore followed by Larsen & Toubro at Rs 114 crore. However, there was no further action from HMT and Escorts was, instead, asked to extend the validity of its bid to the first quarter of 1997. Observers said this was a clear indication that the bidding round was still open.

L&T was then asked to increase its bid to match that of Escorts. The engineering major did not comply and withdrew from the race instead.Industry sources say that HMT was hesitant about Escorts as the company was planning to use its own R&D expertise for HMT's tractor division.

According to them, L&T's proposal seemed a more attractive proposition as its partner, John Deere, is a big name in the international tractor business. Escorts defended its move stating that it had the option of seeking technical know-how from Fendt of Germany if the need arose. Ever since, L&T has gone ahead and formalised a 50:50 joint venture with Deere for a greenfield project in Ranjangaon near Pune.

Escorts had, at that time, decided not to claim the tender money and observers believed that it was a clear indication that the company was keeping its interests alive. This would also ensure that in the event of a fresh round of bidding for HMT's tractor division, Escorts would get some kind of leeway. "At that time, we can exercise our right as a worthy contender," sources had said.

The bidding process for HMT's tractor plant began nearly four years ago andcaught the interest of big players like Mahindra & Mahindra, Eicher-Renault, L&T-John Derre and Escorts. On offer was a controlling stake in the division and a vital market share of 10 per cent in the tractor segment. At one point, TAFE (Tractors and Farm Equipment) was also a keen contender but withdrew subsequently.

The bids submitted by M&M and the Eicher-Renault combine were rejected and this apparently caused a lot of heartburn with reports that the entire process was devoid of transparency. The tug-of-war between Escorts and L&T began but both parties decided to withdraw as they were believed to be "totally exasperated" with the delay and the needless confusion caused.

Recent reports indicate that HMT is keen on inviting bids again for its tractor plant but it is unlikely that there will be any takers. Escorts, like L&T, is going full steam ahead with its new facility near Pune while Eicher is also believed to be planning a plant in Madhya Pradesh. M&M is unlikely to show any interest, either, as ithas planned a separate joint venture for a greenfield facility.