MUMBAI, Nov 5: The stalling of Indian Navy's Rs 1500 crore Project Seabird is likely to be the main agenda for the Parliamentary Consultative Committee meeting in New Delhi tomorrow.

Even though the committee comprising 20 Lok Sabha MPs, eight Rajya Sabha MPs and the three service chiefs is chaired by the Defence Minister, Mulayam Singh Yadav will have to do some heavy-duty explaining for his sudden decision to stop the tender procedure in August after financial bids from four consortiums were opened.

Yadav's intervention in the project is thought to have been triggered off by a backdated letter written by South Korean engineering company Hyundai after it was eliminated from the tendering process.

In a letter written to the Defence Minister on August 8, 1997 Hyundai's General Manager Hae Joo Lee claimed that Asian firms always charged 40 per cent lesser than their Western counterparts, and hence could save the government Rs 100 crore on the project.

Subsequently, the Defence Minister abruptly called a halt to the second round of tender negotiations.

Project Seabird in Karwar is a Rs 1500 crore naval base to be built to decongest the Mumbai naval base and is expected to be operational in the next decade.

In addition to the Defence Minister, Lee wrote a similar letter dated August 11 to the then project director, Seabird, Rear Admiral S V Gopalachari.

However, there is a glaring discrepancy in the serial numbers of the two letters. The August 11 letter to Gopalachari is numbered HNDL 9712 while the letter to the Defence Minister written ostensibly three days ago is numbered HNDL 9714.

In effect, this means that Hyundai unduly tried to influence the Defence Minister after they failed to get any response from the project director.

Hyundai, who had been knocked out in the first round itself of the tendering process were now trying to squeeze back into the reckoning by saying that if given the project, they could save Rs 100 crore for the MoD.

This claim was immediately refuted by Gopalachari in a letter to the Defence Minister: ``On the day of writing this letter, ie August 8, 1997, Hyundai had not known any other tenderer's price bids. How could they make a one-sided assumption and claim that the Indian nation and MoD will save more than Rs 100 crore?'' Gopalachari asked.

He also claimed that by writing these two letters Hyundai had violated clause 26.2 of Tender Vol I which states that efforts by a tenderer to influence the employer, consultant in the evaluation and award of contract may result in the rejection of such tenderers' bid.

On August 12, bids from four short-listed consortiums were opened and the Hochtief-Ballast Nedam-L&T consortium was found to be the cheapest at Rs 600 crore -- lower than their nearest competitor the Jan de Nul-Afcons consortium -- by nearly Rs 100 crore.

``Do you think it's possible to influence such highly educated people (the Seabird management committee) through a letter?'' retorts Hae Joo Lee, General Manager of Hyundai Engineering and Construction. When questioned about the back-dating of the letter and the inconsistent serial numbers Lee said: ``We issue many letters in a day, it's not possible for me to remember all of them.''

After making such strenuous efforts to get back into the bidding, Lee claimed he had no idea that the tendering process had been stopped by the Defence Minister. ``We never asked them to stop the evaluation of tenders,'' he said. When asked how Hyundai knew that they would be at least 40 per cent or Rs 100 crore cheaper than their European rivals, Lee stated that this was based only on rough projections. A spokesperson for Mulayam Singh however passed the buck right back to Hyundai. ``The Defence Minister has not tampered with the letter. If there is any mistake in it, that is Hyundai's problem,'' the spokesperson said. ``All the Defence Minister did was to simply forward Hyundai's letter to Project Seabird to ascertain their claim that the nation could actually save Rs 100 crore on the project. If Hyundai has indulged in any wrong-doing, the Defence Minister has declared it would be blacklisted,'' the spokesperson However, he could not convincingly say why Yadav had abruptly halted the entire tender procedure.

Senior Defence officials are miffed that while the Defence Minister immediately acted on Hyundai's letter by sending a note to the Seabird management and freezing further negotiations, he hasn't bothered to respond to at least three reminders sent to him by the Director General Seabird, urging him to lift the restriction on the board to prevent time and cost overruns. Others associated with Project Seabird fear that as the tenders submitted on June 10 are valid only for six months until 10 December 1997 Hyundai might try and bid again in the fresh round of tendering. This was negated by the minister's spokesperson who assured that a decision on the vital project would be taken before December 10.

Seabird which was conceived in the early 80s as a Rs 300 crore project to shift the Indian navy's western fleet from its overcrowded base in Mumbai to Karwar, is already over a decade behind time. The foundation stone for the project was laid down by then Prime Minister Rajiv Gandhi in 1986 and shelved thereafter for want of finance. In 1995 it was revived with reduced scope and budget.

Conservative estimates made by Seabird management showed that the marine works could be completed at a cost Rs 559.63 crores if the construction time was limited to 60 months. But even a month's delay beyond that may result in a cost overrun of approximately Rs 2.14 crore.