HYDERABAD: A recent state government order permitting the joint venture building 22 Sewage Treatment Plants (STPs) under Hyderabad's AMRUT 2.0 project (Package-II) to alter its shareholding structure, allegedly after being awarded the contract, has come under scrutiny.
The Citizens Council has formally objected to this decision, arguing that such post-award modifications undermine transparency and fairness in public procurement.
The council said the April 29, 2026, Government Order, which permits modifications in the SPV formed by BVSR-SSG-RCIPL (JV), is legally untenable. They argue it violates Article 14 of the Constitution. It also breaches both tender integrity and contractual lock-in requirements.
The project in question requires the construction of 22 STPs with a total capacity of 471.50 MLD under the Hybrid Annuity Mode (HAM) for urban local bodies between the Greater Hyderabad Municipal Corporation (GHMC) and the Outer Ring Road (ORR), including operation and maintenance for 15 years.
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In a detailed representation to the Managing Director of the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) and the Chairperson of the State Level High Powered Steering Committee (SHPSC), The Citizens Council, represented by General Secretary Shailk Aarif Mohammed, outlined seven legal challenges.
Shailk Aarif Mohammed said allowing post-award changes in the JV structure lets the successful bidder alter bid conditions after the process ends. "Other bidders did not get the same opportunity to bid with a revised structure. This creates an arbitrary advantage," added Shailk Aarif Mohammed. Such restructuring undermines competitive neutrality. It also renders the original evaluation process ineffective. He further added that competing bidders face disadvantages, as they may have bid differently if such flexibility had been disclosed.
The Concession Agreement reportedly requires the Lead Member to retain at least 51% equity until two years after the Commercial Operation Date (COD). "Any dilution constitutes a material breach. A Government Order cannot override this contractual obligation," the council asserts. Both contracting parties must sign any amendment in writing. "A GO is a unilateral administrative action. It cannot replace a mutually executed agreement," said Shailk Aarif Mohammed in his representation.
The legal and administrative implications are far-reaching. Officials awarded the tender based on the technical qualifications of the JV members. Diluting the technical partner's share undermines eligibility. Execution by an altered entity is equivalent to awarding the contract to an unqualified party. The JV needs prior consent before making any changes. If the Government Order followed internal decisions, it is post-facto approval, which contract law does not validate. Administrative powers cannot override contracts. The council maintains that such actions are legally unsustainable.
To remedy the situation, the Citizens Council has put forward a series of demands. The Citizens Council has requested that authorities immediately suspend all project payments pending legal review, declare the JV shareholding modification void, clarify how the Government Order overrides binding tender and contractual provisions, strictly enforce Article 7.1 or initiate termination under Concessionaire Default provisions, and conduct an independent inquiry into the approval process.
The Council urges a swift government response. "This issue directly affects transparency, fairness, and integrity in public procurement and requires urgent intervention," said Shailk Aarif Mohammed.
The AMRUT 2.0 STP project is a flagship initiative. It aims to transform sewage treatment and water recycling in the Hyderabad metropolitan region. Package-II covers several urban local bodies between GHMC and the ORR. The project includes substantial financial investment.