The Swiss challenge method is back in focus after edible oils player Adani Wilmar emerged as the highest bidder for bankruptcy-hit firm Ruchi Soya under this unique bidding method.

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Adani Wilmar, a joint venture with Adani Enterprises and Wilmar International, trumped Ramdev-backed Patanjali Ayurved by offering to pay Rs 4,350 crore and Rs 1,700 crore fund infusion to Ruchi Soya.

However, Patanjali Ayurved will be given a chance to outbid Adani Wilmar's offer under the Swiss challenge method.

What is Swiss challenge method?

The entire process now puts focus on the Swiss challenge method adopted for the procurement process of Ruch Soya.

The method is a unique bidding process in which the private firms and individuals could submit a development proposal for an institution to the government authority or agency even without the invitation by the authority.

The authority in turn, can then publish the proposal so that all can view it. This, in turn, will allow the third persons to give further suggestions that will improve the original proposal.

In case of the emergence of counter proposals, the proponents of the initial procedure will have the option to rectify and improve their proposal.

But if they fail to do so, the authorities will have the right to award the contract for the best bidder.

The method in India

According to a report in LiveMint, many Indian states have been employing this method for various infrastructure projects. It adds that the Supreme Court has approved the method way back in 2009.

Back in 2015, the cabinet also approved the employing of the method for redeveloping 400 railway stations across the country.

Merits and Demerits

While the method is credited for being innovative and successful in tackling the red tape culture that thwarts several government projects, there is also been criticisms levelled against it. There is also a fear that the process, if not backed by strict legal frameworks, will aid firms that commit fraud to win projects.

First Published:Jun 13, 2018 3:00 PM IST