Fabtech set to win Oil India tank contract

Vol 19, PW 7 (03 Dec 15) Midstream & Downstream

Fabtech Projects & Engineers has surprised industry watchers by bidding lowest in Oil India’s long-delayed tender to set up a secondary tank farm and other facilities at Madhuban near Duliajan in Assam.

Pune-based Fabtech is expected to win the LoA from Oil India shortly. An Oil India source says it is getting internal approvals to issue the LoA to the "lowest bidder.

" Price bids were opened on November 20, months after they were received by the extended July 16 deadline. Fabtech bid lowest quoting Rs432cr ($65m) followed by BGR Energy at Rs439cr ($66m), Vijay Tanks & Vessels with McNally Bharat Engineering at Rs531cr ($79m) and Offshore Infrastructures at Rs550cr ($82m).

Equally surprising was the disqualification on technical grounds of favourite Kalpataru Power Transmission, which designed and set up the original Madhuban central gas gathering station. Also disqualified was IOTL, which many thought was a strong contender - setting up tanks is its core business.

Nobody was surprised that Tata Projects was disqualified, given its obvious conflict of interest with Tata Consulting Engineers - Oil India’s Project Management Consultant for this job. When confirmed Fabtech will be tasked to set up six floating roof tanks that can handle handle 40,000 kilolitres of oil; separators; bath heaters; compressors; a gas-based boiler; a gas-based power station; and dehydration and effluent treatment facilities, all within 24 months.