Expect new Barekuri tender from Oil India

Vol 19, PW 10 (28 Jan 16) Exploration & Production

Oil India is expected to re-issue a tender to set up an Oil Collecting Station and associated facilities at Barekuri near Tinsukia in Assam, because of the gaping chasm between its own estimate and the price quoted by lowest bidder Tata Projects.

Oil India returned Tata’s bid bond on January 19 – a sign the original tender has been scrapped. Logically Tata should have received a LoA as it bid lowest on September 17, 2015, quoting Rs247cr ($41m) against Kalpataru Power Transmission, far behind at Rs480cr ($80m).

Scrapping the tender was the best option for Oil India as its own estimate was just Rs180cr ($27m). Others feel Oil India’s estimate based on inputs from its Coimbatore-based Project Management Consultant Kavin Engineering was too low.

"During the pre-bid we pointed out major flaws in the project engineering," says a source at a company that did not bid. "With those kinds of flaws, it made no sense for us to bid.

We were sure Oil India's estimate would be far below cost." Another source says the actual project cost for the original tender is around Rs400cr ($59m).

"Oil India agreed (during the pre-bid) that the engineering was poor," he says. "Tata Projects should consider itself lucky the tender has been scrapped, or else it would have made major losses.