Dharti set to win Dabhol dredging contract

Vol 14, PW 23 (19 May 11) Midstream & Downstream

Hyderabad-based Dharti Dredging & Infrastructure is the only bidder left in the race for the Dabhol shipping channel dredging contract from Ratnagiri Gas and Power.

PETROWATCH learns on May 18 Dharti met executive directors from Ratnagiri Gas promoter GAIL and consultant Engineers India to negotiate the value of the dredging contract. Negotiations are necessary, we learn, because EIL originally estimated the contract value at Rs160cr ($35m) but Dharti bid $40m.

“Dharti’s bid was 12% higher than the Ratnagiri Gas internal estimate,” says a Ratnagiri Gas source. “Normally no more than a 10% variation is expected between the internal estimate and the bidder’s quote.

” Still unclear is whether Ratnagiri and Dharti reached agreement but Dharti is certain to win the dredging assignment. Belgium’s Dredging International was the only other bidder in the race but wanted several “commercial deviations” from the original tender and also wanted Ratnagiri to follow guidelines set by the UK-based Federation of Dredging Contractors.

“Those terms provided more protection to the bidder than the promoter so Ratnagiri Gas couldn’t accept them,” we hear. Ratnagiri Gas cannot understand why Dredging International made such a fuss when Holland’s Van Oord had no problem carrying out dredging work in 2007 at Dabhol under GAIL’s ‘general conditions of contract’.

Ratnagiri wants the selected contractor to dredge 5m cubic metres of silt and loose rock to deepen the Dabhol shipping channel to 14.5 metres depth. If Dharti signs the contract, it will have a month to mobilise equipment to location.

But dredging is expected to begin only after the monsoon ends and the sea calms down around mid-September. It will take five months to completely dredge the Dabhol shipping channel and the Dabhol LNG terminal is expected to receive its first LNG cargo by March 2012.