Gujarat pipeline tenders come after elections

Vol 16, PW 8 (01 Nov 12) Midstream & Downstream

Gujarat’s ruling BJP knows it is political suicide to hand live ammunition to the opposition Congress in the run up to December state elections.

This is why Gujarat State Petronet (GSPL) is waiting until January to invite bids to lay a 1625-km gas pipeline from Mehsana in Gujarat to Bhatinda in Punjab. An industry source alleges that Gujarat Petronet wants to limit competition in the $800m tender to large companies like KazStroy, Punj Lloyd, Fernas, L&T and Essar.

If true this will dismay small Gujarat-based contractors like Jai Hind, Jay Somnath, Corrtech, Avinash Em Projects and Advance Infra, who can wield political clout. “GSPL is delaying the tender until January to avoid making small Gujarat contractors unhappy before elections,” we hear.

On the bright side, pipeline-laying contractors can look forward to a Rs7225cr ($1.3bn) tender in January to lay a separate 2000-km pipeline from Mallavaram in Andhra Pradesh to Bhilwara in Rajasthan when consultant Engineers India will invite bids to source pipe and lay eight 225-km stretches. When completed, Mallavaram to Bhilwara will comprise a 1650-km trunk section and 350-km of spur lines and evacuate gas from GSPC’s upcoming Rs1400cr ($251m) onshore gas processing terminal at Mallavaram, likely to begin receiving gas from the offshore Deen Dayal West field by mid-2013.

Of the proposed pipeline’s 66.07m cm/d capacity, GSPL must reserve 13.2m cm/d for ‘common carrier’ use by other companies in line with government rules. PNGRB authorisation for the Mallavaram to Bhilwara pipeline came in July 2011 and GSPL must commission the project within 36 months or by July 2014.