L&T accused of HRP-II double standards

Vol 16, PW 9 (15 Nov 12) Exploration & Production

L&T will be disappointed if there is truth to rumours that ONGC might scrap and re-issue its Heera Redevelopment (HRP-II) three-well platform tender.

ONGC’s ‘Independent External Monitors’ (IEMs) and the government’s additional solicitor general Gaurav Banerji are believed to have found fault with lowest bidder Leighton Welspun’s price bid. ONGC opened price bids on July 9 but second ranked L&T complained that Leighton’s $141.79m bid was invalid as it indicated zero service tax.

L&T’s own bid was close behind with $141.93m. L&T further alleged Leighton’s partnership with Gulf Piping was conditional on securing the contract.

Yet more than 90 days later and the project has still not been awarded. ONGC has the option to re-evaluate prices to account for rupee-dollar exchange fluctuations.

If this is done, L&T will become the lowest bidder but ONGC, we hear, is reluctant to award the contract to L&T. “ONGC feels L&T is guilty of double standards and being a bully by complaining to the IEMs,” says an industry source.

“L&T has conveniently forgotten it won the Vasai East Development Project in 2006 by quoting zero service tax and with a similar ‘conditional’ consortium with Samsung.” ONGC, he adds, has awarded several contracts with such terms to bidders over the years.

“If ONGC accepts the views of the IEMs it could raise embarrassing questions about past winning bids,” we hear. “All of ONGC’s tender committee members could be in serious trouble.

” Contacted last week, ONGC declined to reveal details. “All I can say is the project has not been awarded,” said a source.

“It is being considered by management. I cannot tell you anything else.