Bankrupt PSL forces IndianOil pipeline re-tender

Vol 16, PW 23 (13 Jun 13) Midstream & Downstream
     

Bankrupt pipe manufacturer PSL has forced IndianOil to re-tender pipe supplies for a planned capacity addition to its 1870-km oil pipeline from Salaya in Gujarat to Mathura in Uttar Pradesh.

"PSL has delayed our project,” IOC director (pipelines) VS Okhde tells PETROWATCH on the sidelines of a press conference in Delhi on May 30. “We did not expect a company like PSL to go bankrupt.

Our project was suffering. We had no choice but to re-tender.

We will open price bids soon and award the contract this month (June).” IOC needs pipe equivalent to 335-km or 45,046 tonnes of steel for the Salaya to Mathura pipeline.

Six companies bid by April 15: Man Industries, Welspun Pipes, Jindal Steel, Essar, Top Worth and Ratnamani. “IOC wants the selected pipe manufacturer to begin deliveries within four months of award,” we learn.

IOC hired PSL in April 2012 to deliver pipe equivalent to 800-km but till date has only received pipe equivalent to 285-km. "PSL has been facing a cash crunch since late last year forcing it to delay pipe deliveries," we hear.

Rivals expect more companies to re-tender for projects awarded to PSL. "Tenders for at least 15,000-tonnes of steel pipe should come out in the next few months," adds a source.

"PSL hasn't won a tender for over six months. Jobs they won earlier are being given to others.

" IOC isn't paying PSL directly for the pipe supplies received, but instead paying banks owed money by the beleaguered pipe manufacturer.

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