GAIL cancels $37m Fabtech contract

Vol 17, PW 11 (16 Jan 14) News in Brief

GAIL plans to scrap three pipeline laying contracts worth Rs230cr ($37m) awarded to a consortium of Fabtech Projects & Engineers and Zen Gas.

The three contracts are for a 340-km stretch of a 948-km R-LNG evacuation pipeline from Kochi in Kerala to Bangalore in Karnataka. Fabtech is claiming around Rs100cr ($16m) for sitting idle as GAIL could not secure Right of User (RoU) permission for the pipeline stretch from Coimbatore in Tamil Nadu to Bangalore in Karnataka.

“We are still facing resistance in Tamil Nadu and Karnataka from farmers," says GAIL. "So we plan to cancel the three tenders for those states.

” But what about the remaining stretch “In Kerala we hope to get state government support for RoU clearances.” Punj Lloyd has two of the remaining sections, Corrtech International has one and Tecpro Systems and partner AMKV have two.

Calls to Fabtech by this report went unanswered.