Anger over strict Hiranandani PMC conditions

Vol 18, PW 4 (09 Oct 14) Midstream & Downstream

Despite some extremely unattractive contract terms, four companies are expected to bid by the October 31 deadline in Hiranandani Group’s tender to hire a Project Management Consultant for its proposed 8m t/y Jaigarh LNG terminal.

An industry source tells us Tractebel, Foster Wheeler, Bechtel and Technip are the likely contenders for this estimated $20m contract. Earlier favourite WorleyParsons is surprisingly staying away.

Blame this on the proposed contract terms. “Not just Worley but others too will find Hiranandani’s terms unacceptable,” says a source.

Among the “unacceptable” terms is an ‘exclusivity’ clause barring the winner from working on a similar assignment within a 2-km radius of Jaigarh. Any delay in work also invites “extremely heavy liquidated damages.

” Worse, these damages are fixed in US dollars. Another sore point is that the PMC cannot demobilise its workers until the entire Jaigarh project is completed, even if its own assignment is finished.

There are even penalties if any of the consultant’s key officials quit without approval from Hiranandani, with the penalty set according to the person’s designation. “Such terms are unheard of anywhere,” adds a source.

Another challenge facing bidders is the tight schedule: the PMC must begin work within two months of signing the contract with no certainty that all the required data will be available in time.