Wary contractors question GSPL pipeline plan

Vol 19, PW 19 (02 Jun 16) Midstream & Downstream

Widespread mistrust and criticism of Gujarat State Petronet (GSPL) has accompanied its decision to finally re-design and reissue a tender to lay the Mehsana to Bhatinda gas pipeline.

After stalling for months Gujarat Petronet re-issued the pipeline laying tender last week despite its ongoing court battle with the PNGRB over an embarrassing failure to complete three pipeline projects awarded to a GSPL-led consortium in 2011. But likely bidders are far from reassured and question GSPL's move to restrict competition with unusually tight financial criteria - such as demanding that companies must have reported net profits for the past two fiscals.

"The only companies I can see who meet this criterion are L&T, Kalpataru and China Petroleum Pipeline Bureau," says a source. "Punj Lloyd, Essar Projects, ILFS, KazStroy, and Corrtech do not meet this criterion." Another source says it is highly unusual for GSPL to insist on such a criterion in a "greenfield" pipeline project.

"Because of the economic downturn, even otherwise strong and technically competent companies have recorded losses in the past two years," he says. "Does GSPL want to exclude such companies?" A GSPL source says there is no attempt to restrict competition.

"Somebody will always be dissatisfied," he says. "The debate about the right criteria is never ending.

These qualifications were approved by our Board."