Expect low rates in ONGC helicopter tender

Vol 19, PW 24 (11 Aug 16) Exploration & Production

Cut-throat competition and rock-bottom rates are expected in ONGC's tender to replace or re-hire 10 helicopters for five years.

By the extended July 21 bid deadline ONGC received offers from Global Vectra, Pawan Hans, Deccan Charters and Heligo Charters. Surprisingly United Helicharters did not bid despite depressed market conditions.

Not as surprising as it seems! A source explains United probably doesn't want to lock in its machines at "such low rates" for a five-year contract. "Pricing is too cut-throat now," he says.

"It doesn't make sense to get locked into a long-term contract. How do we know if oil prices will stay this low in five years?" Of the 13-seater helicopters which ONGC wants to replace, seven are currently on hire from its own subsidiary Pawan Hans while three are on hire from Global Vectra.

In the fresh tender ONGC specifically wants five helicopters from one contractor, three from another and two from a third. "ONGC wants to spread its risk," we hear.

"And that's good!" Three of the four contractors that bid will most probably get contracts. But there's a sting in the tail: the lowest bidder will get LoAs first and the others must match this rate.

ONGC wants to use the helicopters in both western and eastern offshore regions.

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