Suspicion falls on Chinese companies over HURL

Vol 20, PW 4 (03 Nov 16) People & Policy

China-India relations are at an all-time low - China is openly defending Pakistan against Indian accusations of terrorism and in June China blocked India's entry to the Nuclear Supplier's Group.

All this bodes ill for two Chinese state-owned EPC contractors keen to bid in a major Indian government project to revive three urea factories that will use R-LNG feedstock from Adani Energy's proposed 5m t/y Dhamra LNG terminal in Orissa. State-owned project management consultant Projects & Development India (PDIL) and the fertiliser ministry are expected to disqualify ChengDa Engineering and China Wuhuan Engineering from among eight companies that filed prequalification documents on September 15 for an estimated $1.2bn contract.

"PDIL is going through the offers carefully to find strong reasons to disqualify both companies," claims an industry source. "But if Sino-India ties improve they might be qualified." Some say it is short-sighted for PDIL and the fertiliser ministry to mix business with politics.

"China's economic downturn is forcing Chinese companies to look for business overseas," we hear. "Expect them to bid aggressively.

By disqualifying them PDIL will be denied attractive bids. Chinese companies are known for their strong project execution capability." Hindustan Urvarak & Rasayan (HURL) - a joint venture between power major NTPC and Coal India - is driving the fertiliser factory upgrade.

IndianOil is expected to join at a later date.