L&T bosses unhappy with low Neelam bid

Vol 20, PW 13 (23 Mar 17) News in Brief

Larsen & Toubro senior management is said to be unhappy with subordinates over the low price quoted to win ONGC's Neelam redevelopment contract.

On March 20, L&T announced it had won the $245m contract which includes setting up one process platform, three wellhead platforms, 32-km of pipeline, and modifications to eight old platforms. On March 7 when ONGC opened price bids L&T bid lowest quoting $244.84m followed by SapuraKencana with AFCONS at a distant $306.45m and NPCC at $307m.

Sources close to L&T say its bosses want to know why there was such a wide difference between its quote and that of Sapura. "Bosses felt (L&T) managers misjudged the market," we hear, "Especially as the difference between Sapura and NPCC was just $550,000 indicating they made a realistic assessment." L&T managers, we are told, organised a detailed presentation and justified the low bid based on quotes from vendors and subcontractors and the results of the original Neelam tender when price bids were opened in March 2016 and Swiber bid lowest at $218.80m.