IOC scraps Haldia diesel hydrotreater tender

Vol 20, PW 22 (27 Jul 17) Midstream & Downstream

Mystery surrounds IndianOil's decision to scrap its tender to set up a 1.2m t/y diesel hydrotreater facility at Haldia with some speculating it might be a ploy to exclude China's Hualu Engineering & Technology.

IOC needs the estimated Rs400cr ($62m) hydrotreater to remove sulphur from diesel at its 7.5m t/y Haldia refinery in West Bengal. Bidders Larsen & Toubro, Technip and Hualu were unpleasantly surprised on July 17 to receive an automated email from IOC's tender portal, referring to the tender number and announcing that "the tender has been cancelled.

You may kindly visit the portal for further details if any." A senior source at project consultant Engineers India confirms the cancellation. "I'm not obliged to tell you why," he says.

Without any clarity from IOC or Engineers India, rumours are spreading. Some say IOC wants to keep Hualu out because of a tense standoff between India and China on the Himalayan border which kicked off last month (June) when a Chinese army construction party began building a mountain road, much to India's dismay.

"It looks like IOC did not want Hualu in the race," says a source. However, this could not be independently confirmed.

Others say the problem is that Hualu has no local subsidiary or affiliate which has led to concerns the project might be delayed while it sets one up.