ONGC's dilemma over 4-well platform at Mumbai High

Vol 7, PW 5 (21 May 03) News in Brief
     

ONGC faces a peculiar problem over its 4-well platform project for the $1bn Mumbai High South revamp.

It must choose between Engineers India, which has offered to execute the contract for some $200m, and an unsolicited offer from Larsen & Toubro to do the same job for $147m if ONGC agrees to change its completion deadline by eight months to December 2004. ONGC estimates this project should cost $138m.

In an earlier global tender for the same job, L&T was the lowest bidder but ONGC scrapped the tender and decided to give the contract to EIL after L&T refused ONGC's Letter of Intent because it came in late. Now with EIL's price significantly above its own estimate and L&T's original bid, ONGC is faced with a dilemma.

Should it give the contract to EIL at a higher price, or accept L&T's unsolicited offer

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