NTPC draws mocking laughter at gas pre-bid meet

Vol 7, PW 5 (21 May 03) People & Policy

DISASTROUS IS the only way to describe NTPC's pre-bid meeting in Delhi on 15th and 16th May for its 3m t/y northern region gas demand.

A source tells this report CRISIL began the meeting with a presentation on NTPC's gas demand. NTPC had set aside two hours for the presentation and questions that might follow but had to end the session in 30 minutes in the absence of any questions from the full house.

"Everybody just kept their mouths shut." At the tea break that followed, perturbed NTPC officials went around trying to find out why. When the meeting reconvened, NTPC read out some written questions it had received from bidders during the 10-day period after the RFP documents were issued on 22nd April.

"There were three kinds of questions: one, how could NTPC include such preposterous conditions in its draft contract Was it serious Two, could NTPC not try doing things another, more sensible way And three, did it occur to them that the draft contract contradicts itself in several places" To the first two kinds of questions, NTPC's answer was blunt: its bid documents would prevail. To the third kind of question, NTPC conceded that there were some contradictions and promised to correct them in the amended draft.

But the bidders were unsatisfied and followed up with a volley of verbal questions and comments. NTPC's answers drew mocking laughter from the audience.

For instance, the condition that the successful bidder should give a $20m bond to NTPC guaranteeing completion of the regassification facilities. "One bidder wanted to know if NTPC would give a similar guarantee to companies investing a huge amount in such facilities.

NTPC replied that the draft contract did not include any such term. The bidder said he was aware of this and so the question.

This provoked laughter." NTPC was clearly told that its draft contract was "neither a commercial nor bankable" document. "They were told that it is a completely one-sided contract loaded against the supplier."