MARUBENI COMPLAINS ABOUT UNFAIR TENDER PROCESS

Vol 3, PW 12 (07 Jul 99) Midstream & Downstream
     

It is a frequent complaint among foreign companies that the Indian tender process is unfair and riddled with corruption.

Of late many companies testify that the situation has improved. But has it The following story, widely reported in the Indian press, will do little to inspire confidence.

It centres on a complaint made by the New Delhi office of the Japanese trading house Marubeni against Engineers India Ltd (EIL), a state-owned engineering company, and Petronet-India, the government holding company set up to oversee the construction of product pipelines across India. Marubeni accuses EIL and Petronet-India of tampering with bid envelopes and of rejecting its bid despite the fact that it quoted a price 10% lower than the declared winner, whose identity remains unclear.

The allegations relate to the construction of a 425-km product pipeline for Bharat Petroleum between Cochi in Kerala to Karur in Tamil Nadu, passing through Coimbatore, also in Tamil Nadu. In an open letter to the oil ministry, Marubeni alleges that the envelopes containing its final revised price bid had been opened by someone at either EIL or Petronet-CCK, a subsidiary of Petronet-India.

"On scrutiny these envelopes containing the final revised price looked different from the first two price bids as the sealing tape and the mode of sealing were different", reads the letter. Damage limitation is now the oil ministrys top priority as it tries to put the lid on the allegations.

Vazhappady Ramamurthy and Santosh Gangwar have both ordered an internal inquiry into the affair. Until the result is known, the future of the pipeline to Karur remains in limbo.