Whispering campaign against Shell refinery contracts

Vol 12, PW 22 (09 Apr 09) People & Policy

Shell is the latest company in India to fall victim to the government’s â€کarbitrary’ policy on whether to award public sector contracts on a one-to-one basis or strictly through global tender.

Under scrutiny are two contracts awarded to Shell Global Solutions by an oil ministry technical advisory body, the Centre for High Technology, on behalf of state-owned refiners Indian Oil, Hindustan and Bharat Petroleum. Anonymous oil ministry sources told the Times of India newspaper on April 2 that two contracts for a high-end technology upgrade of eight refineries across India violated government bidding norms and are likely to be â€کreviewed’ because they were offered to Shell on a plate, not through global tender.

“The story is speculative in that it seems to be a leak from someone in government,â€‌ responds Shell by e-mail. “We have not heard anything officially in this context from government so cannot comment.

â€‌ Shell won’t be alone in feeling aggrieved if it faces a humiliating â€کreview’ – other companies also complain about government inconsistency in offering public sector contracts: should they be through global tender exclusively; or can they be negotiated one-to-one Rarely will you get a clear answer. “There is complete confusion on this,â€‌ complains one source.

“The whole system is arbitrary. It’s odd that they awarded the contract to Shell and now they are saying it was awarded wrongly.

Did the government not know what it was doing then; or doesn’t it know what it is doing now One of the two must be true!â€‌ Shell’s frustration is compounded by the high-powered composition of the Centre for High Technology: more than 40 people from state oil companies and headed by none other than the oil secretary himself. One possible reason for the â€کreview’ speculation is an attempt to discredit former oil secretary and undisputed Shell â€کgroupie’ MS Srinivasan, who headed the Centre for High Technology when the contracts were signed in 2006 and 2008.