GAIL asks MAN to lower pipe quote

Vol 12, PW 24 (07 May 09) News in Brief

GAIL wants MAN Industries to bring down its quote for steel pipes for three of four sections of the 618-km long Dahej to Vijaipur parallel pipeline project, to match those of Jindal Saw - the lowest bidder in the first section.

Jindal quoted $783/tonne for a total 168,890 tonnes of steel for the first category of pipes but MAN was lowest bidder with $1030/tonne for 155,478 tonnes of steel for the other three categories of pipes. Following this wide difference, GAIL faced rising clamour from politicians and bidders who lost for the project to be re-tendered as steel prices have fallen 25% between January when bids were submitted and March when prices were opened.

On May 4, GAIL directors decided that MAN be asked to match Jindal Saw’s price for the three categories in which it is lowest bidder. But if MAN declines, GAIL will issue a fresh tender for those three categories of pipe.

It was also decided to issue a Letter of Intent (LoI) to Jindal Saw for the first category of pipes.