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Foul Play in Bidder Selection

Sylhet Gas scraps third tender, goes for another

Sharier Khan
Smelling foul play in the bidder selection process, the Board of Sylhet Gas Field Company Ltd (SGFL) has cancelled the third tender for installation of a highly technical Tk 157 crore gas processing plant and asked the authorities to float a fourth tender within this week, competent sources said.
The board also asked the SGFL authorities to set a stringent criterion to ensure offers from only competent bidders — an issue that was deliberately bypassed either by the tendering authorities or the higher authority so that a bidder represented by a certain business lobby wins the contract.
"But the SGFL authorities are still trying to keep a loophole in the bidding criterion so that once again one or more incompetent bidders may get qualified,” said a Petrobangla source.
Under this project, the SGFL would produce 16 barrels of natural gas liquid (NGL) and about nine barrels of associated condensate using 45
million cubic feet per day (mmefd) gas.
The NGL will then be used in an existing fractionation plant to manufacture liquefied petroleum gas (LPG), motor spirit and diesel. LPG is widely used in the country for cooking and domestic purposes.
The SGFL has been floating tender for Kailastila Molecular Sieve Tlirbo Expander (MSTE) Processing Plant since April 2005.
The board at a meeting on January 28 cancelled the third tender, and asked the SGFL to set a criterion that the bidder must have at least five years' experience in supply, design, engineering aspects, procurement and commissioning of the particular type of at least one natural gas MSTE plant having a minimum capacity of 45 mmefd, or Natural Gas Molecular Sieve Dehydration Plant through an international competitive bidding (ICB) outside the bidder's home country
This should eliminate the entry of less competent bidders for this high tech job, sources said. "But earlier this week, ignoring the board's directive, the SGFL once again made the bidding criterion in such a way so that an incompetent party can be accommodated in the tender," said a source. The criterion says that the bidder would be qualified for the project if it has implemented such a project through an ICB — both inside or outside the bidder's home country,” said a Petrobangla official.
The first tender for this fractionation plant project was floated in May 2005 but it fell flat. The project was retendered in January 2006 and drew offers from Sinopec, Thermo Designs and Astra-Evangelista. The project consultant had disqualified both Astra-Evangelista and Sinopec as non-responsive and recommended Thermo Designs of Canada.
The project consultant had identified 50 major deviations in Sinopec's offer and categorically said this company technically does not qualify for such a complex project. But oddly enough, the SGFL awarded the project contract to Sinopec, represented by Sahco International, at a cost of Tk 113 crore in December 2007. But the deal ultimately fell flat as the company demanded an increase of project cost and a host of other legal benefits.
The third tender for the project was floated on September 21 last year with an estimated cost of Tk 157 crore, and it drew five bids from China Tianchen Engineering Corp and Hainan Hairan HiTech Energy Co of China, Hyundai Engineering Co of Korea, PT Istana Karang Laut of Indonesia and Kudoz Consulting of the Netherlands.
At that time, as per the board's directive, the SGFL had included a criterion, among many others, that the bidder must have five years’ experience in installing and operating a MHTE plant.
The SGFL qualified three bidders — Hyundai, Hainan and Istana. Of them, Hainan did not fulfil the five years' experience criterion, as the company was created in January2004,anditfell 17 days short of the required experience on the bid closing day of December 14 last. Istana provided a provisional certificate instead of an experience certificate while Hyundai provided a handover certificate instead of an experience certificate.
While seeking the board's approval of the bid, the SGFL said Hainan had considerable experience in constructing gas process plants, the bidder’s work experience may be accepted if the experience requirement is relaxed. It added that both Istana and Hyundai also had their shortcomings and therefore the experience criterion may be relaxed.
But the board felt that Istana's provisional certificate or Hyundai's experience certif-
icate are both valid documents to prove their experience. On the other hand, Hainan's experience did not cover the five-year criterion.
Both Istana and Hyundai remain valid bidders without relaxing the criterion.
The chairman of the board then blasted the SGFL chief for seeking a change of the criterion and observed that such kind of questionable handling has caused repeated tendering for the same project. T\vo years have been wasted and the SGFL incurred tremendous financial loss.
A board member said, “The MSTE is a very high tech project and we need offers from good companies who have required experience outside their home countries so that they cannot provide forge documents."
After the meeting, the SGFL went back to the drawing board, but once again framed a criterion so that a certain Chinese company represented by a local business lobby can qualify in the bid. A strict criterion like a company winning a project through an international tender bid outside its home country would eliminate that Chinese company which only has experience in its home country