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Tk 157cr Gas Plant

SGFL board scraps 3rd re-tender process

Sharier Khan
Sylhet Gas Field Ltd (SGFL) board headed by the Petrobangla chairman-in-charge has cancelled the third re-tender process for purchase of a Tk 157 crore gas processing plant citing "unavoidable circumstances".
The SGFL itself is left baffled as nothing officially explains the “unavoidable circumstances".
Sources however said it is a bidding criterion modified in March that prevented some inexperienced Chinese companies from participating in the bid.
Earlier last week, Gas Transmission Company Ltd (GTCL) board headed by the same person had cancelled a $150 million bid for installing three gas compressors in the country's major gas transmission line to improve its flow, pressure and quantity.
A powerful ruling party man unofficially representing some interested Chinese companies played a key role in cancelling the SGFL retender process on Monday using influence on some high officials concerned. The same person is simultaneously pushing Power Development Board (PDB) to favour certain Chinese companies
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in various power project deals.
The SGFL plant would produce daily 16 barrels of natural gas liquid (NGL) and about nine barrels of associated condensate using 45 million cubic feet per day (mmefd) gas.
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 other domestic purposes.
The SGFL has been floating tender for Kailastila Molecular Sieve Turbo Expander (MSTE) Processing Plant since April 2005. But die tender was repeatedly cancelled under undue influence of various lobbies that failed to bag the deal or to have favourable terms.
Earlier in February, the SGFL board- -then headed by another Petrobangla chairman- had cancelled the third tender for installation the highly technical gas processing plant. The board had asked the SGFL authorities to set a stringent criterion to ensure that the contract goes only to genuine competent
bidder.
Under this criterion, the bidder must have minimum five years' experience in supply, design, engineering aspects, procurement and commissioning of this 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 the SGFL refrained from modifying its tender criterion accordingly. Then in March, the GTCL bowed down to energy ministry's strong reminder to incorporate the change.
After this a couple of Chinese companies, which were trying hard to bag the deal in the past, automatically dropped out of the race.
In the second re-tender in September 21 last year, Chinese companies like China Tianchen Engineering Corp and Hanian Hairan Hi-Tech Energy Co participated alongside better
experienced Hyundai Engineering of Korea, PT Istana of Indonesia and Kudoz Consulting of the Netherlands.
But the third re-tender floated on February 19 attracted a different set of bidders. Eight bidders including Chinese Shengli Engineering & Consulting Co, Shanghai Engineering, Korea Hyundai and Daewoo and Indonesian PT Istana purchased bid documents.
The SGFL held the pre-bid meeting on March 30, and tender dropping date was set on April 27. But this time limit was extended by one month under pressure from the vested interest lobby.
On May 11, following a board meeting chaired by the Petrobangla chairman-in-charge, the SGFL notified that the bidding process has been cancelled due to unavoidable circumstances.
“These actions are certainly not in the interest of the nation. The country’s gas system is suffering tremendously due to past inactions and corruption. We are seeing a repetition of the bad practices of the past gov-
ernment," said an official.
The first tender for this fractionation plant was floated in May 2005 but it fell flat The re-tender for it in January 2006 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. Oddly enough, the SGFL awarded the project contract involving Tk 113 crore to Sinopec, represented by Sahco International, in December 2007.
But the deal ultimately fell flat as the company demanded an increase of project cost and a hostofotherlegal benefits.
Smelling foul play in the bidder selection process, the SGFL board cancelled the third tender in which some incompetent companies were being entertained.