ISLAMABAD : 9June 30, 2022) .. The Oil and Gas Development Company Limited (OGDCL) is likely to award an over $ 85 million UCH gas compressors project to a selected vendor through a non-competitive bidding process. The public sector oil and gas company’s act of awarding this multi million project to a selected vender is likely to cause loss of billions of rupee to the national exchequer.
Reliable sources told NEWSMAN requesting anonymity that a multinational vendor has conveyed its serious reservations to OGDCL over award of the contract for over $ 85 million for UCH compression project without conducting a fair competition for the key project. Only two contenders participated in the bidding process. Their offered financial bids clearly showed that the tender for UCH gas compression project was prepared to benefit some particular manufacturer. Although there are two bidders which are run for award of the project, but the manufacture of both contenders seems the same. It demonstrates clearly that OGDCL made specifications for this project which suit to a particular manufacturer.
A recently retired senior official in connivance with his colleagues played a role in paving way for securing the multi – million dollar project of UCH compressors for the manufacturer of his choice. The bidding process in this case is shady as the supplier of both intending bidders is the same. It raises serious question over transparency in process being followed to award the contract.
The aggrieved multinational company raised a number of serious questions over procedure followed by OGDCL for award of the key project of compression at UCH gas field. The OGDCL procurement procedure is under questions for years. The company is following a shady procedure for procurement that costs the national exchequer billions of Rupee per year. The UCH case is its glaring example. The OGDCL awarded the contract for UCH compression project to one of two bidders. The competition for a $ over 80 million for UCH gas compression project highlights many glaring questions. For example, why OGDCL is relying on a competition among a few parties.
OGDCL has only two bidders for this project —consortium of M/s Hong Kong HaulHua Global Technology Limited and AJ Technology and Joint Venture of M/s Presson Descon International (Pvt) Limited and Sui Northern Gas Pipeline (SNGPL). In recent times, the competition for OGDCL projects has shrunk to only two bidders. The OGDCL management, instead having a fair competition for its multi million dollar projects, is banking on only unhealthy competition.
This policy of having competition between only two contenders for a big state owned company like OGDCL is hurting interest of the country. The unhealthy competition makes it easy for OGDCL management to pick a bidder of its choice to award the contract and watch its own interest rather than the country. Major loss of a unfair competition goes to the country as hand- picked bidders offer remains higher up to 30 % and in some cases even more to cost billions of rupee extra to the national kitty. The same unhealthy practices have been raised by the multi- national vender in his complaint submitted to OGDCL against award of multi million dollar compression project of UCH gas field. The aggrieved vendor has clearly noted in its complaint that had OGDCL followed a transparent procedure it would have cost 20 % to 30 % less to OGDCL for its UCH compression project.
The aggrieved vendor in its complaint said “We would like to draw your attention on the subject tender inquiry for UCH compression project . The tender is designed by OGDCL to be used as fueled gas for this project which has relatively has low calorific value and to operate on this gas (430 to 490 BTU majority of international renowned OEMs will have be included a fuel treatment module prior to fuel gas entering the gas turbine—- . As this will not allow only fair competition for multinational companies which are in business of manufacturing of gas turbine driven compressors to compete on equal grounds but most importantly ill save multi millions of dollar in terms project budget to save previous foreign exchange of Pakistan”.
The aggrieved vendor also highlighted ill-intention of OGDCL procuring authorities to make tailor-made specification to favour a hand- picked vendor by questioning the specifications criteria made a part of the tender. It said “ Contemporary majority of gas turbine modules (in the required range ) have DLE and can not operate on such a low calorific value fuel gas I. e (430 to 480 BTU) without fuel treatment module , so putting this specific requirement in qualification criteria will lead to coverage towards single OEM based solution , as other OEMs would not qualify”
Making a tailor made specifications and favouring one vendor is a serious devoid of the government policy aimed at transparent procurement which involves huge foreign exchange is a serious issue. The National Accountability Bureau (NAB) and other watchdog agencies should check who in OGDCL is compromising the national interest to make individual’s luck through the promotion of culture of tailor-made tenders for procurement.
The award of UCH gas compressions project against allegedly exorbitant cost is a serious question. The new government of Shahbaz Sharif should look into this case and make sure that no one within or outside OGDCL compromise the national interest for any OGDCL project.
