GTCL move for buying pricey compressors may cause $100m loss
Tuesday, 24 March 2009
The government is likely to incur a loss of about US$100 million in installation of two gas compressors, as the state-owned Gas Transmission Company Limited (GTCL) is advancing with two tender proposals at much higher prices than the current international price, reports UNB.
The GTCL, with funds from the Asian Development Bank (ADB), had planned to install the two compressors at its Muchai and Ashuganj points to enhance the gas pressure in the national gas grid.
The initial plan was to install four compressors, but the GTCL finally moved with two of them because of fund constraints.
Industry insiders found the GTCL move for the two compressors as very irrational and also drainage of the foreign exchange when the organisation itself has been suffering from serious fund constraints.
Because, the proposals of the two international companies were submitted at a time when the steel prices on the international market were at their peak in recent times.
"But, now the prices have come down to a half," said an expert in the energy sector suggesting that the government should go for re-tender to receive a much lower price.
Official sources said the GTCL's estimated cost was only US$ 55 million for the two gas compressors. But it received a price offer of about US$ 262 million from ABB of Italy and another of about US$ 147 million from Hyundai Engineering of Korea.
Industry insiders also said that even if the government moves with the project and implements it hurriedly it would not be very effective to enhance the gas pressure in the gas grid.
"Because, until gas production is enhanced to a reasonable level, compressors will not work properly," said one expert.
The GTCL, with funds from the Asian Development Bank (ADB), had planned to install the two compressors at its Muchai and Ashuganj points to enhance the gas pressure in the national gas grid.
The initial plan was to install four compressors, but the GTCL finally moved with two of them because of fund constraints.
Industry insiders found the GTCL move for the two compressors as very irrational and also drainage of the foreign exchange when the organisation itself has been suffering from serious fund constraints.
Because, the proposals of the two international companies were submitted at a time when the steel prices on the international market were at their peak in recent times.
"But, now the prices have come down to a half," said an expert in the energy sector suggesting that the government should go for re-tender to receive a much lower price.
Official sources said the GTCL's estimated cost was only US$ 55 million for the two gas compressors. But it received a price offer of about US$ 262 million from ABB of Italy and another of about US$ 147 million from Hyundai Engineering of Korea.
Industry insiders also said that even if the government moves with the project and implements it hurriedly it would not be very effective to enhance the gas pressure in the gas grid.
"Because, until gas production is enhanced to a reasonable level, compressors will not work properly," said one expert.