GTCL seeks energy ministry's directive to award contracts
M Azizur Rahman | Friday, 6 March 2009
State-owned Gas Transmission Company Ltd (GTCL) has sought the energy ministry's directive to award contracts for installation of gas compressors and gas transmission pipelines across the country, officials said Thursday.
The company's board in a meeting Wednesday bestowed the responsibility to the energy ministry to decide the fate of these projects instead of taking any decision itself as it found that the project costs would be much higher than the approved allocation.
"We have referred it to the energy ministry, headed by Prime Minister Sheikh Hasina, for a ruling over the issue," a senior GTCL official told the FE Thursday.
He said the company is now in a dilemma over awarding the contract for installing three gas compressors at separate key locations and three inter-regional gas transmission pipelines to the qualified lowest bidder as the quotations received far exceeded the actual allocations.
The Asian Development Bank (ADB), which pledged to finance both the projects, has expressed its inability to provide additional funds for setting up these transmission pipelines and compressors, company officials said.
GTCL, the country's lone company for transmitting natural gas, had floated bids for setting up gas compressors at Muchai, Ashuganj and Elenga to ensure uninterrupted gas flow with sufficient pressure during mid 2008.
It also floated bids to install Monohardi-Elenga 30 inch 51 kilometer (km), Jamuna West-Nalka-Bheramara 30 inch 85 km, and Bheramara to Khulna 20 inch 162 km natural gas transmission lines during the mid 2008 under the funding assistance from the ADB.
The lowest cost quoted by the South Korean Daewoo for setting up gas compressor was US$149 million, which is almost three times the estimated cost of $55 million.
The second lowest bidder, an Italian firm ABB quoted $259 million, almost five times the project cost.
Four companies took part in the bidding for setting up gas compressors but only Daewoo and the ABB emerged responsive after the technical offers were evaluated.
The financial offers of both the bidders were opened recently.
For installing gas transmission pipelines the offer of the lowest bidder was more than double the allocated funding.
The South Korean company Daewoo became the lowest bidder for installing American Petroleum Institute (API) standard pipes in the Jamuna West-Nalka-Bheramara 30 inch 85 km transmission line.
The Daewoo quoted $46.22 million for setting up this gas transmission pipeline though the approved cost for this particular project was $23 million, a GTCL official said as an instance.
A senior energy ministry official said installation of the gas compressors and setting up gas transmission pipelines are necessary to ensure smooth supply of gas across the country.
Due to transmission constraints, gas being produced in the northeastern region cannot be transmitted to other parts of the country. Low gas pressure, caused from the absence of compressors, is impeding industrial production and electricity generation.
Despite commitment the authorities concerned are failing to provide gas to industries that have invested heavily in their units, sources said.
The company's board in a meeting Wednesday bestowed the responsibility to the energy ministry to decide the fate of these projects instead of taking any decision itself as it found that the project costs would be much higher than the approved allocation.
"We have referred it to the energy ministry, headed by Prime Minister Sheikh Hasina, for a ruling over the issue," a senior GTCL official told the FE Thursday.
He said the company is now in a dilemma over awarding the contract for installing three gas compressors at separate key locations and three inter-regional gas transmission pipelines to the qualified lowest bidder as the quotations received far exceeded the actual allocations.
The Asian Development Bank (ADB), which pledged to finance both the projects, has expressed its inability to provide additional funds for setting up these transmission pipelines and compressors, company officials said.
GTCL, the country's lone company for transmitting natural gas, had floated bids for setting up gas compressors at Muchai, Ashuganj and Elenga to ensure uninterrupted gas flow with sufficient pressure during mid 2008.
It also floated bids to install Monohardi-Elenga 30 inch 51 kilometer (km), Jamuna West-Nalka-Bheramara 30 inch 85 km, and Bheramara to Khulna 20 inch 162 km natural gas transmission lines during the mid 2008 under the funding assistance from the ADB.
The lowest cost quoted by the South Korean Daewoo for setting up gas compressor was US$149 million, which is almost three times the estimated cost of $55 million.
The second lowest bidder, an Italian firm ABB quoted $259 million, almost five times the project cost.
Four companies took part in the bidding for setting up gas compressors but only Daewoo and the ABB emerged responsive after the technical offers were evaluated.
The financial offers of both the bidders were opened recently.
For installing gas transmission pipelines the offer of the lowest bidder was more than double the allocated funding.
The South Korean company Daewoo became the lowest bidder for installing American Petroleum Institute (API) standard pipes in the Jamuna West-Nalka-Bheramara 30 inch 85 km transmission line.
The Daewoo quoted $46.22 million for setting up this gas transmission pipeline though the approved cost for this particular project was $23 million, a GTCL official said as an instance.
A senior energy ministry official said installation of the gas compressors and setting up gas transmission pipelines are necessary to ensure smooth supply of gas across the country.
Due to transmission constraints, gas being produced in the northeastern region cannot be transmitted to other parts of the country. Low gas pressure, caused from the absence of compressors, is impeding industrial production and electricity generation.
Despite commitment the authorities concerned are failing to provide gas to industries that have invested heavily in their units, sources said.