Oil and Gas Development Company Limited (OGDCL) on Thursday received three bids for multi million dollar Kunnar Pasakhi Deep (KPD) project following a controversial formula, which gives discretionary power to OGDCL management to award contract to the costlier bidder.
Sources revealed that OGDCL received bids for Dakni and Jhal Magasi fields on December 9, 2010. In these two fields, OGDCL is following the formula to award contract to lowest bidder. "But OGDCL has adopted an inexplicable formula: to award the contract for a KPD project based on 30 percent marks for price bid and 70 percent for technical proposal," sources said.
Kunner Pasakhi field will produce 250 million mmcfd and 286 metric tons LPG. A powerful group operating in the energy sector was reportedly eyeing the KPD field and therefore the bid formula has been manipulated to award the contract to a favoured party, sources confided.
According to the revised formula, if a party offers the lowest price for a project, it may be rejected and the highest bidder may win the bid if it secures higher marks in the technical proposal. "This unique formula will not only open the floodgates of kickbacks but also legitimise awarding contract to a favoured party," sources feared.
OGDCL received bids from three parties-Patrosin, PDIL backed by Hyundai and Malaysia-based Company KNN. The revised rules will enable many powerful players and political figures in the country to get involved in awarding contracts. Sources revealed that the decision had already been made to award the contract to a favoured party that submitted a bid on Thursday.
Senate's Standing Committee on Petroleum and Natural Resources on Tuesday expressed concern over the revised bid formula fearing that it may lead to litigation. One party has already challenged the revised formula in Islamabad High Court. Senate body observed that a powerful group in LPG sector was behind a move to corner the LPG extraction market. The committee has directed OGDCL management to submit details of revised criteria which include 30 percent marks for price bid and 70 percent marks for technical proposal.
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