The Board of Directors (BoD) of Oil and Gas Development Company (OGDC) may scrap the tender of $186 million engineering, procurement and construction (EPC) contract for Uch-II development project in its meeting scheduled for Wednesday. The National Assembly Standing Committee on Petroleum and Natural Resources has recommended scrapping the deal due to infighting between powerful groups which has resulted in delays in developing oil and gas fields.
The development of Uch-11, Kunner Pasakhi Deep (KPD)-Tando Allah Yar (TAY) integrated project and Sanjaro field have all been delayed due to these powerful groups. According to sources, Sui Northern Gas Pipeline (SNGPL) has offered to assist OGDC in executing Uch-11 development project. OGDC has opened the financial bids on Uch-11 development project.
OGDC BoD will consider four options to execute Uch-11 development project. First option is to go to be proposed to the Board is for OGDC to execute Uch-11 project after scrapping the tender by engaging public sector entities. OGDC may procure the equipment and Enar may be tasked to provide-engineering services with SNGPL engaged for construction work.
The second option is to support the lowest bidder, Petrosin, with the $186 million bid, but the award of the contract has been delayed due to controversies over the submission of amended bid bond. Frontier Works Organisation (FWO) has also served OGDC a legal notice for not opening its financial proposal. OGDC has responded to the legal notice served by FWO, maintaining that as it had not qualified for the technical bid therefore its financial bid was not opened. Public Procurement Regulatory Authority (PPRA) has found no deviation of PPRA rules 2004 in submission of 'amended bid bond' by Petrosin to OGDC for the $186 million contract. However, in a recent letter, China Lianoning International Economic and Technical Co-operation Group Corporation (CLIC) representative in Pakistan office informed OGDC that it has revoked the agreements with Petrosin Engineering for Uch-11 and Kunnar Pasakhi Deep Development Projects (KPD)--a revocation that has given birth to yet another controversy.
As for the third option, BoD may be requested to approve the initiation of a new tender process. However, in case of re-tendering there is a distinct possibility that those groups which have already taken part would again participate, raising the prospect of a new controversy.
The fourth proposal is to seek approval of the board to disqualify the company which failed to get its documents verified before the committee. "Negotiations can start with the second lowest bidder," sources said, adding that final decision, however, would rest with the BoD. The outgoing Managing Director of OGDC, Naeem Malik, has formed a three-member committee to verify the documents submitted by different bidders.
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