10 bidders refuse to match $417.50 per ton price: TCP issues fresh tender for 0.25 million tons of urea import

All bidders regretted to accept the offer of the Trading Corporation of Pakistan's (TCP) to match the lowest bid of $417 per ton in urea import tender, forcing the Corporation to issue fresh tender for procurement of 250,000 tons of the commodity.
Sources told Business Recorder on Wednesday that TCP's international Gallop Tender, issued on December 28, 2011, for import of 300,000 tons was opened on January 9, 2012 and some 14 bidders participated in it. Out of 14 bids, 11 bids were found responsive in terms of prescribed evaluation criteria with prices ranging from $417.50 per ton to $460.00 per ton (C&F).
The lowest bid ($417.50 per ton) was submitted by Transfert FZCO, Dubai, for supply of 50,000 tons and, after evaluation of the bids, the TCP awarded import contract for 50,000 tons (10 percent plus/minus)of urea to the lowest bidder. To complete the procurement of total 300,000 tons urea, the TCP asked other ten bidders to match the lowest bid price, by Tuesday evening. However, all the ten bidders refused to match the price as they believed that $417.50 per ton urea price was much lower than the international market.
Interestingly, when the bid of Transfert FZCO, Dubai was opened, Tariq D Khan Manager Incharge Imports TCP announce that bid of Transfert FZCO is $471.50 per ton for supply of 50,000 tons (10 percent plus minus) of urea. However, at the time the bid bond was not submitted by the bidder, sources said. At the same time, Tariq D Khan also asked the other bidders regarding acceptance of this bid, as the bid bond was on the way. The remaining bidders, considering $471.50 as highest bid, agreed to accept the bid. Later, when bid bond of Transfert FZCO arrived, another official of TCP corrected to all the other bidders that bid of Transfert FZCO was $417. 50 per ton, and not $471.50 per ton.
"Manager Insharge Imports has mistakenly read $471.50 per ton bid of M/s Transfert and the actual price was $417.50 per ton mentioned in the bid paper", said an official of TCP when approached for comments on the issue. However, he claimed that a bank guarantee worth $0.6 million was enclose with bid of Transfert .
According to source, this may be another reason due to which remaining ten bidders regretted to match the lowest bidder's price and, till the Tuesday evening, not a single bidder had agreed to supply urea at $417.50 per ton. Meanwhile, the regret of other bidders has forced the TCP to issue fresh tender for procurement of 250,000 tons of urea. With TCP's fresh International Gallop Tender Notice for import of Urea to be opened on January 19, 2012, bids have been invited from prequalified foreign suppliers (exporters) registered with TCP for supply of 'Urea' (in bulk) through world wide sources on C&F basis.
As per new tender terms and conditions, urea is to be supplied strictly in accordance with the standards and specifications prescribed by Pakistan Standards & Quality Control Authority (PSQCA) and Import Policy Order in force. In addition, bids for less than 50,000 tons (minimum quantity) will not be accepted, and total quantity of urea must reach the designated port in Pakistan in accordance with the shipment schedule given in the Tender Document. TCP has also asked interested pre-qualified suppliers of urea, who can supply urea from world-wide origins, may submit their bids in sealed envelopes by January 19, 2011.
As per tender terms and conditions, shipments of imported urea of this tender would start within one week after opening of letter of credit. It may be mentioned here that TCP is engaged to import 1.2 million tons of urea for Rabi season and so far contracts for the import of 0.95 million tons have been finalised. This may be last tender, after which target of 1.2 million import of urea will be completed.