GAIL India Ltd has asked Man Industries, which was the lowest bidder for sections of state-run firm's Dahej-Vijaipur pipeline project, to further lower the bid price, drawing sharp criticism for ignoring best practices.
Man in a press statement said GAIL late yesterday evening sent a fax seeking revised lower bid by 1100 hrs on June 10.
The Mumbai-based firm was the lowest bidder for two of the three sections of the Dahej-Vijaipur pipeline project but GAIL chose to invite "revised, lower bids" in a limited tender.
"GAIL has taken the most unethical step by advising Man Industries to offer revised lower rates, despite the fact that the tender has no stipulation for seeking any discounts from evaluated qualified L1 (lowest) bidder," the statement said.
Stating that the GAIL fax was received at 2343 hrs yesterday, Man said it was "shocked and surprised" at the "hush-hush" manner in which the state-run firm wanted to wrap up the "tender process ignoring all ethical and best practices thus raising major questions."
Man said as per CVC guidelines there was no provision to seek lower bids through a limited tender after evaluating offers received through an international competitive bid (ICB). "Man strongly protests and detests this GAIL step."
Man vehemently opposed GAIL move to seek lower price bids, saying "the entire international community is closely watching what is going on (in GAIL) from March 24 (when bids were originally opened) and they have lost confidence in GAIL."
Man was the lowest bidder at $907 per ton in two out of the three sections in which Dahej-Vijaipur pipeline project was divided. But since its bid was higher than $680 per ton price for steel quoted by Jindal SAW for one section there had been talks if its two sections can be rebid to lower cost.
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Man had last week stated that it was not correct to say that steel prices in the international markets have fallen by more than 50 per cent since January 2009. "The downward trend in prices was seen in October-December 2008 and anticipated fall until March was factored in the price quoted by Man."
Steel prices stabilised in the quarter ended March 31 and have started firming up thereafter, it said adding its bid cannot be compared with Jindal as raw material had to be procured from overseas.
Also, Jindal was the second-lowest bidder in the sections where Man was lowest bidder.
"In their wisdom GAIL was aware of the price trend at the time of opening of price bid in March 2009 hence they decided to go forward for price opening and finalisation of contract thus foreclosing all option of retendering/re-bid.
Hence any thought of retendering at this stage in view of rising price trend is ill-timed and not guided by true facts," Man said.