GAIL to re-tender bids for pipeline project

New Delhi: GAIL (India), following a steep fall in steel prices, has decided to re-tender the bids for supply of pipes for its Vijaipur-Dadri-Bawana (VDBPL) pipeline project.

A senior company official said that “we are calling for tenders again.” The company’s tender for supply of 1,00,000 tonnes of pipes for VDBPL had received response from eight companies including four foreign companies Europipes (Germany), Marubeni (Japan), PCK (China) and Izhora Pipe Mill (Russia).

When asked if the dip in steel prices would affect the company’s projects, Mr U.D. Choubey, Chairman and Managing Director of GAIL, said, “We are expecting that because of lowering of steel prices the value of pipeline will also come down.”

The tender was floated on August 14 and last date for submission of bids was September 18 with a validity of three months. The dip in steel prices may cost the company about Rs 250 crore.

The pipes are to be laid from GAIL’s dispatch terminal at Vijaipur, Madhya Pradesh, to receipt terminal at Dadri, Uttar Pradesh, and further to Bawana, Haryana. Engineers India Ltd was appointed as consultant for the bidding process and the project. The estimated cost of Vijaipur-Dadri-Bawana pipeline project is Rs 5,492 crore.

On the impact of current economic slowdown on GAIL’s projects, Mr Choubey is quick to point out that it “is not likely to affect the projects as GAIL has a surplus of Rs 14,000 crore and it generates a surplus of Rs 4,000 crore every year.”

“We do not need loans up to 2009,” he added.

Speaking about the future prospects of the company, Mr Choubey said, “We need to move aggressively across the value chain. So the company is opting for subsidiary model of business.”

“We are thinking of having subsidiaries, which will cover different areas like pipeline transmission, gas distribution, polymer production, city-gas distribution and foreign acquisitions,” he said.