ONGC defends oil vessel hire tender, norms aimed at increasing competition

By: |
July 02, 2021 5:36 PM

As per global norms, vessels are allowed to bid and once their day rate is selected as the lowest, they are asked to furnish seaworthy and other safety certificates. Only if those certificates are in order is the vessel hired, they said.

The tender for hiring a vessel to transport diesel along the Indian coast provides for the ship being seaworthy with valid certifications on the date of deployment after its selection in the bidding process.The tender for hiring a vessel to transport diesel along the Indian coast provides for the ship being seaworthy with valid certifications on the date of deployment after its selection in the bidding process.

State-owned Oil and Natural Gas Corporation (ONGC) has defended its tender for charter hire of an oil vessel with company sources saying safety certification norms in the tender were aimed at increasing competition.

The tender for hiring a vessel to transport diesel along the Indian coast provides for the ship being seaworthy with valid certifications on the date of deployment after its selection in the bidding process.

Some bidders saw the tender not prescribing owning of statutory certificates at the time of bidding as ‘disregard’ to safety requirement, but ONGC sources said it takes at least a few months to decide on a tender and it costs companies a lot of money to keep certificate renewal in perpetuity without site of winning a tender.

As per global norms, vessels are allowed to bid and once their day rate is selected as the lowest, they are asked to furnish seaworthy and other safety certificates. Only if those certificates are in order is the vessel hired, they said.

Sources said the tender stipulating requirement of certificates like those on classification before deployment of the vessel, and not during the bidding process is aimed at increasing competition as the availability of such vessels (like tankers) are very limited.

ONGC recently floated a tender to hire one tanker for its operations in the western offshore (Arabian Sea) to transport HFHSD (High Flash High-Speed Diesel) from Indian ports to its offshore installations.

Certain certificates like classification have defined validity as per rules of issuing authority/agency.

The certificates require to be periodically renewed by paying fees to the authorities. Verifying these certificates at the time of bid submission would require bidders to keep such certificates valid at all times, irrespective of their winning the contract.

Such provision adds to the cost of bidding and hence may restrict competition, sources said.

However, there is no risk in this as ONGC Tender provisions require such certificates/documentation for the vessel to be produced at the time of third-party inspection before deployment.

“Such Third Party Inspections are very stringent and ensure its seaworthiness, safety of the tanker/vessel and the crew,” a source said.

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