ONGC moves SC against stay on Rs 1,219-cr sub-sea oil pipeline project

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Published: December 21, 2018 1:26:23 AM

The apex court listed the case for hearing on January 2 and asked the Bombay HC to decide on ONGC’s review petition which was dismissed in view of an appeal pending before the top court.

ONGC moves SC against stay on Rs 1,219-cr sub-sea oil pipeline project

The Supreme Court will hear in January the ONGC’s appeal against the Bombay High Court’s order that in effect stayed its Rs 1,219-crore sub-sea oil pipeline construction project for the Mumbai High, Milan Heera and basement field.

A bench led by justice L Nageswara Rao, while directing that the case be listed for hearing on January 2, had directed the HC to decide the ONGC’s review petition after solicitor general Tushar Mehta had informed it that the HC was not taking up the matter in view of its appeal pending before the top court.

Meanwhile, the HC had dismissed the ONGC’s review petition on Monday (December 17).

ONGC has moved the apex court seeking vacation of the status quo order as continued by the HC without assigning any reasons. While UAE-based offshore construction company Valentine Maritime had appealed against the dismissal of its petition by the Bombay HC on October 5, it had in an interim order got a status quo order from the top court.

The PSU said that the work is on for last six months and any delay can have a cascading effect, delaying the installation of pipelines by more than five months, thereby causing production losses. Such deferred production would require equivalent quantities of import, which would cause prejudice to the public exchequer, Mehta added.

Valentine, which claimed to be the lowest bidder, had moved the HC challenging the alleged illegal and arbitrary action of ONGC in awarding the contract of laying sub-sea oil pipeline and other associated works to Malaysian company Sapura Fabrication SDN BHD at the cost of $1,744,842,758.

ONGC in its appeal stated that the terms of the invitation of the tender are not open to judicial scrutiny. It said that it had adopted the prudent principle of commerce in evaluating the bids and any change in conditions were uniformly applied to all the four qualified bidders and no mala fide intention was attributed to it in doing so. Besides, the court does not need to go into interpretation of the tender conditions at this stage of the proceedings, particularly when there is already a concluded contract in favour of the Malayasian company.

According to ONGC, Valentine having participated in the tender process cannot claim that the tender conditions are unevenly applied.

ONGC had in June 2017 invited tender for the work of laying 29 numbers segment of sub-sea pipelines, laying of 11 numbers of umbilical and the topside modification of 31 platforms for the Mumbai High, Milan Heera and basement field in 2 phases.

According to the Abu Dhabi firm, after the change in tax regime, the last date of bid submission was altered and ONGC had also changed bid evaluation methodology after tenders were floated and reduced the scope of work and also consequentially asked the bidders to proportionately reduce their offers, without any authority.

The original contract value and schedule was on the basis of 594 days which was reduced to 491 days, said Valentine, which has a consortium with 80:20% of foreign and Indian holdings respectively. However, Valentine’s revised bid wasn’t considered. As compared to lumpsum price of $205.66 million quoted by it, the evaluated quoted price by the Malayasian company was found to be $211.83 million, it said.

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