SC notices to ONGC, Punj Lloyd on Swiber's plea

The Supreme Court today issued notices to ONGC and Punj Lloyd on off-shore construction major Swiber's plea challenging the Bombay High Court order which had set aside an $125 million ONGC contract to it for laying off-shore pipelines along country's west coast.      

A bench comprising Justices V S Sirpurkar and T S Thakur directed ONGC and Punj Lloyd to file their replies within two weeks.      

While issuing notices, the bench also clarified that Singapore-based Swiber Offshore Construction could continue its work on the project, which it had already started from March.      

The Singapore based joint venture, however, would not claim any equity on the work done by it after the court verdict, the apex court said, while directing to list the matter on May 6 for next hearing.      

The apex court directions came over a petition filed by Singapore-based Swiber Offshore Construction challenging the Bombay High Court's order which had set aside the $125 million contract awarded to it by the country's largest oil producer ONGC.      

Swiber Offshore contended that its was the most suitable bidder for the project.      

ONGC had floated $125 million tender for laying a 116.5 km-sub-sea pipeline off the western coast of India and was awarded to the Singapore based firm.

It is a part of $1.3 billion project taken up by ONGC. However, the decision was challenged by other bidders including Punj Lloyd in the high court. They contended that while awarding the tender, ONGC had ignored some benefits offered by them on price preference.      

On April 6, 2010, the high court had set aside ONGC's decision to award the contract to a consortium led by Swiber Offshore along with Sime Darby of Malaysia.      

Major infra companies like L&T, Punj Lloyd and Leighton had also participated in the bidding.      

Calling it "totally unacceptable and arbitrary," the High Court had observed that the PSU had declined the price preference to Punj Lloyd merely on grounds of non-submission of a statutory auditor's certificate in the bid documents.      

Swiber was the lowest bidder at $124.86 million, while Punj Lloyd had mentioned $131.32 million.      

As per the terms and conditions of the bid, Indian firms were to submit auditor's certificate along with their price bids in a specific folder in order to take advantage of price preference.      

Domestic firms were to given 10 per cent price advantage over foreign firms, provided they execute more than 50 per cent of the project themselves.       Punj Lloyd had, however, submitted it in a separate folder, which resulted in its disqualification from availing price preference over the Swiber consortium.