SC to decide on ONGC's $125 mn pipeline bid row in July

The Supreme Court would start its final hearing on the $125 million ONGC contract for laying offshore pipelines along the country's west coast in the first week of July.

A consortium led by Swiber Offshore company has moved the apex court against a high court order that set aside the contract awarded by ONGC to it on grounds that oil and gas major acted in an arbitrary manner.

A vacation bench of justices BS Chauhan and Swatanter Kumar said as the matter was important, prayer filed by Singapore-based offshore construction major Swiber Offshore company and Punj Llyod would be heard after the court resumes its work in the first week of July.

"Keeping in view the urgency in the matter, we consider it appropriate to direct the listing of these matters for final disposal in the first week of July 2011. Till the next date, the interim order as passed by the High Court shall continue," the bench said.

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

The apex court was hearing a petition filed by the Swiber Offshore challenging the high court's order. The court has already clarified that Swiber Offshore Construction could continue its work on the project that it 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 court had said.

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

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.

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

While setting aside the tender, the high court had said that the manner of awarding the contract was "totally unacceptable and arbitrary" and 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 made a bid at $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.

They were to be given 10% price advantage over foreign firms, provided they executed more than 50% of the project themselves.