Gail Mulls Action Against Saw Pipes

The Gas Authority of India Ltd (GAIL) is learnt to be contemplating action against SAW Pipes for repeated failure of its linepipes supplied for various pipeline projects. Linepipes being supplied by SAW Pipes are said to be failing by the dozen during hydro testing. The repeated leakages and bursting of these linepipes have not only delayed the implementation of the projects but have also led to imposition of liquidity damages on SAW Pipes.

Three linepipes supplied by SAW for the HBJ (Hazira-Bijapur-Jagdishpur) upgradation project are understood to have recently failed the mandatory hydro test. Besides, the delay by SAW in supplying the coated pipes to the project has delayed it by at least six months with the resultant loss to economy.

 

GAIL, which owns the HBJ pipeline, has already imposed liquidity damages to the extent of Rs 25 crore on SAW Pipes. The horizontal drilling contractor, which has been on stand-by for more than a month now, is also expected to demand compensation from SAW Pipes.

SAW Pipes failed to respond to a Business Standard request for comments on these developments.

SAW Pipes was on the holiday list of GAIL because of the supply of defective linepipes for the Bombay city gas supply project, when it was awarded the contract for the supply of 500 km linepipe for the HBJ project. It was also alleged that SAW did not have the experience in the manufacture of the required grade linepipes for the HBJ upgradation project.

However, SAW Pipes gave an undertaking to GAIL that it would replace all the defective linepipes supplied for the Bombay project in case it was given the contract for the HBJ upgradation project. Although it ultimately did replace the defective linepipes, it is learnt that some of the new linepipes are also failing the hydro tests.

Earlier, SAW Pipes had come in for severe criticism for three bursts on the Gadepan-Borari pipeline during hydro testing. It was feared at that time that the fertiliser plants coming up on the pipeline would be delayed because of the bursts.

The linepipe supplied by SAW Pipes for the pipeline supplying gas to the Maruti factory in Gurgaon had also developed a leak in Delhi a few years ago, creating panic in New Delhi.