Government Limits Role Of Eil In Seven Petro Projects

Public sector Engineers India Ltd (EIL) has suffered a major blow with the government deciding to award turnkey contracts for setting up diesel hydro desulphurisation units in seven refineries.

Conventionally, EIL used to provide detailed engineering, procurement and supervisory services for desulphurisation units. However, according to the latest notification, EILs role will be limited to front-end engineering.

For the seven refineries Haldia, Mathura, Vadodara and Panipat refineries of Indian Oil Corporation (IOC), Vizag and Mumbai refineries of Hindustan Petroleum Corporation Ltd (HPCL), and the Cochin refinery of Cochin Refineries Ltd it has been decided that the contractors scope of work will involve residual process engineering, detailed engineering, procurement, supply fabrication, transportation, construction, installation, mechanical testing, pre-commissioning, commissioning, performance guarantee and total project management.

 

The decision to award the turnkey contract implies that the government is not convinced of EILs capabilities of delivering the goods. The Planning Commission too has raised doubts about EILs capabilities in this regard.

Recently, petroleum secretary V L Kelkar was invited to witness a presentation by EIL about its capabilities to undertake these projects.

The decision to implement the projects on a turnkey basis implies that the petroleum secretary could not be convinced of EILs qualifications.

The lead to award a project on turnkey basis is understood to have been taken by IOC. Encouraged by the corporations success, other public sector oil companies also started pressing the government for a similar decision in their favour.

EIL, however, has been retained by these oil companies as their consultant for the desulphurisation project. The invitation for prequalification for the projects has also been issued by EIL.

According to the notice inviting bids, the bidder should possess experience of having successfully completed, with a single point responsibility, two process plants in the hydrocarbon sector, each of value of Rs 150 crore or more, during the last 10 years. It is stipulated that its scope of work should include basic and detailed engineering, procurement, supply, construction, installation, commissioning and project management.

The annual turnover of the bidder, according to the notice, should exceed Rs 250 crore in any one of the three preceding financial years.