Chevron’s Dhaka deal runs into trouble

August 30th, 2009 - 11:29 pm ICT by IANS  

Sheikh Hasina Dhaka, Aug 30 (IANS) Prime Minister Sheikh Hasina has sought ‘explanation’ from state-run Petrobangla for awarding a gas compressor station contract to American multinational Chevron last year, canceling an open tender.
Chevron received the contract although it had not replied to 16 technical questions raised by a consultant, Gas Transmission Company Limited (GTCL), The Daily Star said Sunday quoting sources in the Prime Minister’s office (PMO).

It said the response of Petrobangla chairman M. Muktadir Ali, who was also the GTCL chairman, was “smoky”.

While seeking the energy ministry’s approval late last month for allowing installation of Chevron’s compressor station over GTCL system, Muktadir Ali “concealed the fact” that Chevron had not clarified on the 16 technical questions.

Petrobangla’s move to award the deal to Chevron posed serious questions because the GTCL board headed by the Petrobangla chairman cancelled in May the GTCL tender to award Korean company Hyundai a contract to install three compressors under an Asian Development Bank (ADB) fund.

The GTCL tender was opened in February, but the Petrobangla chairman had asked Chevron for this job in December last year.

Muktadir Ali said Hyundai had been “unresponsive” when tenders were floated last year. On the other hand, Chevron installing a compressor at Muchai area would improve gas supplies by 50-60 million cubic feet.

He said Hyundai’s compressor comes with a price tag of $44.47 million but Chevron’s offer costs $52.7 million and its machines are bigger.

Then he pointed out that the Hyundai compressor had 35,000 horsepower (HP) to Chevron’s 45,000 HP, with the higher horsepower justifying the price tag.

However, quoting unnamed Petrolbangla officials, the newspaper said: “Spending $52 million for a compressor to increase gas flow of 50-60 mmcfd is not justified. Besides, an ADB consultant has determined that the compressor would actually increase gas flow by merely 9 mmcfd.”

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