ONGC chopper deal in trouble

ONGC chopper deal in trouble
SUNIL JAIN

NEW DELHI, FEB 2: ONGC's bid to hire three new helicopters for its offshore drilling operations have run into rough weather, in less than a fortnight after the price bids were opened. The crux of the problem lies in the fact that, of the four bidders, price bids of two firms were not even opened. To add to the problem, the bids of Deccan Aviation Private Ltd are almost double that of ONGC's subsidiary Pawan Hans Helicopters. And since Pawan Hans has just one chopper which meets ONGC's needs, it may have no option but to hire two machines from Deccan at an additional cost of around Rs 20 crore per chopper per year. The contract is for a period of two years, but the last contract was extended by a year.

ONGC sources, however, point out that in view of the sharp difference in the prices of Pawan Hans and Deccan, they may even have to re-tender it, especially since the CVC has said that there must be no post-tender negotiations. The difference in costs is even more stark when a comparison is made with the bidsof Mesco which was never opened. ONGC's current contract with Mesco, entered into in 1997, is at a price of Rs 76,000 per hour of operations, and it is believed that MESCO's current bid is in the same price band. Compare this with Deccan's bid, and the additional amount ONGC would be paying will be around Rs 25 crore a year for each of the helicopters. That's a hundred crore extra during the life of the contract.

The reason why ONGC did not open MESCO's price bid, according to sources, is that at the time of the opening of bids in the third week of January, MESCO's flying license had been terminated by the Directorate General of Civil Aviation (DGCA). According to sources, this was done on the grounds that some of its directors Rita Singh, Jitendra Singh and Natasha Singh did not have Home Ministry security clearances. As for the other bidder whose price-quotation was not opened, Neutral Engineers, according to sources, it did not submit relevant clarifications asked for by ONGC on its technicalbid.

What makes the Mesco story interesting is that under the tender rules, airlines don't have to have valid flying licenses at the time of bidding these are to be provided later and so ONGC may have acted hastily in rejecting its bid. ONGC, appparently, was of the view that since MESCO's license was terminated in January, and then it was given an extension by the DGCA till just the end of the month, there was no way it would get a fresh one. And, given this, MESCO wouldn't even be able to fulfill its existing contract with ONGC which runs out in April.

Mesco, meanwhile, petitioned the DGCA again, after its license was terminated in January. On January 31, it got permission from the DGCA to fly `till further orders'! The question now is whether Mesco will be allowed to re-enter the fray Pawan Hans and Deccan's bids are currently being examined by the Price Committee.