Marubeni accused of dumping pipe for West Natuna project
JAKARTA (JP): The Association of Indonesian Steel Pipe Manufacturers accused Japanese trading house Marubeni on Friday of dumping practices to win the tender to supply steel pipes for the West Natuna gas pipeline project.
Association chairman Warasdimulya said local steel pipe manufacturers were able to meet the technical requirements demanded by project owner PT McDermott Indonesia.
However, Marubeni won the tender through unfair business practices, he said.
"Local producers are capable of meeting the technical criteria demanded by McDermott but the price of US$539 per ton set by McDermott for the pipes was unreasonable," Warasdimulya said in a statement.
The Indonesian trade attache in Tokyo informed the association the $539 per ton agreed upon by Marubeni was about half of the price of pipes sold by Japanese steel producers in its home country
McDermott Indonesia, a subsidiary of American construction firm J. Ray McDermott SA, will construct a 650-kilometer underwater pipeline to carry natural gas from fields owned by the West Natuna Group consortium to Singapore.
The consortium comprises Conoco Corp. of the United States, Gulf Resources of Canada and Premier Oil of Britain.
The consortium will supply gas to Singapore's Sembawang Gas for 22 years beginning in 2001.
The Natuna group awarded the construction project to McDermott through an open and transparent bid involving four international construction companies.
An informed source at McDermott told The Jakarta Post the company selected Marubeni to supply the pipes for the project in "transparent and open" bidding last year. Also taking part in the tender was local pipe producer South East Asia Pipe Industries (SEAPI), a unit of Bakrie Group.
The source said bidding was open to all local pipe producers, but only SEAPI meet the technical requirements.
Marubeni won the tender because of its lower price, he added.
Warasdimulya said McDermott would begin importing 150,000 tons of steel pipe from Marubeni next month with a 25 percent import duty exemption provided by the government.
He said 150,000 tons of pipe was a significant quantity for local steel pipe makers, which had cut their annual output to 200,000 tons from 1.5 million tons due to weak demand during the economic crisis.
"The importation of such a large quantity of steel pipes through dumping, coupled with import duty facilities provided by the government, has aggravated the hardships currently being experienced by the national pipe industry. So, it is only reasonable to expect the national pipe industry will go bankrupt in the near future," he said.
He called on the government to slap antidumping fees on the pipe imports from Japan to protect local producers against dumping.(jsk)