Pertamina told to rexamine Natuna pipeline tender
Pertamina told to rexamine Natuna pipeline tender
JAKARTA (JP): Minister of Mines and Energy Kuntoro
Mangkusubroto has ordered the state oil and gas company
investigate alleged irregularities in the bidding process for the
construction of a 650-kilometer underwater pipeline to supply
natural gas from west of the Natuna island group to Singapore.
"We have instructed Pertamina to examine the bidding process.
We are awaiting the reports of the probe," Kuntoro said.
He said he would call for the project to be retendered if he
found irregularities in the bidding process. Deadline for the
tender was last week with PT McDermott Indonesia, a unit of
American contractor McDermott Corp., tipped most likely to
succeed.
Although a final result for the tender is yet to be announced,
some legislators protested the bidding citing the alleged
affiliation of McDermott with conglomerate Mohammad "Bob" Hassan,
the golfing partner of former president Soeharto.
"If the bidding was conducted in conflict with the existing
regulation on tenders, we shall annul (the result). It's very
easy (to do)," Kuntoro said.
The West Natuna gas consortium comprising U.S.-based Conoco,
Britain's Premier Oil and Canada's Gulf Resources announced that
McDermott proposed the lowest bid at US$335 million for the
project, making it most likely to win the tender.
Also bidding were ETPM of France, Japan's Nippon Steel and
Saipam of Italy, which submitted proposals of $382 million, $415
million and $372 million respectively.
Singapore's SembGas will buy the gas for 22 years from 2001.
The consortium said it would select its preferred candidate
soon and submit its recommendation to Pertamina for a final
decision.
The bidding process sparked controversy following the failure
of Allseas of the Netherlands and Hyundai Heavy Industries of
South Korea to pass the technical evaluation phase.
Several members of the House of Representatives Commission V
for industry and mining accused the consortium of unfairly
pushing the companies aside by engineering the bidding terms.
They called on the government and Pertamina to order the
consortium to eliminate the terms and allow the two companies to
take part in the bidding.
Secretary-General of oil and gas at the Ministry of Mines and
Energy Soepraptono Soelaiman, in several hearings with the House,
promised to respond to the demands.
The consortium responded by relaxing several terms, but
refused to change the requirement that bidders have experience in
building 2.5 kilometers of pipeline per day, experience Hyundai
lacked.
Commission vice chairman Muhsin Bafadal, said the government
should annul the tender results since the process was unreliable
and in conflict with the agreement between the government and the
House.
Kuntoro said he would consult the commission regarding the
tender result.
"What exactly does the commission want? Do they want the
project to be retendered or the bidding terms relaxed, or
something else? We shall explore all the (options)," Kuntoro told
Antara. (jsk)