Financial Daily from THE HINDU group of publications
Thursday, Nov 10, 2005
Financial Daily from THE HINDU group of publications Thursday, Nov 10, 2005 |
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Corporate
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Outlook Delay in finalising contracts may hold up IOC's polymer project Pratim Ranjan Bose
Kolkata , Nov. 9 DELAY in finalising the contracts may affect the completion schedule of the proposed Rs 6,300-crore naphtha cracker and downstream polymer unit project of Indian Oil by at least a year. Completion of the project would mark IOC's first major entry into petrochemicals business. Though scheduled to be completed by November 2007, IOC is unlikely to issue work order for the core project before January 2006. The bidders have already indicated that they would be requiring 34 months for completing, which practically sets the completion date to November 2008. The project is a part of IOC's ongoing investment programme of Rs 11,800 crore for doubling the refining capacity to 12 million tonnes, creation of supply logistics and setting up a petrochem facility at Panipat. Commissioning of the Rs 5,100-crore refinery expansion project is well on schedule. IOC has already appointed Engineers India Ltd for detailed cost estimation of the naphtha cracker and polymer project. Company sources said that the entire project is divided into 13 packages. While the contract finalisation process for 11 peripheral or smaller projects are well on schedule, the core project has received lukewarm response from bidders. Irrespective of several rounds of postponement of the due dates for receiving bids, the company has so far received only two bids. Discussions are still on with the bidders over finer details on the technical aspects. While hoping to reach at a conclusion over the same by next week, IOC would take at least two months for opening the financial bids and issuing the work order. "Such delays are not exceptional even on a global scale," a senior IOC official said, adding that though the bidders have indicated a minimum timeframe of 34 months, which is on par with the global norm, the company would try to reduce it."
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