The Hindu Business Line : Gardes-Essar backs out of CBM contracts bid

Meeting a deadline
The dismissal of the petition brought to end the one-month stay on the award of the said contracts by ONGC. The development is expected to help the energy major meet the 2007 deadline for CBM production.

Kolkata , March 1

The consortium of Gardes Energy Services Inc, Essar Oil and Essar Construction has withdrawn the petition filed in the Calcutta High Court against ONGC alleging violation of procedures and foul play by the latter in awarding contracts for development of three coal-bed methane (CBM) blocks in Jharkhand.

The dismissal of the petition brought to end the one-month stay on the award of the said contracts by ONGC. The development is expected to help the energy major meet the 2007 deadline for CBM production. The stay order was issued on February 22 and the petition was withdrawn on February 24. Essar Group sources, however, did not respond to queries on the sudden change in its decision.

ONGC had earlier rejected the Gardes-Essar consortium's bid and favoured the consortium of Mineral Exploration Corporation Ltd, Shivani Oil and Gas Exploration Services Ltd and Express Drilling Services for the job. The $200-million contract targeted integrated exploration and development of CBM in Jharia, Bokaro and Parbatpur blocks in Jharkhand in four-and-a-half years. The tender was floated on June 10, 2005.

Challenging ONGC's decision, Gardes-Essar consortium filed a writ petition in February. The consortium alleged that ONGC did not consider its expertise in drilling below 1,200 metres, which was critical for development of the blocks and raised issues beyond the scope of the tender.

The consortium felt that its bid was rejected despite the fact that it had duly submitted the requisite documents within the due time frame.

Responding to the petition, Mr Justice G.C. Gupta of Calcutta High Court ordered ONGC on February 22 to refrain from awarding the contracts over the following four weeks.

However, in a surprise move, on February 24 Gardes-Essar consortium withdrew the petition.