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OGDCL chief denies violation of rules
- Thursday, January 26, 2012 - From Print Edition


ISLAMABAD: The Oil & Gas Development Company Limited (OGDCL) has awarded a Letter of Intent (LoI) of $800 million (Rs72 billion) for project management consultancy services of three projects to a company without fulfilling the basic eligibility criteria, it was learnt.


The OGDCL management has issued LoI of $800 million to M/s Zishan Engineers (Pvt) Limited (ZEL) for developing three projects, including Kunar-Pisakhi-Deep, Neshpa and Mela, without seeking the reply of grievance committee of the company for pre-qualification of the ZEL for the multi-million dollar contract, a senior functionary of the OGDC told The News.


The three projects will altogether add about 500 MMSCFD gas, 24,000 bbls/day oil and about 500 metric tons/day LPG in the production, which will significantly reduce the current energy crises of the country but these have again been endangered by the OGDCL management by awarding the projects to a non-deserving private party, feared an official of the petroleum ministry who spoke on condition of anonymity.


M/s ZEL was pre-qualified by the OGDCL to submit the bid against the tender enquiry of KPD-TAY project. The OGDCL re-tendered this KPD-TAY without returning the technical and commercial bids to ENAR — the other bidder in the tender — to accommodate the said private party, the official added.


According to OGDCL’s criteria, the official said, M/s ZEL was not eligible as it does not have the required experience of completing five projects of similar size because allegedly M/s ZEL has not completed a single project of commercial value of over $0.5 million. But surprisingly, it was still blessed with the lucrative LOI.


Acting Managing Director OGDCL, Basharat Mirza, who is looking after the company on ad hoc basis for the past six months, told this correspondent. “There is no PPRA rules violation and M/s ZEL was the lowest bidder.” To a question of grievances for eligibility criteria of M/s ZEL filed by the other bidder for this project, Mirza said, “The reply of the grievances committee of the company is not mandatory for awarding the LoI to the lowest bidder.”


Mirza further claimed that the losing bidder’s bid was nearly 100 percent more than the awardee i.e. M/s ZEL and that is the main reasons that the management had decided to award the contract to the lowest bidders.


However, spokesman of the losing bidder also claimed that they (M/s ENAR) had offered 50% lowest bid but they were knocked out on “technical basis” from the bid. He further apprehended that the OGDCL management would compensate the awardee bidders by making changes through “variation order, change order or amendment in the final MoU”.


As per PPRA rule 48 & SOP 46 of “Manual of Procurement Policies and Standard Bidding Documents for Goods, Works and Services” of PPRA, the other bidder sought rebuttal from grievance committee of OGDCL pointing out grass-root violation in the pre-qualifying of M/s ZEL, but the OGDCL grievance committee called the aggrieved management for a meeting on January 23, 2012, alleged the official of the other bidder of this multi-million dollar project.


Instead of announcing the result to ENAR’s representatives, the OGDCL had arranged a kick-off meeting on the same day with M/s ZEL for issuing the LOI of the said projects.


The team of M/s ZEL comprises three ex-management officials of ENAR. Mahmood Ali Ahmad, Pervaiz Rizvi and Sajid Pervaiz have been shown as ZEL employees whereas they are already employees of ENAR Petroleum Refining Facility (EPRF). Similarly, these executives have allegedly been involved in malpractices, misuse of power and illegal acts by forming a trust, incurring a huge loss to the ENAR, an attached department of the Ministry of Production. A case with FIA, Karachi, was filed against these individuals, said a letter of the ENAR to Director FIA and exclusively available with The News.


Responding to various queries by The News, Syed Atiq-uddin Shah, Managing Director of M/s ZEL, only said, “There is no irregularity in the bidding process” and then cut off the call.


The KPD-Tando Allah Yar project, which was annulled more than three times by the OGDCL management, would produce 400 MMSCRFD gas, 4,500 bbl/day oil and 400 metric tonnes of LPG per day, Mela has the capacity of producing 20 MMSCFD gas, 7,500 bbl/day oil and 20 metric tonnes/day LPG, whereas the Neshpa will produce 45 MMSCFD gas, 1,200 bbl/day oil and 40 metric tonnes/day LPG.