Bidding for Taipower gas contract short on bidders

STAFF WRITER , WITH AGENCIES

Sat, Jan 20, 2001 - Page 18

Taiwan state utility firm Taiwan Power Co (Taipower, 台電) said yesterday it passed on a tender to supply liquefied natural gas (LNG) for 25 years to its Tatan (大潭) power plant in the northern county of Taoyuan.

A Taipower official, who attributed the failure of the NT$400 billion tender to a low number of bids, said the firm may adjust conditions set in its invitation-to-bid (ITB) document and will invite bids again in the near future.

"The law requires at least three applicants for the tender, but only two submitted bids" said the official, who declined to be identified.

"A second invitation to bid will be announced in the coming weeks.

Tentatively, we hope to have the next submission period end and examination of bids carried out in June," he said.

Taipower initially planned to announce the winner of the contract on Nov. 30, but postponed the deadline to January 15 due to some adjustments in the tender documents.

According to market insiders, during the long submission period, several foreign oil companies including Exxon Mobil, Shell Co., and French Total FinalElf, which had formed a bidding group with Asia Cement (亞洲水泥), decided against bidding.

In addition, Pacific Construction (太平洋建設), another major construction firm, which signed a letter-of-intent with Indonesia's Pertamina for LNG supplies, also dropped out of the bidding.

In the letter, the LNG supply was to be originated from Indonesia's Tangguh Project gas field.

Sources familiar with the bidding said that despite having gone through a few adjustments, conditions set in the ITB were very unfavorable for interested suppliers and diverged considerably from international standards and practices.

"If the conditions aren't adjusted again, I believe it's almost certain that none of the foreign companies will consider bidding in the next round," a source said.

In a meeting with Economics minister Lin Hsin-yi (林信義) yesterday, some US firms have complained that conditions stated in the Tatan power plant tender were discriminatory against foreign firms -- saying firms interested in the project are subject to paying compensation to Taipower if they were unable to deliver the gas on time.