IP gas pipeline: German consultancy firm hired, Iran told

Pakistan has informed Iran that Project Management consultancy contract has been awarded to a Germany-based ILF Consulting Engineers for Iran-Pakistan gas pipeline project that would cost $55 million, Business Recorder has learnt. During two-day talks held on April 14-15 in Tehran, Pakistani side headed by Additional Secretary Petroleum Zafar Iqbal Qadir reviewed the progress on IP gas pipeline project.
Iranian side informed Pakistani delegation that survey had been completed to start construction work on the remaining portion of 250 kilometer gas pipeline. Iran has already constructed 900 km pipeline. Pakistani delegation said that consultancy contract had been awarded to Germany-based ILF firm that would work in joint venture with Pakistan engineering consultancy agency, National Engineering Services Pakistan Limited (Nespak). Sources maintained that consultancy work would be divided into two phases that would cost $55 million. "Finance Ministry will arrange funds to pay for the consultancy contract," sources said adding that a proposal was already under discussion to seek loan from National Bank of Pakistan.
Earlier, SNGPL and SSGCL had insisted on participating in the consultancy services contract adding that feasibility study could be undertaken by the ILF but SNGPL and SSGC would undertake Route Survey and the Front End Engineering Design (FEED) on their own. But now it has been decided that SNGPL and SSGCL will participate only in Engineering Procurement and Construction (EPC) contract.
ILF was also opposed to split the scope of work at this stage saying that it would negatively affect both cost and co-ordination to handle the project in an efficient manner and therefore it was not a good solution. The overall cost of services, through the international tendering one and half years ago, received by ILF-Nespak joint venture for both stages, stood at 48.9 million dollars - 15.5 million dollars for stage-1 and 33 million dollars for stage-2 - against the second lowest bidder, Worley Parson's 138.7 million dollars. ILF was selected through an open competitive bidding process and spent nearly half a million dollars for augmenting local manpower capacity to handle the work in Pakistan.
Only a pre-feasibility study has been undertaken on the IP gas pipeline project and a bankable feasibility study and FEED are required to approach the investors and financiers for tendering and procurement of materials, equipment and appointment of construction contractors.