Request for Proposal for Appointment of Arrangers for ... - GAIL

B. Order for Compressor stations & ECA Financing
1. As part of the project GAIL has placed a purchase order no.
GAIL/ND/C&P/PROJ/DBPL/07-72/04/C-08/48 dated October 20, 2008 on M/s
Rolls Royce Energy Systems Inc., USA for supply of GT driven Centrifugal
Compressor Packages for Vijaipur & Jhabua stations for Vijaipur – Dadri - Bawana
Pipeline project.
2. As per the P.O., total value for supply of the GT Driven Centrifugal Compressor
Packages on FOB international sea port of exit basis is US$ 132 million. The
expected due date for payment on FoB basis is 5 th January 2010 for approximately
US$ 41 million & 5 th March 2010 for balance US$ 91 million. As per the terms of
payment, 100% payment would be released against the supply of equipment on FoB
and services, if any.
3. It has been confirmed by M/s Rolls Royce that the source of equipments and material
for manufacture of the compressor machine is mainly from USA (80%) and balance
from other countries. However, actual sourcing of equipments and material for
manufacture of the compressor machine mainly from USA would be given by M/s
Rolls Royce at the time of due diligence.
4. M/s Rolls Royce has also confirmed that they would extend their full cooperation to
GAIL and its arranger including ECA of USA for carrying out the due diligence for
financing the compressor machine.
5. GAIL has opened the LC of US$ 130.07 million (after excluding the Indian agent
commission payable in India) with M/s IDBI Bank, New Delhi in terms of purchase
order. It is proposed that after finalization of ECA backed loan, the payment through
LC may be substituted by direct payment by the lenders to the vendor or any other
method as mutually agreed upon in consultation with the vendor and ECA.
6. GAIL proposes to obtain US Dollar denominated debt funds for the import of GT
Driven Centrifugal Compressor Packages. Since this import / procurement is a major
foreign currency capital expenditure, therefore, financing of the proposed capex is
sought through foreign currency borrowing guaranteed by the ECA of the county
from where the export of the capital equipment is being done.
7. In order to finalize the ECA based financing GAIL will follow two stage bidding as
discussed below: