SRUs: Are non-traditional players driving costs too low to stay viable?
There is crowding of bidders around Sulphur Recovery Units in refienries, it is claimed.
8The SRU is the simpler of the refinery units, and it has been noticed that power sector players like BHEL and ISGEC are at the forefront here when it comes to bidding
8But there are many pitfalls in such a strategy
8And driving down costs, like ISGEC reportedly did, could be detrimental to the bidder
Find out more
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An SRU unit is the simpler of the refinery units but it is an essential part. So if there are delays on the part of the new bidders, like ISEGEC in completing the projects, as they may have bid too low, the entire refinery/petrochem complex can get delayed in Barauni and in Panipat.
 There has been a price escalation in SRUs and yet prices quoted are lower than before.
 There should ideally be a diferernce of around Rs 10 to Rs 14 crore between two bidders and when the differential is higher, then the L-1 bidder is bidding in a distressed manner to grab a contract, and that could be detrimental both for the bidder and the owner in the long run.
 Established players, who were natural SRU bidders, are now claiming that the power contractors like ISGEC and BHEL might have bid well below the break even price.
 Only time will tell if that is correct or not
**********************************
An SRU unit is the simpler of the refinery units but it is an essential part. So if there are delays on the part of the new bidders, like ISEGEC in completing the projects, as they may have bid too low, the entire refinery/petrochem complex can get delayed in Barauni and in Panipat.
 There has been a price escalation in SRUs and yet prices quoted are lower than before.
 There should ideally be a diferernce of around Rs 10 to Rs 14 crore between two bidders and when the differential is higher, then the L-1 bidder is bidding in a distressed manner to grab a contract, and that could be detrimental both for the bidder and the owner in the long run.
 Established players, who were natural SRU bidders, are now claiming that the power contractors like ISGEC and BHEL might have bid well below the break even price.
 Only time will tell if that is correct or not Back
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