Request for Proposal for Appointment of Arrangers for Obtaining the Guarantee from US Exim

Transcription

1 Request for Proposal for Appointment of Arrangers for Obtaining the Guarantee from US Exim A. Background 1. GAIL (India) Ltd. was incorporated in August 1984 to develop transportation and marketing infrastructure of natural gas in the country. GAIL executed and commissioned the 1700 kms Hazira Vijaipur Jagdishpur (HVJ) gas pipeline system (the longest in India) in as its first project. It has grown organically over the years by building a large network of Natural Gas trunk pipelines, currently around 7000 kms which accounts for over 82% of the total gas pipeline infrastructure in the country. The company today has a diversified business portfolio and has interests in the value added business of natural gas, LPG, Liquid hydrocarbons and petrochemicals and LPG transportation pipeline. 2. GAIL has played a significant role in economic development of the country in general and in Power and fertilizer sector in particular by development of natural gas pipeline infrastructure. The gas pipeline infrastructure laid by GAIL and its efforts in development of gas market besides providing a choice to customers in the form of an alternative environmental friendly fuel has also helped in monetization of the gas reserves and reduction in erstwhile flaring of gas. 3. GAIL is a company with strong financial credentials. The turnover of GAIL in the financial year was over USD 3.6 billion with a net profit of USD 520 million. The net profit CAGR of the company in the last 10 years is 10%. The company has a very comfortable debt equity ratio of 0.10 : 1 as on 31 st March 2008 with a positive cash position. 4. The international rating agency, Moody s International, Hong Kong, have assigned a Baa2 indicative foreign currency debt rating and A3 local currency issuer rating to GAIL in January The company has envisaged a long term strategic plan for growth that includes doubling of the top and bottom lines of the company in the next 5 years time. In this direction GAIL s Board has in November 2007 approved an investment of USD 2.9 billion for upgrading the capacity of existing HVJ / DVPL gas pipeline system and its further expansion / extensions to Chainsa Jhajjar - Hissar pipeline (CJHPL) and Dadri Bawana - Nangal pipeline (DBNPL).

2 6. Following is a snap shot of the proposed expansion programmes envisaged by GAIL:- Pipeline Phase I DVPL GREP CJ HPL DBNPL Phase II DVPL GREP CJHPL DBNPL Proposed Facilities for Augmentation Capacity augmentation of the existing Compressor Station at Jhabua by installation of additional compressors in the configuration of 2 No. running and 1 No. standby, each of 20 MW capacity. Capacity augmentation of the existing Compressor Station at Vijaipur for both new GREP (in the configuration of 2 Nos. running and 1 No. standby) and old GREP (1 No.) New Pipeline of 48 diameter (approx. 500 km long) parallel to the existing line (GREP) New Pipeline of 36 diameter (approx. 100 km long) from Chainsa to Jhajjar New Delivery Terminals at 3 locations viz. Neemrana (KP 54.0), Manesar (KP 54.0) and Gurgaon (KP 67.5) between Chainsa and Jhajjar New Pipeline of 36 diameter (approx. 89 km long) from Dadri to Bawana (Tap-off) Point New Pipeline of 20 diameter (approx. 33 km long) from Bawana (Tap-off) Point to PPCL, Bawana New Despatch Terminal at Dadri and new Consumer Terminal at PPCL, Bawana New Pipeline of 48 diameter (approx. 612 km long) looped with the existing pipeline from Dahej to Vijaipur. Capacity Augmentation of existing Compressor Station at Jhabua by installation of 1 No. additional compressor Capacity Augmentation of existing Compressor Station at Vijaipur by by installation of 1 No. additional compressor Setting-up of new Compressor Stations at Rithonia (between Kelaras and Shivpuri) with installation of compressors in the configuration of 2 No. running and 1 No. standby, each of 20 MW capacity and Jatauli (near Palwal) with installation of compressors in the configuration of 1 No. running and 1 No. standby, each of 20 MW capacity New Pipeline of 20 diameter (approx. 100 km long) from Jhajjar to Hissar New Delivery Terminals at 2 locations viz. Jhajjar (KP 90.0) and Hissar (KP 188.0) New Pipeline of 36 diameter (approx. 78 km long) from Bawana (Tap-off) Point to Chorkarsa New Pipeline of 30 diameter (approx. 103 km long) from Chorkarsa

3 to Sangarur New Pipeline of 30 diameter (approx. 74 km long) from Sangarur to Nangal Spurlines of 18 diameter (approx. 86 km long) from Chokarsa to Yamunanagar and 18 diameter (approx. 101 km long) from Sangarur to Bhatinda New Consumer Terminals at Yamunanagar, Sangarur, Bhatinda, Dorha (Ludhiana) and Nangal and Tap-off for proposed City Gas Projects enroute DBNPL

4 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$ 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:

5 1 st Stage bidding In the first stage, the bidders are requested to submit bids for appointment as Arranger. The Scope of work would include mainly to obtain the guarantee from US Exim or any other ECA. The Scope of Arranger is mentioned in the bid document. 2 nd Stage Bidding In the second stage the bidder(s) who had submitted bids and found qualified in the first stage will be requested to submit bid for cost of debt financing based on the Guarantee from US Exim and indicative term sheet. This RFP is for the purpose for finalization and selection of bank / Arranger for carrying out the Scope defined in the first stage.

6 C. General Instructions for Bidding 1. Parties that meet the qualification criteria and wish to be appointed as Arranger may submit their bids / proposals to GAIL. Necessary information including qualification criteria is available on tender section of GAIL s website 2. GAIL also proposes to have a pre-bid meeting with the prospective bidders. The date, time and venue of the meeting is as follows:- Date: Time: PM Venue: GAIL, Corporate Office, New Delhi 3. The bidders are requested to submit their proposals in two parts i.e. Part I Un-Priced bid for technical and financial bid evaluation criteria and Part II - Price Bid. The technical bid would include the documentary proof for meeting the technical and financial BEC. The technical bid should also include the acceptance of the SOR by way of sign off with the prices blanked out. The financial bid would include the SOR with the prices. 4. The Bid should be valid for a period of three month from the date of opening the Un- Priced Bids. The Bidder shall indicate in Part I Un priced bid and Part II price bid in separate envelops and should also be marked accordingly on the envelopes. 5. The proposal shall be submitted at GAIL s dispatch section (Central Dispatch Section of GAIL) preferably by hand, latest by by 15:00 Hrs. at the address given below. Any bid received after the due date and time would not be considered. Mr. Subir Purkayastha, GM (F&A), # 365 GAIL India Ltd. 16, Bhikaiji Cama Place, R.K.Puram, New Delhi. 6. GAIL reserves the right to accept or reject any of the proposals received at its sole discretion without assigning any reasons whatsoever. Incomplete proposals and proposal submitted after due date or proposals not submitted in the prescribed formats along with documentary proof will be rejected.

7 7. GAIL also reserves the right to cancel the request of quotation / tender without assigning any reasons and without any financial implication on GAIL, what so ever. 8. The financial bids would be opened only for the bidders who are found to be technocommercially acceptable. 9. The bidder shall submit the signed copy of the bid document including the blank SOR as acceptance of the tender conditions. The same may be included in the unpriced bid. 10. Kindly visit our Tender Section of our website for detailed information. For any query and for submission of proposals, kindly contact the following officials. Ms. Nalini Malhotra Mr. Atul Aggarwal SM (F&A) Mgr. (F&A)

8 D. Scope & Deliverables of the Arranger / Lender 1. The scope of the banks / financial institution as Arranger shall be to obtain guarantee from Export Credit Rating Agency (ECA) of USA i.e. US Exim or any other ECA, if required and available, for arranging payment for the supply of GT Driven Centrifugal Compressor Packages. 2. The mandated bank shall be responsible for entire coordination and assistance required in the process of due diligence including assistance in preparation of business plans, projected future cash flows and submission of necessary information, details etc. and finally obtaining the ECA guarantee for maximum eligible amount under the Purchase Order to Rolls Royce. 3. The mandated arranger would also assist in the preparation of the indicative term sheet based on which the bids would be invited from the prospective banks for obtaining funding. E. Technical & Financial Bid Evaluation Criteria (BEC) 1. The bidder should have provided foreign currency loan of at least US$ 50 million in a single transaction (excluding aircraft and shipping) based on a guarantee provided by any ECA to an Indian Company in any one of the past 3 financial years ( to ). 2. Further, the bidder should have arranged US Exim guarantee and provided foreign currency loan of at least US$ 50 million in a single transaction (excluding aircraft and shipping) based on a guarantee provided by an US Exim to any company in or outside India in any one of the past 3 financial years ( to ). 3. The bidder should be a scheduled commercial bank having operations in India with an Indian office duly approved by RBI. 4. The bidder / bank should have a latest international rating of minimum A or equivalent for any one of the international rating agencies viz. S&P, Moody s & Fitch. 5. Bidder must have a global turnover (i.e. the interest and fee income) of at least US$ 132 million in any one of the past 3 financial years i.e. ( to ).

9 Documentary Proof The bidder should provide the following documentary proof for meeting the evaluation criteria along with the technical bid. 1. Certificate from the Indian company or such other document specifying that the bidder has provided the foreign currency loan of at least US$ 50 million in a single transaction (excluding aircraft and shipping) based on a guarantee provided by an ECA to an Indian Company. The bidder may also provide the Annual Report of the Company as mentioned above for the relevant year depicting the amount of loan. 2. Copy of the guarantee letter from US Exim or such other document specifying / in support of proof of guarantee issued by US Exim for raising the debt. The bidder should also provide a Certificate from the company to whom loan was given or such other document specifying that bidder has provided the foreign currency loan of at least US$ 50 million in a single transaction (excluding aircraft and shipping) based on a guarantee provided by US Exim to any company in or outside India. The bidder may also provide the Annual Report of the Company as mentioned above for the relevant year depicting the amount of loan. 3. Copy of the certificate / license given by Reserve Bank of India that the bidder is a scheduled commercial bank and has been allowed to operate in India and open the Indian office for their commercial activities. 4. Copy of the international rating of minimum A or equivalent awarded by any one of the international rating agencies viz. S&P, Moody s & Fitch in the form of rating rational or its equivalent. The rating should be effective on the last date of submission of the bid. 5. Copy of the Annual Report of the bidder for the past 3 financial years i.e , &

10 F. Evaluation Methodology For First Stage Bidding Process 1. The bidder shall meet the BEC in total so as to be eligible for the opening of their price bids. Evaluation would be based on the concept of least cost. 2. Bidder must give their complete and un-conditional consent to the scope of work / deliverable and not take any deviation what so ever. Any unacceptable deviation to the above may lead to the rejection of the bid. 3. The L-1 bidder / bank based on the lowest fees quoted and meeting the evaluation criteria would be given the mandate, for acting as an Arranger for GAIL for the complete scope of work of this proposal. 4. However, in case of a situation where more than one bank quotes the same fees for arranging the US Exim guarantee then the mandate would be given to the bank that has a higher ranking in the Dealogic Table relating to Global ECA backed trade finance loan excluding aircraft and shipping finance. The latest data available for the full calendar year would be considered. For Second Stage Bidding Process 1. In the second stage a fresh bid would be called wherein the bank would be requested to submit the bid for the cost of funding based on an indicative term sheet. 2. The bidder(s) who participated in the first stage bidding process and were short listed in terms of the BEC for price bid opening would only be eligible to participate individually or as consortium in the second stage bidding for quoting the price / cost of funding based on the indicative term sheet. 3. The bids in the second stage would be evaluated and price bids would be opened for the bidders complying with the terms of the indicative term sheet in total. 4. In case the L-1 bank for providing the fund is the same as the bank which arranged the ECA Guarantee, the entire mandate for raising the funds would be given to the same bank. 5. However, in case the L-1 bank for providing the funds is not the same as the bank which arranged the ECA Guarantee, the mandated Arranger bank who have arranged the ECA guarantee would be given an option to match the L-1 rates. In case the Arranger matches the L-1 rate, it would be given a 50% share in the

11 mandate for funding. However, in case the Arranger bank does not match the L-1 rate then the entire mandate for 100% funding would be given to the L-1 bank. 6. The detailed methodology for evaluation of the bids under second stage would be specified in the second stage bid document.

12 G. Other Conditions of the Tender 1. Bidder must give their complete and un-conditional consent to the scope of work / deliverable, Schedule of Rates and not take any deviation what so ever or give any subjective bid. Any unacceptable deviation or subjective bid will lead to the rejection of the bid. 2. The mandated arranger would be required to enter into a confidentiality agreement with the company as per the attached format. The bidder should give its unconditional agreement to the confidentiality agreement to be eligible for Price bid opening. 3. In case the mandated bank is unable to get the guarantee from the ECA due to reasons other than that attributable to the ECA and /or GAIL, then GAIL has the right to put the mandated bank on a holiday for all future business what so ever for a period of 3 years. 4. In addition to scope of work / deliverables as mentioned in para D, the mandated arranger would also co-ordinate with vendor i.e M/s Rolls Royce, USA for obtaining necessary clarification / information / documents to facilitate the due diligence process and in the course of finalization and obtaining the ECA guarantee. Further, the mandated arranger would co-ordinate with vendor i.e M/s Rolls Royce, USA for change in the payment mechanism from LC to ECA backed direct payment. 5. Out of pocket expenses of the Export Credit Rating Agency (ECA) of USA i.e. US Exim or any other ECA if any shall be reimbursed to the ECA directly by GAIL at actuals against supporting documents.

13 H. Time Period The time period for completion of finalization of the scope / deliverable and getting the guarantee from US Exim is 4 months from the issue of mandate letter unless delayed due to reasons attributable to ECA and / or GAIL for which time extension will be given. I. Payment Terms 1. 80% of the fees as per the SOR will be paid as a success fee on issue of guarantee by US Exim % of the fees on completion of balance services including the assistance in preparation of the Term Sheet as specified in the Scope & Deliverables. 3. The fees would be payable within 30 days from the date of receipt of the cenvatable invoice from the bidder. 4. No additional out of pocket expenses would be payable. The fees as quoted would deem to include the out of pocket expenses if any for obtaining the guarantee from US Exim. No expense other than the fees as quoted would be payable by GAIL for the entire scope of work / deliverable. 5. The fees quoted shall be firm and fixed till the completion of the assignment and shall be inclusive of all taxes and duties except service tax, if any, payable in India.

14 Ref No. : GAIL / Treasury/ SCHEDULE OF RATES S.NO. Description Unit Amount (In INR) 1. All inclusive Fees for arranging the guarantee from Export Credit Rating Agency (ECA) of USA i.e. US Exim or any other ECA, if required and available and other services as per the Scope and Deliverables and other terms and conditions specified in the Bid Document. Total Lumpsum (Authorized Signatory) (Name and Designation) Stamp of the Bidder

15 DRAFT CONFIDENTIALITY AGREEMENT This Agreement is made on------,-----, by and between: GAIL (India) Limited (GAIL hereinafter called as Disclosing Party), a company registered under Companies Act, 1956 and having its registered office at GAIL Bhawan, 16, Bhikaji Cama Place, New Delhi and and (collectively the arrangers / advisors ). RECITALS WHEREAS, the Disclosing Party has provided or will provide information to the arrangers / advisors for the purpose of getting guarantee from Export Credit Agencies (ECA) for the Disclosing Party for facilitation of assessment to be made by As part of its work, the Recipient will receive certain strictly confidential or proprietary information, including, but not limited to, data, records, reports, correspondence, notes, studies, documents and contract formats, and other information disclosed about the Company directly or indirectly by the Company and/or its respective affiliates, consultants, advisors and management (the Confidential Information ). Any Confidential Information disclosed by the Disclosing Party and/or any of its respective affiliates, management, consultants, directors, advisors or agents under this Agreement, irrespective of whether it is marked confidential or not shall by treated by the Recipient as confidential. In consideration for the Disclosing Party agreeing to disclose the Information to Recipient, Recipient hereby undertakes and agrees as follows:

16 1. Recipient undertakes that any information which the Disclosing Party disclose to Recipient, or to any director, officer, employee, agent or other representative of Recipient, in any form which in any way is required for Recipient s work with GAIL shall be retained in strict confidence and shall not be disclosed or caused or permitted to be disclosed or discussed, published, reproduced or otherwise directly or indirectly to any third party without GAIL s prior written approval and shall not be used by Recipient for any reason other than to conduct the work assigned to him by GAIL. The obligation of Recipient to retain Confidential Information in confidence shall not apply to: a). Information which is now in or hereafter enters the public domain beyond the control of Recipient and without its violation of this Agreement; or b) Such information, which Recipient discloses under operation of law, rule or legal process; Provided, however, that (i) the burden shall be on Recipient to prove the applicability of one or more of the foregoing exceptions by documentary evidence should the Disclosing Party question the applicability of such exceptions; (ii) as to exception (b), Recipient provides the Disclosing Party with prompt written notice of any request or legal proceeding through which Recipient may be required to disclose such Information under operation of law, rule or legal process. 2. Recipient agrees to use the Confidential Information solely for the purpose of the work assigned for and for no other purpose. 3. Recipient agrees not take copies of the Confidential Information without the prior written request of the Disclosing Party. 4. Recipient agrees to transmit the Confidential Information only to those directors, officers, employees, agents or other representatives who need access to the Confidential Information for the purpose of carrying out its work for the Disclosing

17 Party and who are informed by Recipient of the confidential nature of the Confidential Information and who agree to be bound by the terms of this Agreement. Recipient further agrees to be responsible for any breach of this Agreement by Recipient or any director, officer, employee or other representative of Recipient. 5. Recipient agrees that all Confidential Information and documents disclosed to Recipient hereunder shall be and remains exclusive property of the Disclosing Party. Any tangible form of the Confidential Information including, but not limited to, documents, papers, computer diskettes and electronically transmitted Information shall be destroyed by Recipient or returned together with all copies thereof to the Disclosing Party promptly upon its request. If such tangible form of the Confidential Information is destroyed, a certification of such destruction executed by a duly authorized officer of Recipient shall be delivered to the Disclosing Party. 6 Recipient s obligations under this Agreement shall survive the termination of its appointment to carryout its work with the GAIL regardless of the manner of such termination, and shall be binding upon its successors and assigns. 7. Recipient agrees that no failure or delay on the Disclosing Party part in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof. 8. Any amendments, changes or modifications to this Agreement must be in writing and executed by authorized officials of both the Parties to this agreement. 9. This Agreement constitutes the entire agreement of the Recipient and the Disclosing Party with respect to the subject matter thereof and supersedes any and all prior understandings and agreements between the Disclosing Party and the Recipient.

18 10. Any disputes, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be finally settled by arbitration in accordance the Arbitration and Conciliation Act, 1996 by a sole arbitrator appointed by GAIL (India) Ltd, New Delhi The place of arbitration shall be New Delhi and the language to be used in the arbitral proceedings shall be English. The award of the sole arbitrator shall be final and binding on both parties. IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date first written above. GAIL (INDIA) LIMITED Name of Arranger / Advisor By: By Name: Title: Name: Title: WITNESS 1. 2.