L&T’s Algeria project derailed after BRICS ‘snub’
NEW DELHI : A failed bid by Algeria to join the Brics grouping has impacted a $1.5 billion oil and gas project between the country’s state-run Sonatrach and Indian conglomerate Larsen & Toubro Ltd, three people aware of the development said. Despite the engineering multinational in a favourable position to bag the contract, the award did not go through and the tender was cancelled.
In response to a mailed query, Subramanian Sarma, whole-time director and senior executive vice president for energy at L&T, confirmed the cancellation of the tender by Sonatrach and said that the project was only at the evaluation stage, even while emphasizing that L&T had completed another project for the company recently, and was in the race for several other upcoming projects “We had submitted a bid for one such large contract and were placed favourably as per the public bid opening proceedings. However, as per our understanding, after further evaluation of the project’s economic viability based on the submitted prices, the client has decided to cancel the tender," Sarma added.
He said the project was only at the evaluation stage and isn’t part of the company’s order book announced till date. Queries emailed to Sonatrach, the ministry of external affairs and the Algerian Embassy in New Delhi remained unanswered at press time.
According to the three people cited above, Algeria’s inability to secure membership in Brics led to diplomatic tensions with India, which had a spillover effect on Indian businesses looking to expand their presence in the Algerian energy sector. Prior to the Brics leaders’ summit in New Delhi in August, Algeria had expressed an interest in joining the grouping.
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