The decision by TCP to award its June 5 urea tender to Transammonia instead of Toepfer, the lowest offering company, led to a firestorm of protests and recriminations. And now time has run out for an award to stick.
Toepfer, which offered 50,000 mt at $335/mt CFR, was passed over by TCP because, according to the buying house, Toepfer presented a non-responsive offer. Instead, the TCP award committee decided to give the contract to Transammonia for 50,000 mt at $337.17/mt CFR. Toepfer immediately challenged the decision. At the same time politicians and members of the urea-producing community in Pakistan objected to the decision.
By the close of business on Friday, June 7, TCP had rescinded the Transammonia order and was ready to give the award to Toepfer. The move came after the commerce ministry sent an official letter to TCP reminding them that Pakistan law required them to take the lowest offer. A letter was sent to Pacific Exim, the Toepfer agent in Pakistan, that its client won the award.
Local media say the letter was received about 10:30 pm Friday. By the time Pacific Exim received the letter, however, the validity of the offer expired. Local media report that TCP asked Pacific Exim to extend the validity to Monday. The buying house said the delay would be necessary because the Arab Gulf countries were closed on Friday and the European companies would be closed through Sunday.
Pacific Exim and Toepfer said an extension was not possible at the offered price, however. Pacific Exim told local media that once TCP announced it was giving the award to Transammonia, Toepfer released the tons it had on reserve for the tender.
The melodrama will mean that TCP will have to call another tender for the remaining 50,000 mt the country needs for the Kharif season. In the meantime, urea producers renewed their position that if the government were to ensure sufficient natural gas supplies, they could make up the urea shortfall and charge the government less than the imports.