January 21, 2005
E-mail puts Norwegian PSV deal at risk
An anonymous e-mail to Norsk Hydro has put in jeopardy plans by Farstad Shipping to build two UT 751 E platform supply vessels at Aker Brattvag.
On December 2, 2004, Farstad reported that, after an extensive tender process, Norsk Hydro had signed a Letter of Intent for delivery of supply vessel services. The Letter of Intent included an existing vessel (Far Symphony) for five years, and two newbuildings for ten years.
On December 17, Farstad said it had reached an agreement with Aker Brattvag AS for building two UT 715E PSV's for delivery in May and October 2006. The contracts with the yard were conditional on the entrance of final charter contracts with Norsk Hydro.
However, Farstad today said that "as a consequence of inquiries to the management of Norsk Hydro in the form of an anonymous e-mail, Norsk Hydro decided to make an internal investigation of the conditions regarding the award of the contract."
Norsk Hydro says its internal auditors discovered a breach of internal procurement procedures that meant it could not guarantee that all bidders had been treated equally. "It was revealed that technical information was handled in conflict with Hydro's procedures prior to tender opening," says a press statement.
"There is nothing to suggest that any individuals have profited personally from the irregularities," says Norsk Hydro.
"Due to the nature of the findings, we have decided to conduct a new round of invitations to tender so as to be absolutely sure that all bidders get equal and fair treatment. We will implement necessary measures to ensure that Hydro's procurement procedures are fulfilled and that the outside world has complete confidence in our procurement processes," said executive vice president Tore Torvund.
A new tender round will now be held and all bidders who participated in the first round will be invited to tender.
Invitations to tender will be sent to bidders "in a couple of months."
Farstad Shipping was informed about this decision Wednesday evening and says "it is important to emphasize that Farstad Shipping had no knowledge that such an incorrect distribution of technical information had taken place."
Farstad Shipping says it will receive compensation from Norsk Hydro to meet expenses accumulated after the signing of the Letter of Intent. It says that Aker Brattvag has given it an extension until Monday, January 24 to decide whether or not to confirm the newbuilding order.