Seven line up for Nisco steel complex

12 July 2002

Seven companies submitted bids by the 6 July deadline for the turnkey construction of a major pelletising plant in Sirjan in Kerman province. The project was retendered in March by the client, National Iranian Steel Company (Nisco), following the introduction of stricter international tender guidelines by the Industries & Mines Ministry (MEED 22:2:02).

The project covers the construction of a 4 million-tonne-a-year (t/y) pelletising plant, which will be operated by Nisco subsidiary Gol-e Gohar Iron Ore Company, the operator of the country's biggest iron ore mine. It is understood that Nisco has budgeted about Eur 140 million ($136 million), but industry sources say the bid prices are likely to come in higher than this figure.

The companies that submitted proposals are: Austria's Voest Alpine Industriean-lagenbau, with three local firms; a consortium led by Germany's Lurgi, including a division of the European ABB, Spain's Taim, and a local firm; Italy's Danieli & Company, with the local Industrial Development & Renovation Organisation (IDRO); Japan's Kobe Steel, with at least one local firm; the local Namvaran; the local Nisco subsidiary Ghaem Reza; and a Chinese/local team.

Industry sources say the evaluation of technical proposals is expected to be completed by September, with financial proposals, priced in euros, to be evaluated thereafter.

Six companies bid for the project when it was first tendered in early 2001, with Kobe ranking first following the evaluation of both technical and financial bids.

Nisco decided to retender the project earlier this year after Industries & Mines Minister Eshaq Jahangiri announced new guidelines for international tenders, calling for at least 51 per cent local content and assigning to local contractors the leading role in local/international partnerships.

Companies bidding for the project are required to provide their own finance schemes.

Nisco subsidiary Khuzestan Steel Companyhas invited bids by 15 September to increase the production of semi-finished products to 3.4 million t/y. The project is set to be carried out on a buy-back basis (see Tenders).

Another local company, Hormozgan Steel Complex, is evaluating local and international bids for an integrated steel venture in the mines and metals special economic zone in Bandar Abbas. The project covers the construction of a 1.65 million-t/y direct reduction iron plant and a 1.5 million-t/y slab and lime-calcining plant. It is understood that at least one European bidder has withdrawn from the scheme due to lack of domestic demand and unfavourable world market conditions (MEED 12:4:02).

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