Winner announced for Hormozgan steel project

06 September 2002

Germany-registered Mines & Metals Engineering (MME)has been selected for the first package on the construction of an integrated steel plant for the local Hormozgan Steel Complex (HSC). HSC is preparing to issue a letter of award to MME, which won the deal in competition against three companies. Revised proposals were submitted to HSC on 1 September for the project's second package (MEED 2:8:02).

Package 1 covers the construction of a 1.65 million-tonne-a-year (t/y) direct reduction iron (DRI) facility. The contract specifies that MME will be required to supply 53 per cent of the equipment and services required for the project from local sources, with the remainder to be imported. The final price is set to be in the range of $140 million-145 million.

MME has yet to complete financial arrangements for package 1, which will be financed by a combination of commercial loans and export credits.

MME's closest competitor in the race for the contract was a team of Iran International Engineering Company (IRITEC)and its Italy-registered subsidiary, Irasco, which also submitted a proposal below $150 million. It is understood that a third bid from Germany's Ferrostaalwith a local company identified as IPD, a Defence Ministry affiliate, was priced almost $100 million above the lowest offers. A fourth proposal from Italy's Danieli & Company, with the local Namvaran, was rejected by HSC on technical grounds.

Three companies submitted revised proposals on 1 September for the second package covering a 1.5 million-t/y slab and lime-calcining plant. The bidders are: Danieli/Namvaran; Argentina's Techint, with the local Industrial Development & Renovation Organisation and an unidentified Japanese firm; and Germany's SMS Demagwith Irasco and IRITEC. The bid evaluation is set to be concluded by October.

The integrated steel venture will be located in the mines and metals special economic zone in Bandar Abbas.

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