NMDC Issues Termination Notice To BHEL For Delay In Rs 1,395-Crore Contract
BHEL had in 2011 bagged the Rs 1,395 crore contract from NMDC for handling raw material at its Nagarnar steel plant in Chhattisgarh. The project is yet to be completed. (Photo: BHEL website)

NMDC Issues Termination Notice To BHEL For Delay In Rs 1,395-Crore Contract

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State-owned miner NMDC Ltd. has issued a termination notice to engineering firm Bharat Heavy Electricals Ltd. as the latter has not been able to complete a Rs 1,395 crore contract awarded in 2011, according to a source.

The completion date of the work was Feb. 28, 2014.

BHEL had in 2011 bagged the Rs 1,395 crore contract from NMDC for handling raw material at its Nagarnar steel plant in Chhattisgarh.

"NMDC has invoked termination clause against BHEL in raw material handling system package of Nagarnar," said the source.

NMDC Chairman Managing Director N Baijendra Kumar has confirmed the news. A notice has been issued to BHEL as they were not expediting the work even after several rounds of meetings at ministry level, he said.

"NMDC has invoked the termination clause against BHEL by giving notice to BHEL on June 25, 2019 for termination of the contract. NMDC will take steps for completion of the project through new route," the source said.

The raw material handling system package (Pkg-01) was awarded to BHEL on Aug. 1, 2011 at a cost of Rs 1,395 crore, he said, adding that original date of completion was Feb. 28, 2014.

"Even after continuous follow up at NMDC and at the ministry level, BHEL is not accelerating the progress of the project. The progress of work has been abysmal, and even today, after approximately 94 months since commencement of the contract; the raw material handling system is far from completion stage," the source added.

BHEL was to set up the raw material handling system package for NMDC's three million tonnes per annum steel plant at Nagarnar in Chhattisgarh on turnkey basis.

The contract was signed in the presence of then BHEL CMD BP Rao and then NMDC CMD Rana Som.

The project includes engineering, procurement and construction of complete RMHS, from receipt of various raw material (coal, iron ore, etc.) from wagon tippling to crushing.

The contract also included installation of conveyor length of nearly 30 km.

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