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NMDC sends termination notice to BHEL for 5-year delay in delivering project

The project was due to be completed on February 28, 2014 and has not been delivered as yet, a source said
New Delhi: NMDC has issued a termination notice to engineering firm Bharat Heavy Electricals Limited (BHEL) for failing to complete a Rs 1,395-crore contract awarded to it in 2011 despite several interventions. The news came from a source who did not wish to be named and was later confirmed by NMDC CMD N Baijendra Kumar. The project was due to be completed on February 28, 2014, and has not been delivered as yet.

Termination notice was sent on June 25

“NMDC has invoked termination clause against BHEL in RMHS (raw material handling system) package of Nagarnar,” the source said. The termination notice was sent to BHEL on June 25, the source added. NMDC is now expected to take steps for the completion of the project through a new route.

The project

The raw material handling system package (Pkg-01) was awarded to BHEL on August 1, 2011, at a cost of Rs 1,395 crore. BHEL was to set up the raw material handling system package for NMDC’s 3MTPA steel plant at Nagarnar in Chhattisgarh on a turnkey basis. Since the project was due to be completed on February 28, 2014, there has been a delay of more than five years in the completion. The contract had then been signed between BHEL CMD B P Rao and then NMDC CMD Rana Som.

‘No headway despite continuous follow-ups’

“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 the commencement of the contract; the raw material handling system is far from completion stage,” the source said.