Neyveli Lignite Corporation may consider slapping an additional penalty on Bharat Heavy Electricals Ltd for the delay and concomitant loss it suffered for the latter’s delay in construction of its 500-MW power plant at Neyveli.

The lignite (brown coal) miner is bitter on BHEL for the nearly 48-month delay suffered by the power project so far.

It is India’s first lignite-based power project using CFBC (circulated fluidised bed combustion) technology, which can open new avenues for utilising India’s vast lignite resources for power production in an environmental friendly manner.

BHEL is the engineering, procurement, construction contractor for three of the miner’s power projects — 500 MW at Neyveli, 2x500 MW at Tuticorin and 2x125 MW in Rajasthan.

Liquidated damages

“We have claimed the 7.5 per cent liquidated damages from BHEL as per the contractual obligations. We may consider claiming additional compensation for the 48-month delay of the project so far. We would have suffered a loss of about Rs 1,000 crore for the delay,” Surender Mohan, Chairman and Managing Director, told Business Line on the sidelines of a function here today.

The miner will be discussing with the Coal Ministry officials on how to proceed legally for additional compensation from BHEL.

Mohan is, however, hopeful that the power project could be commissioned before March, although it is “not an easy thing.” The basic flaw is in the boiler which is not being able to take the full load and is failing after it touched a load of 100 MW.

“There is a flaw with the basic design, which is now being changed,” he said.

Neyveli Lignite Corporation is also blaming BHEL for the delays in the other two of its power projects at Tuticorin and Rajasthan, while the power equipment supplier has been saying that the delay could not be attributed to it.

(This article was published on December 10, 2012)
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