The Chairmen and Managing Directors of Neyveli Lignite Corporation and Bharat Heavy Electricals Ltd, Mr A.R. Ansari and Mr B.P. Rao, met today at Tuticorin, Tamil Nadu, to discuss the pain points in the projects that BHEL is putting up for NLC.

BHEL is the engineering, procurement, construction (EPC) contractor for three of NLC's projects – two units of 125 MW at Barsingsar, Rajasthan, two units of 250 MW at Neyveli, Tamil Nadu and two units of 500 MW each at Tuticorin.

The irritants

While the first two projects have suffered 30 months' delay, the third is behind schedule by 18 months.

NLC has publicly blamed BHEL for the delay, while BHEL has been saying the delays are not attributable to it. At Rajasthan, the problem is rather vexing, where the quality of lignite mined is vastly different than the sample given to BHEL for the purpose of designing the boilers.

While BHEL has said that it could “legally walk out of the contract”, NLC feels that the fuel quality variance is within the contracted range and it is up to BHEL to deliver the equipment.

Common ground

Today, Mr Ansari said that it was agreed today that BHEL would be allowed to do some “R&D” – mix ‘red sand' (to prevent coking of lignite). The plans could go on stream by the middle of next month.

As regards the other two projects, Mr Ansari said that Mr Rao had assured him that the projects would be expedited. While the first of the units at Neyveli would start generating electricity next month, the other would do so by the end of the year. This is good news for the power-starved Tamil Nadu.

The first of the Tuticorin projects would start producing power in September next year, and the second, in January 2013, Mr Ansari said.

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