NTPC to solve Technoprom pricing issue
NTPC has decided to exhaust all provisions in the contract with Technoprom Exports and Power Machines for solving the impasse over project cost escalation.
By Debjoy Sengupta, ET Bureau |
KOLKATA: NTPC has decided to exhaust all provisions in the contract with Technoprom Exports and Power Machines for solving the impasse over project cost escalation, before an empowered group of ministers (EGoM) is formed to look into the rise in project cost.
Since the Russian supplier ��� Technoprom Exports ��� has been demanding a rise in contract value in excess of 20 per cent on grounds of rise in steel prices and other raw material, work on NTPC���s Rs 8,700 crore, 1980 mw (3 x 660 mw) Barh-1 project remains suspended. ���For starters, NTPC will try to solve the impasse through an arbitrator as mentioned in the contract deed. If this fails, NTPC will try to enforce the joint deed of undertaking in case the main supplier does not supply the equipment,��� said a senior official.
���Even if these fail, it may also be followed by encashment of bank guarantee submitted by the equipment suppliers,��� the official said. An NTPC spokesperson declined to comment on the issue.
Technoprom was to supply boilers to the project, while turbines and generators was to be sourced from Power Machines. The project faced delay because the cost overrun component exceeded 20 per cent of the project cost. Earlier, the power ministry was trying to delink the contractual dispute ��� the project cost and the cost overrun portion ��� with project implementation. Earlier, the ministry, which had intervened to solve the issue, had asked them to start work on the project, while the excess cost portion would have been sorted out subsequently.
Since the Russian supplier ��� Technoprom Exports ��� has been demanding a rise in contract value in excess of 20 per cent on grounds of rise in steel prices and other raw material, work on NTPC���s Rs 8,700 crore, 1980 mw (3 x 660 mw) Barh-1 project remains suspended. ���For starters, NTPC will try to solve the impasse through an arbitrator as mentioned in the contract deed. If this fails, NTPC will try to enforce the joint deed of undertaking in case the main supplier does not supply the equipment,��� said a senior official.
���Even if these fail, it may also be followed by encashment of bank guarantee submitted by the equipment suppliers,��� the official said. An NTPC spokesperson declined to comment on the issue.
Technoprom was to supply boilers to the project, while turbines and generators was to be sourced from Power Machines. The project faced delay because the cost overrun component exceeded 20 per cent of the project cost. Earlier, the power ministry was trying to delink the contractual dispute ��� the project cost and the cost overrun portion ��� with project implementation. Earlier, the ministry, which had intervened to solve the issue, had asked them to start work on the project, while the excess cost portion would have been sorted out subsequently.
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