Govt approves 'price escalation clause' for power projects
The government has approved compensation for power equipment supplier BHEL for taking a hit due to abnormal rise in prices of inputs for power projects, a move that would help execution of projects without delays.
By PTI |
NEW DELHI : The government has approved compensation for power equipment supplier BHEL for taking a hit due to abnormal rise in prices of inputs for power projects, a move that would help execution of projects without delays.
"BHEL and its all sub-contractors in all future contracts will incorporate a price variation clause," ministry sources said, adding this would enable the state-run power equipment company to increase the cost of the project depending on the price escalation of various inputs.
Sources said, "Apart from dealing with the new contracts for power projects, the contractors of ongoing power projects would also be compensated."
For the ongoing projects a committee of technical and financial heads of the project will make recommendations on price increase due to abnormal rise in prices of raw material, components and other factors. This will be approved by a senior level committee of BHEL officers.
Sources said, "While monitoring the execution of power projects in the country recently, it was observed by the Central Electricity Authority (CEA) that these have been delayed due to abnormal increase in prices of inputs such as cement and steel during the period of contract executions."
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Earlier CEA had recommended the incorporation of suitable price variation clause taking into account the price of various inputs used in a contract. During the XI plan period, Government is aiming to add power generation capacity of around 78,000 MW in the country.
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