Chennai-based public sector undertaking, Neyveli Lignite Corporation Limited (NLC), is contemplating seeking additional compensation from Bharat Heavy Electricals Limited (BHEL) for the loss it had incurred due to the latter's delay in the execution of its 500-Mw (2x250 Mw) power plant at Neyveli.
“As per the contractual obligations, we have already claimed 7.5 per cent liquidated damages from BHEL for the 48-month delay, because of which we had incurred a revenue loss of around Rs 1,000 crore. We are looking at claiming additional compensation, and are discussing with the officials of the Union Ministry of Coal on how to go ahead legally,” said Surender Mohan, chairman and managing director of NLC.
Mohan was speaking to Business Standard on the sidelines of the fourth international conference on ‘Corporate governance in emerging economies: Innovation, sustainability and challenges’ organised by the Institute of Public Enterprise here on Monday.
The lignite (brown coal) mining and power-generation company, which has a 2,490-Mw capacity at Neyveli, is using CFBC (circulating fluidised bed combustion) technology for the first time in India for its 500-Mw power plant. It expects the Rs 2,500-crore project to be commissioned by March 2013.
NLC is facing technical problems at the plant, especially with the boiler, which is not taking load beyond 100 Mw. Some design changes are to be made, and BHEL is currently attending these issues, Mohan said.
Divestment
On the government’s plans to divest 5 per cent stake in NLC and the concomitant opposition by worker unions and various political parties, Mohan said the company had already received a letter from the government to fast-track the process.
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The coal ministry, had in September, invited expression of interest from merchant bankers for divestment in NLC, to meet the regulatory requirement of 10 per cent public shareholding. NLC is the only listed Navratna company that does not meet the regulatory requirement of a minimum of 10 per cent public shareholding.
“We want to set some things right and create a positive atmosphere before going ahead. We are awaiting roughly Rs 4,200-crore dues to be cleared by various discoms. Also, we are waiting for the 500-Mw plant to be commissioned. Anytime after March 2013, we will proceed with the disinvestment plan. We are planning to offer employees (17,000) 200 share each at a discount to motivate them to accept the divestment plan, which will bring us Rs 650-700 crore,” he added.
Stating that the company was setting up a 3x660 Mw plant at Kanpur in Uttar Pradesh, entailing an investment of Rs 14,858 crore, Mohan said the company had formed a 51:49 joint venture company — Neyveli Uttar Pradesh Power Limited — with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited.
“An amount of Rs 150 crore has already been paid to the government for land acquisition. We have applied for allotment of coal blocks there, and expect the same in the next two months,” he said, adding the company currently had lignite mining capacity of 30.5 million tonne per annum (mtpa), and was planning to start excavation in three open-cast mines in Neyveli and Rajasthan that would add 7.5 mtpa to the existing capacities in the next two to three years.