NMDC terminates contract with BHEL for delay in Rs 1,395 cr project

The National Mineral Development Corporation (NMDC) has invoked termination clause against Bharat Heavy Electricals Limited (BHEL) for failing to complete a contract awarded for its Nagarnar steel project in Chhattisgarh’s Bastar district.

The state-run miner is setting up a 3 million tonne per annum (mtpa) greenfield integrated steel plant in Nagarnar -- about 16 kms from Bastar’s divisional headquarters at Jagdalpur. The project is part of NMDC’s diversification, value addition and forward integration programme.

The company plans to feed raw material to the plant from its iron-ore complexes located in Bastar division. NMDC manages two fully mechanised mines with a capacity of 25 mtpa in Dantewada district of Bastar.

The Nagarnar steel plan was conceived by the NMDC in 2009-10 and the contract to build raw material handling system was awarded to BHEL on August 1, 2011. The estimated cost of the project was Rs 1,395 crore and was stipulated to be completed by February 28, 2014.

The state-run engineering enterprise failed to expedite the contract. Even after continuous follow up at corporation and ministry level, BHEL did not accelerate the progress of the project, resulting in a delay of over five years.

Even after the huge delay, the project is far from completion. BHEL officials could not be contacted for comments.

NMDC Chairman-cum-Managing Director N Baijendra Kumar told Business Standard that the company had invoked the termination clause against BHEL by serving notice on June 25, 2019. The company will take steps for completion of the project through new route, he added.