| |
| Cancelling the allotment to China Machinery and Exporting Corporation (CMEC), the lowest bidder which has refused to agree to the Deferred Payment Guarantee (DPG) format proposed by it, APGenco, the state power utility, has awarded the revised EPC contract of the Rayalaseema Thermal Power Project ( RTPP stage-2) works to the second lowest bidder, Bharat Heavy Electricals Limited (BHEL).
|
| |
| BHEL has indicated that it will complete the project in 30-33 months as against the 34-37 months time-frame fixed by the original bidder, CMEC.
|
| |
| Civil works, coal and ash plant have been excluded in the revised offer as BHEL sought these changes, citing the fact that these works are outside its manufacturing range.
|
| |
| The project cost is estimated to be around Rs 1,600 crore. The total installed capacity of APGenco will touch 10,800 mw on completion of the project in 2006.
|
| |
| APGenco is also of the opinion that the civil works, coal and ash plant works, which will be directly taken up by it, will yield some more savings for it.
|
| |
| The proposed 420 mw RTPP second stage(2X210 mw) at Muddanur in Cudappah district could not be grounded as per the schedule as problems cropped up at the last minute.
|
| |
| Earlier, the EPC contract was awarded to CMEC, the successful bidder, which had offered to arrange the entire capital expenditure on its own.
|
| |
| But after the formalities were completed with the Power Finance Corporation (PFC) as the guarantor for the monthly installments covering the suppliers credit, CMEC rejected the DPG proposals put forward by the APGenco.
|
| |
| After the final talks had failed in September 2003, APGenco asked the CMEC to extend its concurrence by October-end, stating that it would go for an alternative if the Chinese company failed to do so.
|
| |
| While the DPG intended to cover the monthly installments repayable by the APGenco as per the provisions of the EPC contract, the CMEC wanted that the payment of monthly installments should proceed independent of the contract, and progress and performance of the project, which were scheduled to start from the 42nd month after the contract was signed.
|
| |
| CMEC's view was that the guarantee for payment was irrevocable and unconditional with no linkage to the contract.
|
| |
| This was unacceptable to APGenco. The power utility believed that the CMEC's stance was contrary to the basic tenets of the Indian contract law.
|
| |
| Under these circumstances, APGenco recently invited the second lowest bidder, BHEL, for discussions. The latter agreed to take up the erection of the units with some changes in the original package of works.
|
| |
| Their offer was reviewed at length and negotiations were held at the level of directors of APGenco before the final decision was taken. |
| |
|
| |
