JSPL slaps Rs 123 crore ‘liquidated damages’ notice on BHEL for project delays

Navin Jindal-promoted Jindal Steel and Power (JSPL) has slapped a Rs 123-crore notice on the state-run power equipment maker BHEL, citing delays in execution of projects at two units of JSPL’s 2,400 MW coal-based plant at Tamnar in Chhattisgarh. JSPL invoked the contractual clause titled ‘liquidated damages’. BHEL is executing the boiler, turbine and generator (BTG) packages for all the four units of the plant. While it commissioned the first and fourth units on schedule, there were delays of four and eight months respectively in case of the second and third units. The total contract value, with each BTG unit costing Rs 150 crore, is Rs 600 crore, which means if the JSPL’s claim is honoured, BHEL would lose 20% of the business. “We are examining the claim by the client (JSPL) and we would likely to ascertain if our estimates for liquidated damage varies from the client’s demand,” an official at BHEL told FE on condition of anonymity, adding that the PSU was willing to negotiate the matter with the power company. Another official at BHEL said that such claims often arise due to delays on the part of the client as well as other factors like delays in injection of full load power to the regional grid, a requirement for declaring a unit as commissioned. However, he admitted that BHEL has historically faced some problems in documenting delays due to reasons beyond its control. more at : http://www.financialexpress.com/article/industry/companies/jspl-slaps-rs-123-cr-notice-on-bhel-for-project-delays/227871/