NMDC issues termination notice to BHEL on steel plant contract

State-owned NMDC Ltd Thursday said it has issued termination of contract notice to BHEL for the Raw Material Handling System Package (Pkg-01) of the former's upcoming Steel plant at Nagarnar in Chhattisgarh, due to delay in completion of the project. According to a press release issued by the iron ore miner, the termination clause of the contract against BHEL was invoked as the contracting company was "lacking the intent to complete the project." The package cost was Rs 1395 crore and the original date of completion was February 28, 2014.

"It is noted that the work of M/s. BHEL is lagging inordinately and is lacking the intent to complete the project. M/s. BHEL is negligent towards the completion of the project.

Therefore, NMDC has taken a bold step by invoking the Termination clause of the contract against BHEL by giving notice to M/s. BHEL on June 26, 2019, for termination of the contract," NMDC said. The PSU alleged that despite continuous follow up from NMDC's end and the Ministry level, BHEL did not accelerate the progress of the project.

BHEL officials were not available for comments. NMDC said it would take steps for completion of the project through "new options for expeditious completion of the work."