New Delhi: NTPC, the largest power generator in the country, is learnt to have started preparations for inviting a second round of international bidding for supply of equipment to its Barh-1 project. This follows the Central Bureau of Inverstigation's allegation that the existing contract holder, Russian firm Technopromoexport (TPE), had given kickbacks of as much as Rs 100 crore to get the contact.
"We are looking for an alternative to speed up our project. We have asked for government's advice on issuing the new contract as our project is already delayed by 2 years," a senior NTPC official told DNA Money, requesting anonymity. The company board has already approved cancellation of the contract, the official said.
Sources said the contract could now be given to state-owned Bharat Heavy Electricals (Bhel) since it is already working on phase-2 of the Barh project. However, Bhel is already under pressure to meet its existing capacity addition target of 15,000 mw by December this year from 10,000 mw now.
NTPC had placed orders with Russia's TPE, earlier known as Federal Unitary Enterprise, for supply of boiler to the Barh-I project on March 14, 2005. Subsequently, the Russian government, through a decree, raised its share in TPE to 100%. That led to a change in its name.
NTPC held back payment to the Russian vendor on suspicion that the decree had changed the legal status of the vendor. This led to suspension of work on the project by TPE. Finally, NTPC ascertained through "due diligence" that there was no substantive change in the contractor's status. However, then TPE claimed cost escalation of 87%, even though under contractual terms NTPC is liable to bear only up to 20% of the escalation in cost.
The first unit of Barh-1 was to be commissioned by January 2009, but the project is running two years behind schedule. The project accounts for 9% of NTPC's 11th plan capacity addition target. With the contract having to be re-awarded, the PSU appears set to miss the implementation target.


