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Apgenco shuns Chinese co; places Rs 1100 crore order with BHEL
New Delhi, Dec 07: Andhra Pradesh Power Generation Co (Apgenco) has developed differences with CMEC of China over deferred payment guarantee clause and has invited Bhel, the second lowest bidder, for supply and erection work at Rayalaseema Thermal Power Project Stage II comprising two units of 210 mw each.
New Delhi, Dec 07: Andhra Pradesh Power Generation Co (Apgenco) has developed differences with CMEC of China over deferred payment guarantee clause and has invited Bhel, the second lowest bidder, for supply and erection work at Rayalaseema Thermal Power Project Stage II comprising two units of 210 mw each.
The contract to Bhel is worth Rs 1100 crore while the Stage II project of Rayalaseema Power Project would cost Rs 1,800 crore, Apgenco said.
When contacted Bhel sources confirmed that supply and erection work of the project has been awarded to them and they indicated that the project would be completed within 30 to 33 months as against CMEC's time period of up to 37 months.
Earlier the engineering, procurement and construction (EPC) contract for this was awarded to CMEC of China. All formalities were fulfilled except DPG.
Differences arose on the DPG format to be given by Power Finance Corporation (PFC) as a guarantor for the monthly installment payments covering supplier's credit, Apgenco said. DPG was intended to cover the monthly payments repayable by Apgenco in accordance with the provisions of the EPC contract.
However, CMEC wanted that monthly payments should proceed independent of the contract and progress and performance of the project under the contract.
The Chinese view was that guarantee for payments is irrevocable and unconditional with no linkage to the contract which is contrary to the basics of Indian Contract Law and was totally unacceptable, it added.
When contacted Bhel sources confirmed that supply and erection work of the project has been awarded to them and they indicated that the project would be completed within 30 to 33 months as against CMEC's time period of up to 37 months.
Earlier the engineering, procurement and construction (EPC) contract for this was awarded to CMEC of China. All formalities were fulfilled except DPG.
Differences arose on the DPG format to be given by Power Finance Corporation (PFC) as a guarantor for the monthly installment payments covering supplier's credit, Apgenco said. DPG was intended to cover the monthly payments repayable by Apgenco in accordance with the provisions of the EPC contract.
However, CMEC wanted that monthly payments should proceed independent of the contract and progress and performance of the project under the contract.
The Chinese view was that guarantee for payments is irrevocable and unconditional with no linkage to the contract which is contrary to the basics of Indian Contract Law and was totally unacceptable, it added.
Bureau Report