Reporter's Diary: Ennore expansion project caught in an endless loop
The engineering procurement construction (EPC) contract awarded to Lanco Infratech in 2014 was cancelled in 2018 after the company filed for corporate insolvency. It had completed only 18% of the work.
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CHENNAI: The Ennore Thermal Power Station Expansion Supercritical Project is back to square one. The 660 MW project should have commenced commercial generation in 2018 itself, if everything had happened according to the plan. But it seems to have stuck in an endless loop of mismanagement and poor decision-making.
The engineering procurement construction (EPC) contract awarded to Lanco Infratech in 2014 was cancelled in 2018 after the company filed for corporate insolvency. It had completed only 18% of the work.
Amid the apprehension raised by trade unions, Tangedco gave a letter of intent to BGR ESL for an EPC contract for the balance works in December 2019. But the utility cancelled the LOI in April 2021 for not paying the performance bank guarantee of 10% of the contract value. It also decided to shelve the project then, considering the anticipated very high levelised tariff due to the long delay and availability of cheaper renewable power.
However, Tangedco decided to reinstate the contract with a reduced BGR of 3% in November 2021 after the company filed a case in the Madras High Court which was withdrawn after the settlement. But BGR, which took over the project site in June last year, allegedly did not make much progress.
Now, Tangedco has issued a show-cause notice. And the board, which meets in September, is likely to take a call on whether to allow the BGR to continue the work or to cancel the contract itself.
Rumours abound that the expansion project might be shelved altogether, again.