NTPC resolves Barh-I dispute with Technoprom - Russian Co finally agrees to complete work on 1,980 MW power plant within 36 months

The controversial Barh, phase-I power project of NTPC in Bihar is set to take off after years of delays. Russian equipment maker Technoprom Exports has finally agreed to complete work on the 1,980 mw power plant within 36 months. The Russian firm has already started basic engineering and civil work at the site and is expected to start putting up equipment after signing the agreement with NTPC later this year. 

NTPC started Barh, phase-1 in 1999 and placed order for supply of boiler to Technoprom in February 2005. The work on the project was, however, stalled after a contractual dispute between the two companies. The dispute has broadly been resolved after a strong diplomatic push from Russia . Talks are in final stages between NTPC and Technoprom over the order. 

“We hope to conclude the order (for supply of boiler) with Technoprom very soon as the firm has now agreed to our demand for a time bound completion of work on the project,” NTPC chairman and managing director R S Sharma told.

“There are no other changes in the terms and conditions of the earlier contract (reached in 2005) and we are not in any way discussing revision of the supply price of boilers,” he added. 

A team of senior officials from Technoprom was in Delhi couple of weeks back to discuss the supply arrangements. It is expected that a team from NTPC may also visit Russia soon to conclude the agreement. 

The project got stuck due to Technoprom’s insistence on increasing the original contract value for boilers due to sharp increase in price of inputs such as steel. While the contract value for supply of boilers was around 2,066 crore, Technoprom demanded an additional 1,700 crore, or about 90% increase in original price, which was unacceptable to NTPC. 

The government has now permitted NTPC to remove price variation ceiling of 20% in the original contract to factor in genuine price escalation. Power ministry sources said that even after removal of this ceiling, the actual supply may not work out to more than 30-40 % against 90% escalation earlier demanded by Technoprom. 

The conclusion of the deal would mean that the completion of the project by 2013 could be hurried up. Already the delays has pushed back NTPC’s plan to becoming a 50,000 mw company by 2012.