BHEL inks Rs 1,850 cr MoU with SAIL

Bharat Heavy Electricals Limited (BHEL) has signed a memorandum of understanding (MoU) with Steel Authority of India (SAIL) for supply of steel materials like flats and long products. The contract was signed at BHEL's Tiruchirappalli in Tamil Nadu which will source steel from SAIL for the entire BHEL. The value of the contract is estimated to be around Rs 1,850 crore.

According to company's release BHEL is projected to buy steel flats like plates and sheets and structurals like beams, channels and angles to the tune of around 6 lakh MT this financial year. The agreement paves way for enhancement of quantity, if required.

The approximate value of the annual purchase is around Rs1,850 crore and the cost per tonne varies according to the product.

As per the agreement, BHEL and SAIL will negotiate and arrive at a price every quarter. The projected quantity takes care of the requirement of the subcontractors of BHEL and the units forming part of Away Centre Fabrication BHEL is also eligible to claim a turnover discount of Rs 600 a metric ton at the end of the year for the total quantity bought by BHEL, said in the release.