SAIL terminates Rs 2,000-cr contract with Posco

State-owned Steel Authority of India (SAIL) has terminated a Rs 2,000-crore order given to a Posco unit for constructing a blast furnace at Bhilai Steel Plant, as the South Korean firm failed to sign contract despite several reminders.

Posco E&C last year won a bid to construct a blast furnace on EPC (Engineering, Procurement and Construction) turnkey basis for SAIL's Bhilai Steel Plant which is working to double its production capacity.

The subsidiary of steel behemoth Posco delayed the signing of the pact despite repeated reminders and thus SAIL's board on June 19 decided to terminate the offer.

Posoco E&C officials could not be contacted immediately.

SAIL will now go for retendering for the supply of the blast furnace to the Bhilai unit.

Confirming the development Steel Secretary P K Rastogi told PTI that "SAIL in a recent board meeting decided to cancel the offer made to Posco E&C for the construction of a blast furnace and supply of necessary equipment to the Bhilai Steel Plant (BSP). The company will float a new tender now".

Last year in February, the South Korean firm had said that it has won a $400 million (about Rs 2,000 crore) order to construct a blast furnace for BSP. The contract was a costly proposition for SAIL in the light of heavy correction in the equipment rates on account of the economic crisis, the secretary said.