Delay in power line likely to affect IOCL Paradeep refinery schedule

The construction work for the 220 KV line from Paradeep Grid sub-station of the Orissa Power Transmission Corporation Limited (OPTCL) to the proposed petroleum refinery premises of the Indian Oil Corporation Ltd. (IOCL) is yet to start.

Though the work was awarded to a contractor way back in September 2008, selection of the electrical contractors not having the requisite experience has inordinately delayed the work.

Since the construction of the transmission line is vital for supply of power to the refinery project, the delay is likely to upset the schedule of commissioning the oil refinery which is slated for 2012. It may be noted, IOCL’s Paradeep project is already suffering from a time overrun of 7 years.

Sources said, IOCL invited two tenders, one for the construction of 220 KV line and the other for 220 KV bay extension work at Paradeep grid of OPTCL for getting power supply to the proposed refinery on 25 February 2008.

From among the bidders who submitted their bids, the Kolkata-based Everest Engineering House Private Ltd was declared as L-1 bidder and a local construction company M/s A K Das Associates was the L-2 bidder.

Since the construction of this line happened to be in coastal area which was badly hit in the 1999 super-cyclone, all the foundation had to be pile type, depending on the type of soil. This necessitated the contractor to have the experience and equipments for soil testing, designing the pile foundation, construction of pile foundation and proper workmanship.

The OPTCL had communicated this guideline to the IOCL authorities in October 2008 and had asked for the credential of the turnkey contractor. However, IOCL authorities are yet to provide the credentials of M/s Everest Engineering House Private Ltd. to OPTCL.

Besides, OPTCL had specified that the executing agency will have to obtain the EHV license from Electrical License Board of Orissa and the project license for execution of the project.

Meanwhile, when contacted on delay in laying the power line to the refinery site, D.K. Choudhury, general manager (projects), IOCL Paradeep refinery refused to comment on the issue. It may be noted, a consortium of 21 lenders led by the State Bank of India (SBI) committed a rupee term loan of Rs 14900 crores on 14 May 2009 to Indian Oil Corporation Ltd (IOC) for its 15 million tonne grassroots refinery project at Paradip. The project envisages a total outlay of Rs 33,504 crores, which is proposed to be funded by a combination of debt (rupee and foreign currency loans) and equity (internal accruals).The project is likely to be commissioned by early 2012 and implementation of the project is already in full swing.