NMDC restores Rs 1,395-cr order to BHEL for setting up raw material handing system at steel plant

State-owned engineering firm BHEL on Monday said public sector miner NMDC has restored its order worth Rs 1,395 crore awarded to the former, to set up a raw material handling system at its steel plant in Nagarnar, Chhattisgarh.

In July, NMDC had sent a notice to terminate the contract awarded to BHEL for setting up the system. NMDC had given the contract to BHEL in 2011. BHEL was to complete the work till February 28, 2014.

"Subsequent to the discussions, NMDC has revoked the termination of the contract and restored the original contract on August 27, 2019," according to a BSE filing by BHEL.

A contract to set up the system at NMDC's under-construction integrated steel plant at Nagarnar in the Bastar district of Chhattisgarh is being executed by the BHEL-ISG Bengaluru division, according to the statement.

BHEL said that on July 15, it received a notice of termination issued on July 13 from NMDC for the contract.

The raw material handling system package was awarded to BHEL on August 1, 2011, at a cost of Rs 1,395 crore, with completion date of February 28, 2014.

BHEL was to set up the system on a turnkey basis.

The contract was signed in the presence of then BHEL Chairman and Managing Director B P Rao and then NMDC CMD Rana Som.

The project includes engineering, procurement and construction of complete RMHS, from receipt of various raw material (such as coal and iron ore) from wagon tippling to crushing.

The contract also included installation of a nearly 30-km conveyor.