NTPC scraps Thiess Minecs' Rs 23,000-cr mine development deal

Power producer NTPC has cancelled a Rs 23,000 crore contract with Thiess Minecs India due to delays in development and operation of the Pakri-Barwadih coal block.
"Thiess Minecs failed to make any headway despite the fact that development period of the contract was extended twice," state-owned NTPC said today in a statement.
Thiess Minecs was appointed mine developer and operator for NTPC's Pakri-Barwadih captive coal block in Jharkhand on November 30, 2010, after a global tender. The company wanted to start mining coal to reduce dependence on the market for the fuel.
The contract, valued at an estimated Rs 23,000 crore, was for a period of 27 years, the statement said, adding that the development period was 360 days ending November 25, 2011, with the remainder for operations.

Thiess Minecs is a 90 per cent subsidiary of Thiess Pty Ltd, Australia, which is a mining, construction and services contractor.
NTPC said the failure of the company was brought to the notice of Bruce Munro, Managing Director of Thiess Pty, on many occasions.

"NTPC issued a show-cause notice to Thiess Minecs on July 10, 2012, stating the defaults and non-fulfilment of contractual obligations by Thiess Minecs without any response," the statement added.
The company also said the matter was not taken very seriously by the Australian authorities.
"The top management of NTPC called on the Australian Minister for Mining during his visit to India and was appraised about total inaction by Thiess Minecs," it said.

The Ministry of Coal sought a bank guarantee of Rs 138.6 crore from NTPC after the poor progress of work at a scarce national asset, according to the statement.
NTPC said it terminated the contract on May 7, with a notice period of 45 days.
NTPC, which generates over 43,000 MW power, has been allotted seven coal blocks, including two to be developed through joint ventures.