Lurgi, L & T Bag Haldia Contracts

Haldia Petrochemicals Ltd, the Rs 5,170-crore mega petrochem project coming up at Haldia, West Bengal, has selected German engineering major Lurgi as the engineering, procurement and construction (EPC) contractors for its associated units.

Larsen and Toubro, the engineering giant, has been awarded the Rs 400-crore captive power plant to be built on a build-own-operate basis. Sources said these deals were finalised at the end of last month.

The associated units are not downstream projects in the strictest sense of the term, but are peripheral to the mother naphtha cracker plant as they constitute handling those portions of the chemical that do not contain any monomer.

 

Lurgi was the lowest bidder for the associated units and was in the race for the contract with L&T-Chiyoda, a joint venture between Larsen and Toubro and the Japan-based Chiyoda.

Tata Power lost out to Larsen and Toubro for the captive power project. Bechtel Inc of the US were the management consultants for the project.

The cost of the 100-mw power plant has been kept out of the overall project as also the Rs 50-crore nitrogen plant, which will be executed by Praxair.

The project, which is racing against time to fulfil a 24-month gestation period and is competing with a similar project on the western coast promoted by Reliance, had briefly come under cloud after an influential lobby in the state expressed reservations about awarding the contract to Daelim, a South Korean company for the polypropylene and high density propylene units.

According to a state government official: "The Daelim offer had been scrutinised by management consultants Bechtel and being the lowest bidder, it was passed."

It is understood that the other bidders for the contract, namely Technimont of Italy and Mitsui of Japan, had huge overhead costs which substantially raised the value of their bids.

The Rs 5,170-crore Haldia Petrochemical project is a joint venture between the West Bengal Industrial Development Corporation, the Chatterjee-Soros Fund and the Tatas having equity in the ratio of 3:3:1.

Toyo Corporation of Japan, the main project contractors for the mother naphtha cracker plant, have commenced work at the project site earlier this year.