BSP’s expansion plan delayed for another 15 months

The Dollar Business Bureau

The expansion process at Bhilai Steel Plant (BSP) has been delayed by 15 months. The BSP is one of the largest facilities of the state-run giant SAIL.

BSP’s expansion and modernization plant which needs an investment of Rs.17,266 crores, in order to raise the steel capacity to 7 million tonnes from 3.93 million tonnes per annum has been delayed, as SAIL has terminated its contracts twice due to “unsatisfactory performance.”

For production of high-quality long rails and bars, the flagship plant of the Maharatna firm is installing two rolling mills and is also phasing out the old and energy inefficient routes that it followed in order to reduce the cost of production and carbon footprint.

Initially, the project was planned to be completed by September 2015, but it was revised to October 2016 and then again to December 2016. This has resulted in a 15-month delay in the completion schedule.

For the steel melting shop package, BSP first hired Ratna Infra which was terminated due to its slow progress in work. Subsequently a fresh contract was provided to Hindustan Steel Works Construction(HSCL).

However, HSCL contracts too were terminated due to slow progress and the contract was then assigned to Simplex at the cost and risk of HSCL. This is one of the main reasons for the delay in the modernization and expansion program of BSP.

SAIL spokesperson said that change of contractors is due to unsatisfactory performance. He added that some facilities have been completed and efforts are being made to complete the balance facilities within the schedule.

SAIL is in the process of enhancing the production capacity of crude steel to 21.04 MTPA and hot metal to 23.46 MTPA under the current expansion and modernization plan, which is expected to be completed by 2016-17 fiscal.

The indicative investment is somewhere around Rs.61,870 crores and cumulative expenditure until December 2015 has been Rs.61,245 crores. This expenditure includes the expenditure of Rs.4,482.83 crores during the fiscal 2015-16 till December.