BHEL has bagged an order worth Rs 5,400 crore from Bharat Coal Gasification and Chemicals Limited (BCGCL) for the company’s coal gasification plant in Odisha.
BHEL: Project key details
BCGCL, a joint venture between BHEL and Coal India (CIL), has awarded BHEL an order for design, engineering, supply of equipment, civil works, erection, commissioning, and operation & maintenance (O&M) of the company’s coal gasification and raw syngas cleaning plant (LSTK 1 Package).
The contract is for BCGCL’s coal-to-2,000 tonnes per day ammonium nitrate project at Lakhanpur, Jharsuguda district, Odisha. The contract is domestic in nature and stands at a value of Rs 5,400 crore, exclusive of GST.
As per the contract’s terms and conditions, the preliminary acceptance, which includes commissioning and performance guarantee tests, will be executed within 42 months. The operations and maintenance (O&M) services will be provided for 60 months from the date of preliminary acceptance, the company said in its statement.
The order includes party-related transactions, as BHEL is one of the promoter companies of BCGCL. The transactions are conducted at arm’s length, the company added.
BHEL shares fall 10% on reports of easing China curbs
While the PSU secured a significant order, its shares plunged by over 10% in late trade amid emerging reports that the Indian government is planning to ease restrictions on Chinese bidders. According to a report published by Reuters, India’s finance ministry plans to scrap five-year-old restrictions on Chinese bidders, which would make them eligible to bid for government contracts.
Currently, Chinese companies face tight restrictions when bidding for government contracts. To win these contracts, companies are required to register with an Indian government committee and obtain political and security clearances.
BHEL was not the only company to be affected, with share prices of other PSUs like SAIL and NTPC also seeing a decline.
BHEL: Share price
The company’s share price on Wednesday at Rs 276.9, down nearly 9% from its previous close. Over the past month, the company’s stock has delivered a return of nearly 3%.