The Tamil Nadu Generation and Distribution Corporation (Tangedco) has recovered around ₹1,000 crore from Lanco Infratech which was awarded the engineering, procurement and construction (EPC) contract for the 660-MW Ennore thermal power station expansion project. Lanco has gone into liquidation.
On August 27, the Hyderabad bench of National Company Law Tribunal (NCLT) ordered liquidation of Lanco, after its lenders could not find a suitable bidder for revival of the firm. The firm had claims of ₹45,263 crore from financial creditors and ₹5,389 crore from operational creditors against it.
In 2014, Tangedco awarded the EPC contract to Lanco for the ₹5,421 crore project. In 2017, Lanco went under insolvency proceedings and was identified by the Reserve Bank of India for resolution under the Insolvency and Bankruptcy Code.
“Under these circumstances, work in the project has been stalled from August 2017. Since there was no progress in the project, termination notice was issued to the EPC contractor on April 9,” according to a policy note of the State’s energy department.
A senior Tangedco official said the company had executed only 20% of the work and the liquidation process had resulted in the project getting delayed.
The project should have been completed by this year but considering the liquidation process of the company a new tender would be called for, he said.
“The project is set to be delayed by a minimum of three years. It will be completed by 2020-21,” the official said.
To a query on cost escalation, the official said the project is set for re-tendering and only when the bids are opened it would be known whether there is an increase in cost of the project.
However, he said that by invoking the bank guarantee, Tangedco recovered ₹1,000 crore, which would offset any cost overrun of the project.
According to sources, Tangedco claims would include damages for non-completion of the project. Tangedco’s name does not figure in the list of claimants against Lanco.
A Tangedco official said they are yet to decide about filing damages against the company.
