Reasons for delay of Stalled Projects: 400kV D/C Wardha –Aurangabad TL

(upgradable to 1200kV S/C)

1. Investment Approval of the Projects:

As per Investment approval dated 15.10.2008, the commissioning schedule of the project was 48
months from date of investment approval i.e. upto September’2012. Copy enclosed as Annex-I.

This was further revised/extended till Feb’2018 vide Revised Implementation Schedule dated
29.03.2017. Copy enclosed as Annex-II.

2. Physical Progress and Financial Progress of the Projects since inception:

Physical Progress:
 400kV D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C)

Activity Total / Scope Completed till Balance

date
Foundation(Nos) 980 979 01
Erection(Nos) 980 968 12
Stringing(kM) 350 270 80

 2 no. 80 MVAR Line Reactors at Wardha (1200 KV Wardha-Aurangabad Line):

Ready: Shall be commissioned matching with line.

 FSC at Wardha for 400kV D/C Wardha- Aurangabad Line: Ready: Shall be
commissioned matching with line.

Financial Progress:

Capex
Estimated Upto Expenditure
ELEMENT NAME upto
cost March'18 2018-19
Mar'19
400KV D/C Wardha - Aurangabad line 1041.77 961.84 24.57 986.41
(up-gradation 1200KV S/C)
40% Fixed Series Compensation on Wardha 78.80 74.17 0.25 74.42
- Aurangabad 400KV D/C line.
400/220 KV Aurangabad S/Stn. & Extn. at 171.12 164.46 1.89 166.35
400KV Wardha & Aurangabad (MSETCL)
S/stn.
1291.69 1200.47 26.71 1227.18
3. Reasons attributed for delaying the projects:

There is delay in completion of balance works for commissioning of 400kV D/C Transmission
Line (upgradable to 1200kV S/C) due to following reasons. The construction of 400kV D/C
Wardha –Aurangabad TL (upgradable to 1200kV S/C) is carrying out in 2 parts:
A. Pkg D1- 400kV D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C)-Part 1- M/s
MCPL & Aster: - Due to poor performance of M/s Aster, Notice of default has been issued
to M/s MCPL & Aster vide letter dated 06.05.14 (Ann 2b). The tender has been terminated
vide letter dated 20.05.14 and contract re-awarded in 2 packages to M/s KEC and M/s
Gammon. The construction work against package-I and II awarded on M/s KEC and M/s
Gammon have been completed.

B. Pkg D2- 400kV D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C)-Part 2- M/s
MCPL & BS Transcom :- There is delay in construction progress in D-2 package of 400kV
D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C) awarded on M/s BS Limited
due to following reasons:-

i. This project was awarded seven years back, initially M/s BS Limited could not perform
due to exit of SPIC-SMP JV Partner from the contract on account of business transfer.
New JV partner M/s Mirrador could not support the contract funding. In spite of
financial constraints and after termination of the contract, M/s BS Limited took lead to
revive the project and entered into Supplementary Agreement with POWERGRID. M/s
BS carried out further progress after Supplementary Agreement from Feb’16 and
carried out 40 nos of foundations, 169 Nos of erections and 54 kms of stringing.
However, due to their poor financial condition, they have shown their inability to
further funding of the project. In case, POWERGRID terminates the existing contract,
it will take appreciable time to re-tender the package. Further, there is a likely
possibility of escalation in the execution cost as the leftover works are mostly scattered
in different locations of the line and new contractor may add on extra cost on account
of this.

ii. After supplementary agreement, M/s BS Limited endeavored to complete the project
works but could not complete the same due to various reasons i.e. severe ROW issues,
public agitations, Water crisis in Aurangabad district etc. and some of the reasons are
attributable to M/s BS for not completing the balance works.

iii. All out efforts have been made by WR-I for completion of balance works in Pkg D2-
400kV D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C. But due to
unforeseen conditions and issues mentioned above, balance works in Pkg D2- 400kV
D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C could not be completed.

iv. Now, M/s BS has placed order on M/s Transrail for completion of balance works in
Pkg D2- 400kV D/C Wardha –Aurangabad TL (upgradable to 1200kV S/C). The same
is under progress and line is expected to be completed by Dec.’19.
4. Management Note on viability of the projects:
Relevant section of Feasibility report Enclosed in Annex-III.

5. Rationale behind capitalizing IDC (Interest During Construction) and Incidental

Expenditure During Construction (IEDC):

Accumulated IDC/IEDC till the time of DOCO will be considered at the time of petition filing
with CERC. The decision regarding condoning of delay and allowing IDC/IEDC shall be given
by CERC at the time of final hearing

6. Communications with Regional Power Committees / Minutes of Meetings of Regional

Power Committees:
Copy of Minutes of the 26th meeting of the Standing Committee on Power System
Planning of Western Region held on 23rd February, 2007 at WRPC, Mumbai is enclosed in Annex-
V

7. Communications with Vendors of the Projects:

Copy of Record notes of discussion & Minutes of meeting with vendor BS Transcom is enclosed
in Annex-IV.

8. Communications with Beneficiaries:

Copies of various Minutes of Transmission scheme progress Review Meeting (TRM) is enclosed
in List,, where all the beneficiaries are generally participants during such meetings.
MOMs enclosed in Annex-VI.

S.N. MOM Relevant Page.

1 17th April, 2018 at WRPC, Mumbai Page- 6 &7
2 9th October, 2017 at WRPC, Mumbai Page- 5
3 21st August. 2017 at WRPC, Mumbai Page- 5

9. Estimated time to complete the projects:

Project is targeted for completion by December’2019.

10. Impairment testing of the projects (Since there is huge cost overrun and time overrun):
Impairment testing is not warranted in our opinion till the date of DOCO.