Contract dispute to further delay 410 MW Rampur hydropower project.

SJVN's misinterpretetion of a contract clause would likely further delay civil works for the 410 MW Rampur hydro electric project.

Although the contract clearly states that the payment must be made within 56 days of submission of bill by the agency, contractors claim that SJVN has erroneously determined of the `payment of running bills` clause stipulated in the contract that the due amount should be paid on the 56th day and not any time before.

Contractors allege that by delaying payments to the very last day, SJVN makes a tidy income in the form of interest receipts. SJVN  puts the the loan amount drawn from the World Bank - the financier for the project - in short duration fixed deposits, thereby delaying payments to construction agencies in the process.

To add to the contractors` woes, SJVN is yet to make a decision regarding payment of retention money, amounting to 10%, out of every RA bill to the said agencies.

Contractors threaten that any further continuation of actions such as failure to abide by the contract might have dire consequences. Some of the aggrieved contractors could halt or delay the completion of the remaining construction activities, unless SJVN makes efforts to ease their cash flow problems.

To save the hydel project from any further slippage beyond January 2013, which is already a 20 month delay against the original commissioning date of August 2011, SJVN has decided to provide part payment to BHEL for all erection activities undertaken till date.

To note, the Rampur HEP envisages diversion of water from the out-fall arrangement of the existing Nathpa Jhakri HEP of SJVNL, through a 15.08 km long head-race-tunnel with a diameter of 10.5 m. Based on a 95% machine availability and a 90% dependable year, the project is likely to afford an annual energy generation of 1,770 Gwh.