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NTPC terminates coal mining contract with BGR over allegations of corruption

Date: July 10, 2019
NTPC, India’s largest electricity producer, has terminated contracts it had awarded to BGR Mining & Infra Ltd for development of its coal mines in Jharkhand and Chhattisgarh over allegations of corruption against senior officials of the private mining company.

NTPC has terminated contracts for development and operation of Chatti-Bariatu coal mine in Jharkhand and Talaipalli coal mine in Chhattisgarh, according to two separate letters dated July 4, 2019 sent by the state-owned company. An e-mail sent for comments to BGR Mining on the address for media queries mentioned on its website did not elicit a response. Calls made to its senior director I Sudhakara Reddy too went unanswered.

The state-owned firm had awarded mine and development contract of the Chatti-Bariatu mine to BGR in November 2017. In the same month, it had awarded a similar contract for the Talaipalli mine to a consortium of NCC Ltd and BGR Mining. Chatti-Bariatu mine was supposed to produce 7 million tonne of coal a year for use at NTPC’s 1,320 MW Barh power plant for generation of electricity. Talaipalli coal mine was to produce 18 million tonne of coal per annum for use at NTPC’s 4,000 MW Lara Power Project.

NTPC said it is through the letter intimating BGR of its decision to terminate the project agreement. “Accordingly, the Project Agreement shall stand terminated on the expiry of the notice period of 45 days from the date of this letter, i.e July 4, 2019. This letter is without prejudice to NTPC’s other rights, which NPTC is entitled to under the Project Agreement and/or under any applicable law.”

It asked BGR to give it a notice of at least 72 hours prior to taking any legal action against NTPC and to refrain from obtaining any orders against the company without disclosing the entire termination letter to such judicial forum and/or authority.

NCC held 51 per cent interest in the special purpose vehicle it created for Talaipalli coal mine operation. BGR was to hold the remaining 49 per cent. The value of the project was estimated to be Rs 25,071 crore to be executed over 25 years.

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