5/22/2019 Gmail - BSP 7.0 MT MODEX- Issues related to Extra Claim of Water Supply packages (Pkg-078A and 077-02A).

mecon bhilai <meconbhilai@gmail.com>

BSP 7.0 MT MODEX- Issues related to Extra Claim of Water Supply packages (Pkg-078A and
077-02A).
projsailbsp <projsailbsp@meconlimited.co.in> Fri, May 17, 2019 at 3:09 PM
To: "ashok_kumar@sail-bhilaisteel.com" <ashok_kumar@sail-bhilaisteel.com>, "dkpouriya@sail-bhilaisteel.com" <dkpouriya@sail-
bhilaisteel.com>
Cc: "skmehta@sail-bhilaisteel.com" <skmehta@sail-bhilaisteel.com>, "anupamswaroop@sail-bhilaisteel.com" <anupamswaroop@sail-
bhilaisteel.com>, "jmpalaiya@sail-bhilaisteel.com" <jmpalaiya@sail-bhilaisteel.com>, G S Wadhwa <gswadhwa@sail-bhilaisteel.com>, edp
<ed_proj@sail-bhilaisteel.com>, mecon bhilai <meconbhilai@gmail.com>, gmbhilai <gmbhilai@meconlimited.co.in>, NK Garg
<nkgarg@meconlimited.co.in>, VK Jha <vinayjha@meconlimited.co.in>, GK Ghosh <gautamghosh@meconlimited.co.in>, Devendra
Sharma <devendrasharma@meconlimited.co.in>, pktewari <pktewari@meconlimited.co.in>, bibhakarjha
<bibhakarjha@meconlimited.co.in>

Ref. No. : MEC/11/Q4/9101/078A & 077-02A May 17, 2019

To
Shri Ashok Kumar,
DGM I/c (P-Utility)
Bhilai Steel Plant-SAIL
Bhilai (C.G.)

Sub: BSP 7.0 MT MODEX- Issues related to Extra Claim of Water Supply packages (Pkg-078A and 077-02A).

Ref:
i) MBE’s email dt. 27.09.2013(copy attached)
ii) IC No.-11.20.9101.02606.IC.01 dt.28.09.2013 (copy attached)
iii) BSP’s email dt. 28.01.19 & 12.02.19
iv) Minutes of meeting amongst BSP, TPL & MECON Bhilai on 01-02-2019 at Bhilai (copy attached)
v) BSP’s email dt. 26.02.19 & 07.03.19 asking for Cost Estimates
vi) Record notes of discussion chaired by ED(P) on 18.04.19(copy attached)

Dear Sir,

With reference to the above and please refer to trailing dt. 12.02.19 and your email dt. 26.02.19 regarding the mismatch in 6.6 KV & 11
KV, 1 MVA transformers supplied at site by erstwhile contractor M/s MBE. In this regard following may please be noted.

i) Regarding the discrepancy in 16 nos. of 1MVA transformer connecting flange of LV side bus duct, please note that instead of
1500 amp rated neutral bushing as per approved drawings of 1MVA transformer (copy attached), M/s MBE /Voltap Transformers Ltd.
(vendor of M/s MBE) had supplied 2000 amp rated neutral bushing. This issue was pointed out during the inspection by MECON’s
inspector that the rating of bushing is not matching with approved drawings. Accordingly, M/s MBE had given an undertaking that higher
size bushing is being provided due to non-availability of 1500 amp rated bushing. Further, M/s MBE vide email dt. 27.09.13 to MECON
copy to BSP confirmed that the change in the dimension w.r.t provision of higher rating neutral bushing shall be taken care of by them
during order placement of bus duct & bus duct will be finalised in line with this change.

ii) As is the practice, for turnkey package contractor who is responsible for the complete package on their confirmation, for this type
of changes observed during inspection of equipment, based on their undertaking, equipments are cleared during inspection. Similarly, in
this case also, based on the undertaking furnished by erstwhile contractor M/s MBE & in view of the requirement of these transformers
at site for commissioning and various request by BSP for expediting the inspection, inspection certificate (IC) was issued by MECON on
28.09.2013. However, M/s MBE the erstwhile contractor never took concurrence / intimated about this change by way of submitting
revised drawing with provision of 2000 amp rated neutral bushing for 1 MVA transformer to MECON.

iii) As is known to all stakeholders, because of the enormous delay of the subject package 077-02 by M/s MBE and after around
lapse of 3 years of dispatch of these transformers to site, BSP Bhilai decided to issue RPN to M/s MBE. It may be appreciated that
when RPN was issued approx. 65% & 59% of basic & detailed engineering respectively were completed by M/s MBE.

https://mail.google.com/mail/u/0?ik=a91ea0aac8&view=pt&search=all&permmsgid=msg-f%3A1633771600868865942&simpl=msg-f%3A16337716008… 1/4
5/22/2019 Gmail - BSP 7.0 MT MODEX- Issues related to Extra Claim of Water Supply packages (Pkg-078A and 077-02A).
iv) As per the high powered committee's decision, it was decided that the package no. 077-02 shall be divided into several
packages comprising of single tender package, NTK contract of civil & structural, item rate contract on STE basis, NTK mode on LTE
basis & LSTK package for balance works later known as package no. 077-02A.

v) Accordingly, as per the decision of high powered committee, and communicated by BSP at that time in the year 2016, the
technical specification for this LSTK package no. 077-02A was prepared jointly by MECON & BSP in a very tight schedule in view of the
failure of all the three erstwhile contractors of packages 077-01A, 077-02 and 078, during which MECON design engineers was deputed
at BSP, Bhilai for months together. All the issues w.r.t scope of work of different packages were discussed threadbare amongst
concerned engineers of MECON & WMD BSP and Project Utility department of BSP, and other concerned department of BSP, at Bhilai
only as per the requirement of BSP. After prolonged discussion amongst all the stakeholders viz MECON and BSP, the Technical
Specification was finalised on fast track basis & the award of this package no. 077-02A was completed in an expeditious manner in view
of the urgency of commissioning of URM & BRM.

vi) It may further be noted that the said equipment was supplied by the erstwhile contractor M/s MBE which was free issue item for
the present contractor of package no. 077-02A, M/s TPL. MECON was informed about the list of free issue items including 1MVA
transformers which were kept in BSP store and advised to include these items as free issue to the LSTK Specification of package no.
077-02A. While forwarding the list of free issue item by BSP to MECON after its inspection in the BSP' store, BSP never intimated about
the subject mismatch to MECON while list of free issue item were handed over to MECON. Had it been intimated to us at that time, the
same could had been addressed in the Technical Specification when it was getting finalised.

By bringing to your kind attention to the above mentioned facts prevailing in the year 2016, it is not our intention to shrug off our
responsibility as the consultant for BSP modernisation, we would definitely would submit to BSP to appreciate, that, in a mammoth
exercise like this, there was total crisis because of RPN of the three water packages, the original packages were split into several
packages (totaling to more than 45 packages) and all the small NTK packages as well as the three TK water packages were being
tendered and finalised concurrently, detail engineering was being done by MECON for NTK packages by deputing team of engineers to
Bhilai. Hence, when lot of deliverables are scheduled concurrently and concomitantly, there are every chances of some miss at various
stages, as has happened in this case also.

On the issue we would also like to bring to attention of BSP the following:

i) The CTS cl. no. 08.03.01, page no. 122 of 412 states that “For the free issue items, the scope of work of Contractor includes
visual inspection at BSP store ----“,. Hence, as such it is the prime responsibility of the contractor M/s TPL to inspect the transformers at
site store jointly with BSP prior to ordering the bus duct, which they have failed and this type of discrepancy could have been avoided.

ii) The CTS cl. no. 11.10, page no. 294 of 412 states that “Modification, if required with respect to approved P&IDs of CTS, will be
executed by contractor with commercial implication with mutually agreed terms and condition”. BSP may decide the methodology of
execution the job.

Hence, as per the above mentioned two CTS clauses (CTS pages attached for ready reference), MECON opines that for the required
modification is to be carried out by M/s TPL without any commercial implication as they have not complied to CTS cl. no. 08.03.01.

BSP is advised to instruct M/s TPL to carry out the modification without any commercial implication. If M/s TPL is not agreeing for the
same, in the interest of the project the same may please be done at cost of M/s TPL through some other agency. The cost towards the
subject modification is being sent separately in sealed envelope to BSP for their needful.

Regarding, BSP’s observation conveyed vide email message dtd. 12.02.2019 that this has directly evolved due to discrepancy in
approved drawings under 77-02/77-02A, and it is BSP's considered opinion that any financial implication/extra claim by party shall be
recovered from MECON is not correct, hence not acceptable to MECON as has been explained in detail above.

Regarding the issue raised for package 078 we shall be replying to BSP separately.

This is further necessary action at your end.

Thanking You,

For MECON Limited

A.Sudharsan,
SDE (Proj. SAIL-BSP)

=============================================================================

-------- Forwarded Message --------

Subject:Extra Claims under PKG 78A & 77-02A

Date:Tue, 12 Feb 2019 10:27:53 +0530
From:ashok kumar <ashok_kumar@sail-bhilaisteel.com>
To:projsailbsp@mecon.co.in
CC:vinayjha@mecon.co.in, NK Garg <nkgarg@mecon.co.in>, pcc_tkey_bsp@sail-bhilaisteel.com, rkpanigrahi <rkpanigrahi@sail-
bhilaisteel.com>, meconbhilai@gmail.com, gmbhilai@mecon.co.in, ed_proj@sail-bhilaisteel.com, skmehta@sail-

https://mail.google.com/mail/u/0?ik=a91ea0aac8&view=pt&search=all&permmsgid=msg-f%3A1633771600868865942&simpl=msg-f%3A16337716008… 2/4
5/22/2019 Gmail - BSP 7.0 MT MODEX- Issues related to Extra Claim of Water Supply packages (Pkg-078A and 077-02A).
bhilaisteel.com, dkpouriya@sail-bhilaisteel.com, anupamswaroop@sail-bhilaisteel.com, gswadhwa@sail-bhilaisteel.com,
jmpalaiya@sail-bhilaisteel.com <jmpalaiya@sailbhilaisteel.com>

Sub: Extra Claims under PKG 78A & 77-02A

Ref: (1) PKG 78 & 78A: Augmentation of Industrial Makeup & Drinking Water System

(2) PKG 77-02 & 77-02A: External Water System for Mills & FWPH.

Dear Sir,

This is with reference to certain technical issues arisen out of engineering drawings approved by MECON for packages under ref (1) &
(2). Specific cases pertinent to mismatch in engineering done in previous contracts (PKG 78 & PKG 77-02) and current packages (PKG
78A & PKG 77-02A) and its implication in terms of delay in completion of work at site and commercial/financial burden which BSP is
likely to bear, are enumerated below:

PKG 77-02 & PKG 77-02A (External Water System for Mills & FWPH):

It is observed that there is mismatch in 6.6 KV & 11 KV, 1000 KVA transformers supplied at site by erstwhile contractor M/s MBE, from
the drawings approved during that period. As per IC issued by MECON for this particular item, mismatch in LV side flange and PH-
PH/PH-E clearance was brought up and intimated to MECON design team to be taken care of accordingly in bus duct drawings.

However, post termination of PKG 77-02, this mismatch was not conveyed to new contractor (M/s TPL) and transformer drawings that
were handed over were without incorporating required changes. As a result, bus duct supplied at site by M/s TPL is not matching with
6.6 KV & 11 KV, 1000 KVA transformer. This was informed by BSP to MECON vide e-mail dated 18.01.19. It is therefore required to re-
engineer and re-manufacture the transformer end section of bus duct for 16 nos. transformers.

This would not only delay the site work but also would attract financial implication which contractor is likely to load on BSP.

PKG 78 & PKG 78A (Augmentation of Industrial Makeup & Drinking Water System):

It is observed that there is mismatch in sizing calculation of lighting transformer and MLDB for DWPH & DWTP area, approved under
PKG 78 & 78A. (Notably 20 KVA in PKG 78 & 50 KVA in PKG 78A, for same facilities envisaged under said packages).Lighting
transformer (20KVA) & MLDB for DWPH/DWTP area were directly procured by BSP based on drawings approved by MECON under
PKG 78. These items have been shown as “free issue” items for PKG 78A. M/s Voltas, however vide their e-mail dated 19.11.18, have
asked for “additional” basing their claim on sizing i.e. 50 KVA approved under PKG 78A. BSP vide -mail dated 03.12.19 and request for
further review vide e-mail dated 08.01.19, had sought MECON’s opinion on tenability of VOLTAS’ claim for these two items. In reply to
BSP’s e-mail, MECON has stated that supply of 50 KVA lighting transformer shall be treated as “additional” and is likely to have
financial implication on BSP.

Since, both the above cases have directly evolved due to discrepancy in approved drawings under PKG 78/78A & 77-02/77-02A, it is
BSP’s considered opinion that any financial implication/extra claim by party shall be recovered from MECON.

Details of extra claims by respective contractors for the above two cases shall be conveyed to MECON accordingly.

For your information please.

REGARDS

Ashok Kumar
https://mail.google.com/mail/u/0?ik=a91ea0aac8&view=pt&search=all&permmsgid=msg-f%3A1633771600868865942&simpl=msg-f%3A16337716008… 3/4
5/22/2019 Gmail - BSP 7.0 MT MODEX- Issues related to Extra Claim of Water Supply packages (Pkg-078A and 077-02A).
DGM I/C

Project Utility

5 attachments
CTS_P-122 of 412.pdf
66K
CTS_P-294 of 412.pdf
39K
IC-28.09.2013-1.pdf
747K
Mail from Mcnally Bharat-27.09.2013.pdf
79K
MOM dtd. 01.02.2019.pdf
285K

https://mail.google.com/mail/u/0?ik=a91ea0aac8&view=pt&search=all&permmsgid=msg-f%3A1633771600868865942&simpl=msg-f%3A16337716008… 4/4