=| ‘ve starLimited Eco Cente Business Tower, 11th loos Unt No 1&2, Pot Nod, EM Block, Sector, 8idharnagar, Kolkata 70008, India, T 491 3 4081 400 wow bluestarindacom Date: 10™ June 2020 To Ashok lakra DGM - Projects -OPS Bhillai Steel Plant Bhillai Chattisgarh - 490001. Sub: Reply to Bhillai Steel Plant Letter OPS/2020/16 dated 02" June 2020. Ref: 1) Our Letter dated 28” May 2020 - Request for issuance of commissioning Certificate and demand for outstanding dues as on date. 2) Contract Agreement dated July 7, 2012 bearing No DGM/PCC/TK/2012/361 3) Change Order Letter No - DGM(P-PCC)/TK/5(414)/2015/3491 dated 17.th August 2015 Dear Sir, ‘his has reference to your letter dated 02" June 2020. We have gone through the letter and comprehended that Bhillai Steel Plant (BSP) has purposefully diverted the entire focus related to delay in issuing the Commissioning Certificate and confirmation on Performance Guarantee Test to irrelevant and incorrect facts Point wise reply to your letter dated 02"° June 2020 is as under: - 1. Reply to Point No. 2: The content against this point is generalized without any basis. In fact BSP have purposefully ignored the facts which essentially caused delay in engineering, supply and execut of the package. The reasons were specially highlighted in our letter reference no: SL/05P/BV&PRMS/PKG-075C/DA/19-20/01 dated 27" September 2019, however, for your ready reference the reasons for delay are clarified once more a3 a. Delay in confirmation of BV & PRMS Site Location - 41 Days taken by BSP for just giving a ve line of confirmation of site location. Registered Ofc: Kasturi Buildings, Mohan Advani Chow, JamsheliTata Road, ‘Mumbai 400020, India. T:-+91 22 665 4000 F491 22.6665 4152, (iN 28920WH1946PL 008870Blue Star Limited b. Delay in finalization of reference coordinates - 31 Days taken by BSP for giving confirmation from date of request. © Delay in confirming FGL for BV & PRMS Site -77 Days taken by BSP for giving confirmation from date of request. 4. Delay in P&I Diagram Approval - Document was approved after 122 Days from date of initial submission, @. Delay in Billing Schedule Approval - 100 Days taken by SP in approving the Billing Schedule f. Delay in Mack Valve Vendor Approval - 104 Days taken by BSP for issuing Mack Valve vendor approval. & Delay in Hawa Valve Vendor Approval - 51 Days taken by BSP for issuing Hawa Valve vendor approval h. Delay in providing the accessibility of Main Plant Road required for Material movement - Main road was facilitated after 513 days from the date of contract signing, i. Delay in issuance of Change Order on account of Jain Committee Recommendation - The change order was issued after 594 days from the date of request. j. Delay in HUL Vendor Approval - 156 Days taken by BSP for issuing HUL vendor approval k. Delay in conducting PAC Test - PAC was delayed by 286 Days due to non-readiness of BSP 1. Delay in issuing Commissioning Certificate and conducting Performance Guarantee Test- The total delay on this account is 795 Days (count as on 04.06.2020). m. Delay in settlement of Additional Work related to change in scope of work - The total delay Con this account is 1484 Days (count as on 04.06.2020) and yet to be settled In view of above point, it is pertinent that the overall delay in project completion is solely attributable to BSP. 2. Reply against Point No.2: Defects/Pending Points are part of guarantee/warranty which needs to be rectified within the DLP period. However, the defect points were omamental and having no impact from operational point of View . The defect/pending points were attended and closed vide our communication ‘AD/BSL/BSP/BV&PRMS/COMM/18-19/03 dated 28 August 2018 i.e. within DLP period. 3. Reply against Point No.3: Blue Star have designed Buffer Vessels and PRMS as per the contractual requirement. Oxygen PRMS ‘was charged on 31.03.2018, however, in order to achieve 66% of guaranteed production capacity as er GCC Clause-25.2 , BSP should ensure oxygen consumption at End User Side(SMS-I). As perBlue Sta Limited 3 contractual terms the Oxygen was supposed to be consumed for lancing activity at 3 identical converters at SMS-IIl However, BSP was unable to make their converters available for such high consumption of Oxygen. For that reason, BSP have opted deviation from the contractual provision vide Committee Recommendation dated 25" September 2019 (Deliberation Point No. 4) wherein the 66% flow capacity which supposed to be 84000 Nm3/Hr was reduced to 56000 Nm3/Hr. Finally BSP have circulated the Protocol vide mail dated 14" December 2019. Hence, itis evident that BSP was ‘not in a position to carry out the commissioning test as specified in the signed contract agreement. BSP’s quote “Under the prev conducted the trials from 14.12.2019 to 11.03.2020 without co-operation of M/s. Blue Star and 8 circumstances, BSP worked out an alternative scheme and round the clock support of their Engineers’ is untrue. Blue Star have always stationed their ‘commissioning engineer throughout the year. In fact , Blue Star is not liable to provide manpower support for an unlimited period due to non-readiness of converters. py against Point No.4: 89P have issued change orders against Jain Commitee recommendation and additional Engineering ‘& Operating Station, however in spite of the requirement of BSP defined ,BSP have wilfully ignored ‘our claim against additional works on account of Change in Facilities as per GCC clause No. 41 and 42 which is arbitrary and against law of natural justice. 5, Reply against Point No. 5: Blue Star have submitted Extra Claim-2 vide letter reference SP/BSL/BV/EXTRA CLAIM-2 /16-17/578 dated 12" May 2016 followed by various reminders and follow up letters pertaining to the request for claim settlement. In response BSP replied vide their letter AGM/OPS/BV/2018/37 dated 26" May 2018 ie, 744 days from claim submission. This is again contradiction to GCC Clause No. 41 wherein Employer is supposed to address such claims within 14 days from date of submission of claim by contractor. In reply Blue Star responded vide letter reference AD/BSL/BSP/BV/18-19/10 dated 20” July 2018 Again on 22" August 2018, BSP issued a communication thereby negating our claim. Blue Star responded to BSP vide letter reference AD/BSL/BSP/BV/18-19/11 dated 31" August 2018 with necessary justification and backup documents and requested to settle entire claim of 241 Lacs in amicable manner.Blue Star Limited 4 BSP vide their email dated 16.01.2019 informed Blue Star to attend negotiation meeting on 22.01.2019 to which Blue Star responded vide email dated 18.01.2019 requesting price negotiation against total claim of 241 Lacs and not partial items, Since then there was no further response from BSP side In view of above clarification, iis pertinent that BSP forcefully asked Blue Star to accept partial claim amounting to lower value and are not ready to undertake any negotiation for higher value claim which was fully unjustified and untenable. 6. Reply against Point No. 6: Clarification to BSP Letter BV/2019/145 dated 30" October 2019 have been given vide our letter reference BSL/BSP/BV&PRMS/PKG-075C/DA/19-20/02 dated 19" November 2019. The purpose of 85P letter was inappropriate filled with malafide intent as because BSP has always tried to safe ‘guard their delays on account of Commissioning and Performance Guarantee by quoting “As per contract, delay analysis shall be done only after commissioning of facility ,however BSP may scrutinize it in advance to settle up to PAC Itis indeed a fact that Blue Star vide its letter BSL/BSP/BV& PRMS / PKG-075C /DA /19-20 /02 dated 19.11.2019 had clearly objected against the proposition of BSP that evaluation of delay analysis be scrutinized upto PAC citing such proposition were inappropriate as it indicated that SAIL BSP were trying to. safeguard their own interest and therefore expressed in clear terms that the extended period till date of the aforesaid letter of Blue Star to be considered for delay analysis certification as per mutual acceptance between the employer and contractor Furthermore Blue Star stated that neccessary efforts would be made towards representing the delay analysis as per BSP prescribed format 7. Reply against Point No. 7.a: Milestone are being deferred by BSP due to their inefficiency in making the End User ready. Therefore, Blue Star have the right to claim against the mile stone payments along with overdue interest. 2{1) Reply against Point No. 7.b: Milestone are being differed by BSP due to their inefficiency in making the End User ready. Hence Blue Star is liable to claim Over Stay charges for the extended period as per the law of natural justice,Blue Star Limited 5 (ii) Reply against The recorded project duration for the said contract including Jain Committee Change Order is 18 Months (12 Months + 6 Months). As the project duration is exceeding 12 Months therefore as per GCC Clause No. 11.3.3 & 11.4, Blue Stars liable to get payment against Price variation, UU) Reply against Point No. 7.d: Reply to this point already covered in Point No. 5. The said claim is tenable and justified. BSP intentionally disputed the claim and delaying the settlement intentionally, Under the aforesaid circumstances we hereby once again request BSP to issue the commissioning certificate as you have wilfully tried to avoid this crucial issue in your letter dated 02"° June 2020. Furthermore as per your request we are always open for discussions for neccesary closure of issues however the same must be carried out in a time bound manner . Hence we look forward for any such meetings/ discussions with next 7 days from the receipt of this letter and in case of any non action from your end the same shall be treated as closed ‘Thanking you , Yours Sincerely Kounrak O25 ROUNAK DAS Manager Legal Blue Star Limited Feo Centre Business Tower 11™ floor , Unit no 1&2 Plot no 4, EM Block, Sector- V Salt lake , Bidhannagar Kolkata - 700091 Copy To: 1. Chief Executive Officer , SAIL ,Bhillai Stee! Plant 2.ED Projects, SAIL, Bhillai Stee! Plant 3. Chief General Manager (Commercial), Bhillai Steel Plant.