As overtly known in electrical equipment manufacturing industry for power plants, the

power projects of the tune of 2X660MW normally has a cycle of 3-5 years for completion of
engineering for inputs required for preparation of switchgear drawings and accordingly
bidders of switchgear package are firming up their prices while quoting as there is no
price variation clause in the contract. Hence, price escalation is already available in
the prices quoted by Nitya Electrocontrols.
Hence, the claim of Nitya Electrocontrols for the Price Variation is against the agreed
contractual obligations.
Prior Notice for invoking Risk and Cost clause of contract was sent to Nitya
Electrocontrols on 19th Feb 2021 for partial quantity of material required on emergency
basis based on project requirement.
Nitya Electrocontrols was also given an opportunity to respond within 7 days of issuing
Prior Notice on 19th Feb 2021 by providing schedule of balance supplies, raising inspection
calls and to duly honour contractual terms.
However, Nitya Electrocontrols failed to give any commitment for supply of balance
material, Notice of invoking Risk and Cost clause of contract was issued on 06 th Apr 2021
and Nitya Electro Controls were directed to pay Rs. 1,10,99,738.80 towards the
differential cost including handling charges, on account of risk and cost.
Hence, the claim of Nitya Electrocontrols for the Price escalation is against the agreed
contractual obligations.
Notice invoking Risk and Cost clause of contract was issued on 06 th Apr 2021 due to non-
performance of Nitya Electro Controls. However, Nitya Electrocontrols has not indicated
any interest in supply of balance material as per the contract, hence, the claim of Nitya
Electrocontrols for the expected profit is not tenable.
As per notice of invoking Risk and Cost clause of contract issued on 06 th Apr 2021, Nitya
Electro Controls was directed to pay Rs. 1,10,99,738.80 towards the differential cost
including handling charges, on account of risk and cost and the same has been adjusted
against any unpaid outstanding of Nitya Electrocontrols which is in line with contractual
terms and conditions agreed by Nitya Electrocnontrols. Hence, the claim of Nitya
Electrocontrols is not tenable.

As per notice of invoking Risk and Cost clause of contract issued on 06 th Apr 2021, Nitya
Electro Controls was directed to pay Rs. 1,10,99,738.80 towards the differential cost
including handling charges, on account of risk and cost and the same has been adjusted
against any unpaid outstanding of Nitya Electrocontrols which is in line with contractual
terms and conditions agreed by Nitya Electrocnontrols. Hence, the claim of Nitya
Electrocontrols is not tenable.
Nonperformance of Nitya Electrocontrols has led to the situation where BHEL was forced to
make alternate arrangement for the material for the prestigious project (2x660 MW MAITREE
SUPER THERMAL POWER PROJECT) at the risk and cost of Nitya Electrocontrols.
Sufficient opportunities were given to Nitya Electrocontrols to perform the contract prior
to invoking risk and cost. Hence, this claim is not acceptable to BHEL.

Nonperformance of Nitya Electrocontrols has led to the situation where BHEL was forced to
make alternate arrangement for the material for the prestigious project (2x660 MW MAITREE
SUPER THERMAL POWER PROJECT) at the risk and cost of Nitya Electrocontrols.
Sufficient opportunities were given to Nitya Electrocontrols to perform the contract prior
to invoking risk and cost. Hence, this claim is not acceptable to BHEL.