Don't do business with Bharat Heavy Plates

Vol 6, PW 7 (05 Jun 02) Midstream & Downstream

CHECK WITH IOC before doing business with state-owned engineering company Bharat Heavy Plates and Vessels.

We learn IOC is behind schedule for three crucial refinery expansion projects thanks to delays at BHPV. It's 15 months late in completing its 1.8m t/y Barauni Refinery expansion because BHPV is having cash flow problems.

BHPV was awarded a Rs71.6cr ($14.9m) sulphur block contract at Barauni. Other problems include "total lack of co-ordination, commitment, follow-up and slow invoicing" at BHPV.

Last March BHPV promised to finish the project this month a hollow promise! "Commitments by the managing director of BHPV during the past one year have failed to deliver." Now IOC is seriously considering whether it should take over and complete the rest of the work directly through BHPV's subcontractors or other contractors. Similar delay has hit the Digboi Refinery in Assam where hydro treating facilities are being installed.

BHPV's delay in delivering equipment and materials has pushed the project back six months. Regular review meetings with BHPV management and follow-ups with sub-vendors have yielded nothing.

IOC complains BHPV is not asking sub vendors to send materials directly to the project and is slow in raising invoices "even though they are facing financial problems." Even here, IOC has no faith in BHPV's commitments and has asked it to "consider" getting out so that the project is not delayed. Ditto for the Chennai Refinery expansion project, where BHPV has been awarded the boiler, air separation and deaerator packages.

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