He said due to market conditions, the company had to take the decision not to extend the Rs 800 crore contract. The contract was meant to supply power equipment to NTPC's proposed 1,600 MW Darlipali project in Odisha.
A very large part of your order book is tied up with NTPC but BGR does not see any kind of backlash. "The project was not moving forward because some clearances needed for this site. This site was having a problem of getting clearance from the environment ministry for the last two years," he added.
Below is the edited transcript of Swaminnathan's interview to CNBC-TV18.
Q: Could you confirm whether or not you indeed have pulled out of that large contract with NTPC? What does it amount to and what could the impact for BGR be?
A: The phrase is a bit of a misnomer saying that we have pulled out of the contract. It is not pulling out of a contract. This is a job, for which we bid on September 15, 2011. We had kept the price valid for around six months as required by the tender. There have been around six extensions that we had been giving so far. At that point of time, it was not possible for us to extend further for two reasons. Firstly, there has been change in the market scenario and secondly, we would not know at what point of time we would get an order. So, this is indeterminable and hence, we have not extended our offer
Q: A very large part of your order book is tied up with NTPC. Could there be any kind of backlash. Are you sure you want to incur their displeasure by not going ahead with this?
A: This is not incurring any displeasure at all. The project was not moving forward because some clearances need to be obtained for this site. This site was having a problem of getting clearance from the environment ministry for the last two years. We would not know when it will get it and that is why we said we cannot extent further.
Q: Is this a land availability issue or a pricing issue?
A: The reason with NTPC not able to place an order was (due to) land availability issue.