NLCIL Faces Scrutiny Over Rs 3.32 Billion Project Cost Overrun
Real Estate

NLCIL Faces Scrutiny Over Rs 3.32 Billion Project Cost Overrun

Neyveli Lignite Corporation India Ltd (NLCIL), a public sector enterprise under the Ministry of Coal, is under scrutiny for allegedly bypassing standard tendering procedures in appointing a project management consultant (PMC) for its integrated township project at Talabira, Odisha, resulting in a cost overrun of nearly Rs 3.32 billion.

The Rs 1.92 billion township project, part of a broader engineering, procurement and construction (EPC) package linked to a thermal power plant, was originally designed by NLCIL’s Central Technical Office (CTO) — in line with the company’s long-standing practice. The plan included 642 employee houses, CISF accommodation, a hospital, an indoor stadium, and road connectivity to nearby highways.

However, after Bharat Heavy Electricals Ltd (BHEL), the EPC bidder, requested that non-EPC elements such as the township be excluded from its scope to avoid project delays, the NLCIL board approved the de-scoping.

Subsequently, employees allege that the township project was transferred from the CTO to the Mines Division, which lacked experience in township projects. The Mines Division then appointed HLL Infra Tech Services (HITES) — a PSU under the Union Health Ministry — as PMC on a nomination basis, without a competitive tender process.

According to internal guidelines, nomination-based awards are permitted only in emergency situations involving risk to life or property. Critics question why HITES was appointed in June 2024, when no such urgency existed, particularly as the tender was only floated nine months later, in March 2025.

The EPC contract was eventually awarded to Hyderabad-based KPC Projects Ltd for Rs 5.25 billion by HITES/NLCIL — a cost described by employees as “exorbitant” compared with the original internal estimate, especially given the reduced project scope.

The revised plan now includes only 300 houses, a smaller hospital, and an open-air stadium, with the approach road and CISF quarters removed from the design. Employees allege that this significant reduction in scope, combined with a sharp cost escalation, reflects procedural lapses and potential misuse of authority by officials at both NLCIL and HITES.

Sources have called for a CBI investigation, though no FIR has yet been filed.

When contacted, an NLCIL spokesperson said, “As the issues raised are sub judice, we cannot offer any comments at this stage.”

The controversy has drawn attention to the company’s adherence to procurement norms, with observers urging greater transparency and accountability in public-sector infrastructure projects.

Neyveli Lignite Corporation India Ltd (NLCIL), a public sector enterprise under the Ministry of Coal, is under scrutiny for allegedly bypassing standard tendering procedures in appointing a project management consultant (PMC) for its integrated township project at Talabira, Odisha, resulting in a cost overrun of nearly Rs 3.32 billion. The Rs 1.92 billion township project, part of a broader engineering, procurement and construction (EPC) package linked to a thermal power plant, was originally designed by NLCIL’s Central Technical Office (CTO) — in line with the company’s long-standing practice. The plan included 642 employee houses, CISF accommodation, a hospital, an indoor stadium, and road connectivity to nearby highways. However, after Bharat Heavy Electricals Ltd (BHEL), the EPC bidder, requested that non-EPC elements such as the township be excluded from its scope to avoid project delays, the NLCIL board approved the de-scoping. Subsequently, employees allege that the township project was transferred from the CTO to the Mines Division, which lacked experience in township projects. The Mines Division then appointed HLL Infra Tech Services (HITES) — a PSU under the Union Health Ministry — as PMC on a nomination basis, without a competitive tender process. According to internal guidelines, nomination-based awards are permitted only in emergency situations involving risk to life or property. Critics question why HITES was appointed in June 2024, when no such urgency existed, particularly as the tender was only floated nine months later, in March 2025. The EPC contract was eventually awarded to Hyderabad-based KPC Projects Ltd for Rs 5.25 billion by HITES/NLCIL — a cost described by employees as “exorbitant” compared with the original internal estimate, especially given the reduced project scope. The revised plan now includes only 300 houses, a smaller hospital, and an open-air stadium, with the approach road and CISF quarters removed from the design. Employees allege that this significant reduction in scope, combined with a sharp cost escalation, reflects procedural lapses and potential misuse of authority by officials at both NLCIL and HITES. Sources have called for a CBI investigation, though no FIR has yet been filed. When contacted, an NLCIL spokesperson said, “As the issues raised are sub judice, we cannot offer any comments at this stage.” The controversy has drawn attention to the company’s adherence to procurement norms, with observers urging greater transparency and accountability in public-sector infrastructure projects.

Next Story
Infrastructure Urban

CFI Appoints New National Council for FY27 and FY28

The Construction Federation of India (CFI) has announced its newly elected National Council and office bearers for a two-year term covering FY27 and FY28. M. V. Satish, Advisor to CMD and Lead Ambassador for Middle East, L&T, has been elected President; Priti Patel, Chief Strategy & Growth Officer, Tata Projects, has been appointed Vice President; and Ajit Bhate, Managing Director, Precast India Infrastructures, has taken charge as Treasurer.The newly formed National Council brings together senior leaders from major EPC and infrastructure companies, reflecting CFI’s continued focus o..

Next Story
Infrastructure Urban

India REIT Market Gains Momentum with Strong Returns

India’s Real Estate Investment Trust (REIT) market is witnessing strong growth, emerging as a competitive investment avenue both domestically and across Asia. According to a recent ANAROCK report released at EXCELERATE 2026 by NAREDCO Maharashtra NextGen, the sector is evolving into a mature asset class driven by solid fundamentals, regulatory backing and rising investor confidence.The introduction of Small and Medium REITs (SM REITs) in 2025 has further widened access through fractional ownership, unlocking a potential monetisation opportunity of Rs 670–710 billion. Indian REITs have deli..

Next Story
Infrastructure Energy

G R Infraprojects Secures Rs 4,130 Million BESS Contract From NTPC

G R Infraprojects said it has secured a contract from NTPC to supply and implement a battery energy storage system (BESS) valued at Rs 4,130 million (mn). The company reported the order was awarded as part of NTPC's ongoing efforts to enhance grid flexibility and energy storage capacity. The contract represents a notable addition to the firm's project pipeline and underscores demand for utility scale storage solutions. The award is expected to strengthen G R Infraprojects' presence in the energy infrastructure sector and to contribute to the firm's order book and future revenues, subject to st..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement