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.

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code