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
Resources

Haworth India Hosts Women’s Leadership Panel Series

Haworth India marked International Women’s Day by hosting a leadership roundtable series titled ‘Give to Gain’, bringing together senior women leaders from architecture and design firms, corporates and project management consultancies. The series has been conducted in Delhi and Mumbai, with upcoming sessions scheduled in Bengaluru and Hyderabad on 27 March 2026. Structured as moderated panel discussions followed by audience interaction, the initiative examined the business impact of women’s leadership and the role of inclusive workplaces in supporting professional growth. Manish Khan..

Next Story
Real Estate

Max Estates Secures RERA For Max One Project

Max Estates has secured RERA approval (UPRERA No.: UPRERAPRJ9759) for its Max One development around Max Towers in Sector 16B, Noida, bringing renewed progress to a project previously stalled following the insolvency of its earlier developer. Spread across around 10 acres with an estimated development potential of about 2.5 million sq ft, Max One is planned as an integrated mixed-use campus combining serviced residences, premium offices, retail spaces and a private club. The project is expected to generate total sales potential of about Rs 20 billion along with an estimated annuity rental inc..

Next Story
Real Estate

Hindware Introduces Starc Smart Wall Mount Toilet

Hindware has introduced the Starc Smart Wall-Mount Toilet under its Hindware Italian Collection, designed to combine automation, hygiene and contemporary bathroom aesthetics. The model features automatic flushing, sensor-based seat opening and closing, and remote-controlled functions. It also includes an oscillating water spray and warm air dryer for cleaning, along with a self-cleaning nozzle designed to maintain hygiene. Additional features include adjustable heated seating, customisable water temperature and pressure settings, a foot-touch flush system and an LCD control interface. The wa..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement