Tamil Nadu power utility serves contract termination notice to BGR Energy Systems
- July 23, 2025
Tamil Nadu Power Generation Corporation Ltd (TNPGCL) has served a contract termination notice to BGR Energy Systems Ltd with respect to a major contract valued at over Rs.2,500 crore.
In a stock exchange filing, BGR Energy Systems Ltd said that TNPGCL in its order dated July 18, 2025, has terminated the contract entered between BGR Energy Systems Ltd and PNPGCL for balance of plant (BoP) EPC of the 1×800-MW North Chennai supercritical thermal power project, Stage III in Tamil Nadu. The contract also involved allied civil works on EPC basis.
The contract, valued at Rs.2,600.02 crore, was terminated due to the following reasons:
- The contractor was unable to fulfill key project obligations
- Critical systems remained incomplete
- The contractual requirements for insurance renewals and guarantee extensions were not met
BGR Energy said that it was awaiting a positive outcome out of the arbitration application pending before the Hon’ble High Court of Madras in this matter, and that the contract termination has no major impact on financial and/or operations of the company.
It may be noted that when the above-mentioned contract was formalized, Tamil Nadu Power Generation Corporation Ltd (TNPGCL) was known Tamil Nadu Generation & Distribution Corporation Ltd (TANGEDCO). In early 2024, TANGEDCO was bifurcated into TNPGCL and Tamil Nadu Power Distribution Corporation Ltd (TNPDCL).
Jharkhand contract
It may be recalled that in August 2024, State transmission utility Jharkhand Urja Sanchar Nigam Ltd (JUSNL) terminated a contract placed on BGR Energy Systems Ltd.
The contract, formalized in September 2020, involved supply, installation, testing and commissioning of 132/33kV GIS substations at Sarath, Sundernagar and Chattarpur, in Jharkhand.
The contract termination letter dated August 14, 2024 was received on August 20, 2024, BGR Energy said.
On February 10, 2020, BGR Energy Systems Ltd had announced that the company’s Electrical Projects Division had secured the said contract, valued at Rs.124.13 crore (exclusive of GST), on turnkey basis with a scheduled completion of 24 months
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