It is reported that Indian steelmaker Steel Authority of India Limited (SAIL) has decided to terminate its offer made to South Korean general construction company POSCO Engineering & Construction (POSCO E&C) for the construction of a blast furnace (BF) at its Bhilai Steel Plant, as POSCO E&C has failed to sign the contract despite several reminders.
POSCO E&C won the order to construct the $400 million BF for SAIL's Bhilai Steel Plant in February 2008. The project, which would double the plant's annual production capacity to 2.7 million mt, was to be completed by the end of 2010. According to media reports, POSCO E&C delayed the signing of the contract as the Indian steelmaker was demanding a 15-20 percent cut in the construction cost.
Meanwhile, according to Indian steel secretary P.K. Rastogi, SAIL is to float a new tender, and is expecting to get a cheaper deal which will help to reduce the cost of expansion.
As SteelOrbis previously reported, in September 2007 SAIL announced its modernization and expansion program for increasing the company's annual production capacity from the current 14 million mt to over 26 million mt. The program was aimed at maintaining the company's leadership position in the domestic steel market and contributing to the growth of the Indian steel sector.