Commissioning of oxygen plant: RINL in final talks with French firm

Visakhapatnam RASHTRIYA Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), is ready to pay progressive relief of Rs 85 crore to the French company for early commissioning of the oxygen plant awarded to it under Build, Own, Operate (BOO) basis.

Out of the total capacity of 1,700 tonne per day, initially about 100 tonne of liquid oxygen can only be produced per day from the Air Separation Plant. It can be transported through road tankers to cater to the medical requirements of the critically ill patients, RINL pointed out.

The plant known as BOO plant, has been caught in a legal battle for the past several years. RINL has awarded the contract to Air Liquide India Holding Pvt Ltd (ALIH) for setting up a 2x850 TPD oxygen plant on (BOO) basis with a scheduled completion by January, 2013. The plant erection was completed by February, 2013, but the trial runs did not start due to contractual dispute between RINL and ALIH on certain terms and conditions.

Responding to media reports, RINL said in a communiqué that ALIH had unilaterally terminated the contract in December, 2014. As ALIH had reneged on their BOO commitment, RINL invoked Arbitration in October, 2017, the release stated.

The Arbitral Tribunal in its award on April 2 this year directed ALIH to commence commissioning of the plant not later than May 1 and RINL shall take over the plant as per the price to be determined by the tribunal on book value basis. In response, ALIH had sought an interim relief from the tribunal demanding a progressive payment of Rs 85 crore for commencement of commissioning and certain other commercial conditions.

RINL said it had agreed for the relief sought by ALIH and requested them to commence commissioning of the plant by May 1 this year as directed by the tribunal. During the arbitration proceedings, ALIH indicated that it takes about three months for completing the health check of the equipment (which was erected about eight years back) and six to seven months for commencement of production, keeping in view that the equipment were sourced from multiple vendors, the criticality of the cryogenic equipment and the safety hazards associated with the oxygen-making process.

The present Air Separation Plant of RINL, which has five units, generating 2,600 tonne of oxygen required for various critical equipment to produce steel and 100 tonne of liquid oxygen. The liquid oxygen of 100 tonne is being given for medical purposes as per the advice of the government authorities.