1st report for 3rd qtr oct to dec 2013

Lender’s Engineer Report

Doc No. : PD/PRR-01/13-14/147 Date : January 28, 2014Assign No. : SO/13-14/04095Date : November 14, 2013

Lender’s Engineer Project Review Report

for3500 TCD Sugar Factory

& 18 MW Cogeneration Power Plant

Prepared forThe Karnataka State Co-operative Apex Bank

Ltd.

As Lender’s Institutional Engineers forM/s. Shri Balaji Sugars & Chemicals Private

Limited

Prepared by

MITCON Consultancy & Engineering Services Ltd.

Kubera Chambers, 1st FloorShivajinagar, Pune – 411 005

Quarterly Progress Report no. 1For the Quarter of Oct - Dec, 2013

LE Report for Sugar Factory & Cogen Power at Balaji Sugars, Muddebihal, Karnataka


Project Review and Site Visit Report

OnSugar Factory and Cogeneration Power Plant

TABLE OF CONTENTS

CHAPTER NOS.

PARTICULARS PAGE NOS.

EXECUTIVE SUMMARY 3 - 6

CHAPTER I Project Review as of 2nd Jan 2014 Site Visit 7 - 10

CHAPTER II Review Of Funds Deployed as on 31st Dec 2013 11 – 13

Comments & Recommendations 14

Pictures of Site Activity & Update 15

LIE Report for Sugar Factory & Cogen Power at Balaji Sugars, Muddebihal, Karnataka 2


EXECUTIVE SUMMARY

01. BACKGROUND

M/s. MITCON Consultancy & Engineering Services Ltd., Pune have been appointed as Lenders Institutional Engineer (LIE) for the 3500 TCD Sugar Factory and 18 MW Bagasse based cogeneration power project of M/s Shri Balaji Sugars & Chemicals Pvt. Ltd. (SBSCPL) located at village Yaragal-Madari, Tal. Muddebihal, District Bijapur, Karanataka. The plant is around 100 km from Bijapur city.

This report presents the site visit and project status review based on Jan 2 nd

2014 visit to site. The report is based on inputs from M/s SBSCPL and discussions held at their site and head office. Synopsis of this report is presented below, along with recommended actions.

02. PROJECT INFORMATION

Table no. 1: Project Information

Project Capacity 3500 TCD Sugar Factory and18 MW Bagasse Based Cogeneration Power Project

Project Owner M/s Shri Balaji Sugars & Chemicals Pvt. Ltd. (SBSCPL)

Project Location Village Yaragal-Madari, Tal. Muddebihal, District Bijapur, Karanataka

Project Zero Date May 2013

Sugar Factory proposed Commencement date

October 2014

03. PROJECT UPDATE

SBSCPL has deployed around 10 nos. experienced personnel for overseeing various activities of the project at site. Most of the occupied land is provided with barbed wire fencing. Civil work for sugar factory building is complete and structural column erection is also completed. Civil foundation for sugar plant equipments are in various advanced stages of completion.

Major column erection for boiler drum have commenced with balance columns being fabricated at site. M/s SBSCPL is continuously monitoring the project progress and instructing all suppliers through daily meetings and monthly monitoring reviews to keep up the pace of work presently observed at site.



Project progress at major work area’s is as below.

Civil Work at Sugar Factory Building is completed for building super structure. Column for plant building is also completed. Civil work is completed for following plant equipments namely Fibrizer foundation, Cane leveler, cane chopper, cane carrier and feeding table. Foundation for mills is in progress. Civil work including structural support members are ready for Boiling house equipments namely Juice heaters. Civil work foundations are completed for Evaporator bodies, Pans, juice clarifier, etc. RCC Raw water reservoir of 75 lakh litre water holding capacity is more than 50% complete. Foundation work at Molasses storage tanks and Crystallizer is also in advanced stages. Temporary road has been laid around the sugar factory building and are in motorable condition.

Civil work for Boiler house area is in progress at auxiliary equipment foundation and Chimney Raft Foundation. Raft for 70 m Chimney height is completed. Civil work is in progress at ID Fan foundation excavation.

STG Building: Building structure is ready and Civil work for TG deck footings will be taken up in coming weeks.

Warehouse / Stores building is 75% completed. Roofing work, External and internal plastering work will be taken up next. Work on internal slab will also be taken up in coming months.

Boiler house: Main boiler columns are being fabricated at site. Four nos. columns for drum support have been erected in place. Air preheater tubes have been received at site.

Miscellaneous Packages : Status of work for miscellaneous packages is as under.

o Sugar plant equipments – Fabrication of mill rollers and other sugar plant equipments is in progress at SS Enggr. works in Pune

o Boiler is being manufactured by SS Enggr. Turbine is ordered from Shin Nippon alongwith TDPS Generator and LoC has been opened.

o Cooling Tower ordering is under negotiations and will be placed by mid Feb ’14.

o Fuel and Ash handling system and other auxiliaries like air compressor, EOT, Piping, DM plant, ordering is also in progress and will be placed simultaneously.

o Electricals – SS Engineers will be fabricating LT panels themselves and HT panel and DCS system ordering will be placed on approved vendors as per agreement.

o Transmission tower, right of way is being taken up with locals.



04. ENGINEERING PROGRESS

Table below highlights the Engineering Progress of Various Packages.

Table no. 2 : Engineering Progress Status

The design, documentation, engineering inputs & drawings status is briefly listed below.

All Engineering Layouts have been finalised and are being released at site as per requirements.

All P&I diagrams have been prepared and are being submitted to Consultants for vetting and approvals.

The EPC contract documents have been prepared. Raw water piping scheme will be taken up the Company. Vendor drawing review of respective packages are in progress. Vendor drawing review of STG/Boiler/WTP electrical drawings are in

progress Vendor drawing review of Switch yard and transformers will be submitted by

March ’14.

Sugar Plant Progress Review S Curve

Actual, Dec-13, 29.3%

Scheduled

0%

20%

40%

60%

80%

100%

Jun-13

Jul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14



Cogen Plant Progress Review S Curve

Scheduled

0%

20%

40%

60%

80%

100%

Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

Jun-14

Actual 14%



CHAPTER I

PROJECT REVIEW AS OF 31ST Dec 2013

01. INTRODUCTION

The project review is divided into progress on physical, engineering, procurement, construction, approvals and financial fronts.

The physical front is further divided into infrastructure development and Civil Construction related to basic infrastructure & foundation work.

Engineering front is further divided into basic engineering, release of package specifications, release of construction drawings and release of interconnection drawings.

02. PHYSICAL PROGRESS REVIEW

INFRASTRUCTURE DEVELOPMENT

Inhouse manpower deployment at site by SBSCPL is around 10 personnel covering Sr. Management, Supervisory and Admin Staff. The same is presently satisfactory and competent and needs to be augmented as work progresses at site.

Fencing : The site is provided with barbed wire fencing. Presently around 2 km length of barbed wire fens has been erected with balance work for 1.5 km length.

Accommodation : Space for on site accommodation for contractors personnel has been provided. Guest house and canteen facility for visiting agencies has also been extended.

Manpower : The total strength of the EPC Contractor M/s SS Engineers plus their sub vendor’s on site personnel is around 40 nos. Presently three contractors have been mobilised for mechanical works and fabrication at site. Additional teams needs to be deployed separately for water wall panels, Eco & APH tubing, ESP, Insulation, Electrical, C & I works as work progresses. Work is in progress for fabrication of Boiler support columns and other structural members.

The Civil contractor has a presence of around 60 personnel for undertaking civil works at various equipment packages. Presently 2 nos. civil contractor’s have been mobilised at site. Each of the civil contractor’s at site have 1 no. hydra, JCB and a cement batching plant.

Storage: Fabrication yard for structural steel work welding as well as for stacking material receipts has been allocated to the EPC Contractor. The same is satisfactory and provides liberal space for site work. Construction power via



DG set has been provided to vendors as per demand on payable basis. KPTCL power for construction work is likely to be commissioned in coming few weeks.

Miscellaneous . Installation of outdoor lighting fixtures has been completed.

BASIC INFRASTRUCTURE

Arrangements for water lifting and provision of drinking water are in place,

Sugar Plant Access road is being strengthened, Construction water and power have been made available to all vendors, Basic amenities like canteen and admin office are operational.

FOUNDATION WORK

Plant building / civil work status

Civil work for sugar plant machinery is completed for cane preparation and handling equipments. Foundation for mills, Juice clarifier and auxiliary equipments in boiling house area is in progress.

Civil work foundation for BTG equipments is in progress. Main boiler footings are ready. Footings for auxiliary equipments are in progress.

Structural work at Power house building is in advanced stages of completion.

Chimney raft is completed. Foundation work at molasses tank area is in progress.

Non plant building / civil work status

Temporary Site office and admin block is complete. Guest house and canteen facilities are available. Warehouse / Stores is nearing completion with balance work at roofing,

external and internal plastering and internal slab.

03. ENGINEERING FRONT:

BASIC ENGINEERING

Completed milestones:

All Engineering layouts have been completed. P&I diagrams have been prepared and are being submitted to Engineering Consultants for review and approval. All contract documents have been completed. The Contract documents for EPC of entire sugar plant and cogeneration power plant have been completed. Review of mechanical drawings are in progress.



ORDERING OF BALACE OF PLANT EQUIPMENTS

The EPC Contract document / agreement submitted by SBSCPL to LE and have been reviewed and found satisfactory and in line with similar projects.

RELEASE OF CONSTRUCTION DRAWINGS AND RELEASE OF INTERCONNECTION DRAWINGS

Vendor drawing review of respective package equipment is in progress. Vendor drawing review is in progress for structural erection of Boiler,

Turbine and auxiliaries.

04. ACTIVITIES PLANNED FOR THE NEXT MONTH / QUARTER

Vendor drawing review for balance work as applicable. Vendor drawing review for P&ID’s pertaining to mechanical packages

such as Boiler, Turbine, Electrical, Fuel etc Vendor drawing review of STG/Boiler/WTP electrical drawings Vendor drawing review of Switch yard and transformers Vendor drawing review for EBOP packages Vendor documents review for Start ups and O&M

05. AREAS ON CRITICAL PATH

Chimney shell concreting work was earlier held up. Amendment for Chimney height was requested by LE to be taken up with KSPCB at the earliest. The same is now completed with revised height and as per KSPCB norms and engineering design to M/s AGL is approved.

Column fabrication work for Boiler columns needs to be expedited. Additional welders and fabricators to be mobilised by EPC Contractor M/s SS Engg. and their sub vendor.

Adequate Quality Assurance reports should be prepared and submitted by all on site vendors to Company and Consultants for their comments / approvals as necessary. Records of all QA test reports to be maintain at site. Boiler main columns should be more thoroughly inspected before fabrication and erection.

Route survey for right of way is undertaken for transmission line towers. Ordering for all balance plant and equipments to be expedited.

06. REMARKS

From present work progress and achieved milestones it is noted that civil work foundations for main plant buildings, sugar mill machinery, cane preparation equipments, molasses storage tanks, clarifier, main Boiler columns, TG Building, RCC Chimney, Warehouse and weigh bridge is complete. Civil & structural work at Bagasse & Coal Handling Plant (CHP) area needs to be taken up and expedited. Civil contractor’s have been instructed to augment required workforce. Following areas of concern need to be addressed.



Balaji Sugars & SS Engineers (EPC Contractor) to co-ordinate with KPTCL transmission and switchyard personnel to expedite 110 kV substation work and enable early completion and back charging arrangement.

Balaji Sugars & SS Engineers (EPC Contractor) to maintain records of all Tests and Inspection reports conducted at site as well at their main workshop as per approved procedure.



CHAPTER II

REVIEW OF FUNDS DEPLOYED AS OF 31st DECEMBER 2013

01. BACKGROUND

This chapter presents the review of and comments on Cash drawn as of 31st Dec 2013 and project status review based on Monthly progress report of Engineering consultants. The report is based on inputs from M/s SBSCPL and discussions held at their site office and head office. Synopsis of this report is presented below, along with recommended actions.

02. INTRODUCTION:

The overall project cost as given in table no. 3 approved for the Sugar Factory and Bagasse Cogen Power Project is Rs. 211.55 Crore with term loan as Rs. 150.00 Crore excluding bridge loan towards SDF. The term loan is to be repaid in 28 equal quarterly installments with a moratorium of 2 years after receipt of loan installments.

Table no. 3: Cogen Project Cost as per Project Report, Rs Lakh

Sugar Plant Cogen

Power

Total

Land & Site Development 686 288 974

Civil Works & Building 1805 1142 2947

Plant & Machinery 6425 7535 13960

Miscellaneous Fixed Assets 258 175 433

Preliminary Expenses 13 9 22

Preoperative Expenses 927 797 1746

Contingencies 202 199 401

Working Capital Margin 574 120 694

Total 10890 10265 21155



Table no. 4: Means Of Finance for Cogen Power Project, Rs Lakh

Financing pattern Sugar Plant Cogen Power

SBSCPL Margin (30% ) 3267 1996 5263SDF Quasi Equity 0 892 892FI/Bank Loan 7625 7375 15000

Total 10892 10263 21155

Table no. 5: Proposed Drawdown Schedule

Sr. no. Quarter in which Funds are proposed to be released

% of Term Loan

1 1st Quarter September ‘13 35%

2 2nd Quarter December ‘13 30%

3 3rd Quarter March ‘14 20%

4 4th Quarter June ‘14 15%

The Company has till date incurred an expense of Rs. 5550.86 Lakh for the implementation of the project. The CA certificate for the same is attached in annexure. The break up of the expense incurred is as below.

Table no. 6: Project Cost Incurred Update

Sr. no. Particulars Project Cost Incurred Rs Lakh

1 Land & Site Development 939.00

2 Building & Civil Works 1672.49

3 Plant & Machinery 2534.42

4 Preliminary & Pre-operative Expenses

370.71

Total 5550.86



Table no. 7: Means of Finance

Sr. no. Particulars Amount Rs Lakh

1 Share Capital 2806.12

2 Loan from SDF Nil

Total Equity (A) 2806.12

3 Term Loans

Consortium of Banks 4375.00

4 Unsecured Loans Nil

Total Borrowings (B) 4375.00

Total (A+B) 7181.12

03. LIST OF CLEARANCES RECEIVED

i) Gram Panchayat NOC received.ii) Copy of IEM issued by Ministry of Commerce and Industry.iii) Proposed Sugar factory installed capacity.iv) Financial tie ups have been completed.v) EPC order for entire project placed with M/s SS Engineers, of Punevi) C.F.E from Karnataka State Pollution Control Board received.vii) EIA received.viii) Adequate land purchased for installing the integrated sugar and

cogeneration power plant purchased and is in the possession of the Company. Additional land also procured adjacent to the project for storing bagasse and installing a raw water reservoir.

ix) Satisfactory Project rating from ICRA.x) GoK approval received for 4000 KLPD of water from back waters

of Narayanpur Dam.xi) Route survey undertaken for right of way for Transmission towers.xii) Clearance from Sugar Directorate for SDF assistance.xiii) Project clearance from KREDA received.



04. COMMENTS & RECOMMENDATIONS

EQUIPMENT ORDERING :

The major equipment packages like Civil work, Site development, Steel & cement, Boiler & aux., Chimney, Turbine & aux., Cooling Tower, Pumps, Raw water pipe line, CHP & Ash systems, water treatment plants, EOT crane, Transformers, Electrical switchyard equipments, have been ordered and are in advanced stages of erection and installation.

M/s Balaji Sugars have released advance payments as per contract agreements to EPC Contractor M/s SS Engineers. Few payments have also been released to civil work contractors.

All the preliminary and pre-operative expenses incurred are also in line with project construction activities.

The funds drawn are in line with the project schedule and payment terms

as agreed with various suppliers. The payments made to the respective agencies are in line with the ongoing project progress and billing schedule of respective package equipments. No undue advance payments / invoices have been noticed.

The work progress is in advanced stages and is in line with scheduled COD. The boiler house structure, RCC chimney, foundations for major equipment erection have commenced. The delivery of material to site from the suppliers should start in coming months as per schedule.

Following care should be taken for timely commissioning of the project.

Focus Areas

M/s Balaji Sugars needs to maintain close monitoring of the project progress so as to expedite current pace of work.

Project progress on the installation of both sugar mill machinery and BTG and auxiliary system’s needs to be expedited. Bagasse transfer conveyors and systems from sugar mill to upto cogen plant needs to be planned to avoid any delays. Manpower deployment of civil contractor and all package vendor’s needs to be closely monitored so as to complete balance work in time.

Power Evacuation Grid and 110 kV EHV System needs to be in place for sustained evacuation of all exportable surplus power from the cogen plant.



ACTUAL SITE PICTURES OF ACTIVITIES IN PROGRESS


1st report for 3rd qtr oct to dec 2013

Documents