Lenders Engineer Report

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

Lenders Engineer Project Review

Report
for

3500 TCD Sugar Factory

&
18 MW Cogeneration Power Plant
Prepared for

The Karnataka State Co-operative Apex Bank

Ltd.
As Lenders Institutional Engineers for
M/s. Shri Balaji Sugars & Chemicals Private
Limited

Prepared by

MITCON Consultancy & Engineering Services

Ltd.
Kubera Chambers, 1st Floor
Shivajinagar, Pune 411 005
Quarterly Progress Report no. 1
For the Quarter of Oct - Dec, 2013
LE Report for Sugar Factory & Cogen Power at Balaji Sugars, Muddebihal, Karnataka

Lenders Engineer Report

Project Review and Site Visit Report

On
Sugar Factory and Cogeneration Power Plant

TABLE OF CONTENTS
CHAPTER
NOS.

PARTICULARS
EXECUTIVE SUMMARY

CHAPTER I

Project Review as of 2nd Jan 2014 Site Visit

CHAPTER II

Review Of Funds Deployed as on 31st Dec 2013

PAGE
NOS.
3-6
7 - 10
11 13

Comments & Recommendations

14

Pictures of Site Activity & Update

15

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

Lenders Engineer Report

EXECUTIVE SUMMARY
1.

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 YaragalMadari, 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 2nd
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.

2.

PROJECT INFORMATION
Table no. 1: Project Information
Project Capacity
Project Owner
Project Location
Project Zero Date

3500 TCD Sugar Factory and

18 MW Bagasse Based Cogeneration Power
Project
M/s Shri Balaji Sugars & Chemicals Pvt. Ltd.
(SBSCPL)
Village Yaragal-Madari, Tal. Muddebihal,
District Bijapur, Karanataka
May 2013

Sugar Factory proposed October 2014

Commencement date
3.

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.

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

Lenders Engineer Report

Project progress at major work areas 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.

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

Lenders Engineer Report

4.

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.

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

Lenders Engineer Report

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

Lenders Engineer Report

CHAPTER I
PROJECT REVIEW AS OF 31ST Dec 2013
1.

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.

2.

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 vendors 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 contractors
have been mobilised at site. Each of the civil contractors 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

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

Lenders Engineer Report

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

3.

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.
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.

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

Lenders Engineer Report

ORDERING OF BALACE OF PLANT EQUIPMENTS

RELEASE OF CONSTRUCTION DRAWINGS AND RELEASE OF

INTERCONNECTION DRAWINGS

4.

Vendor drawing review of respective package equipment is in progress.

Vendor drawing review is in progress for structural erection of Boiler,
Turbine and auxiliaries.
ACTIVITIES PLANNED FOR THE NEXT MONTH / QUARTER

5.

Vendor drawing review for balance work as applicable.

Vendor drawing review for P&IDs 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
AREAS ON CRITICAL PATH

6.

The EPC Contract document / agreement submitted by SBSCPL to LE and

have been reviewed and found satisfactory and in line with similar projects.

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.
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 &

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

Lenders Engineer Report

structural work at Bagasse & Coal Handling Plant (CHP) area needs to be
taken up and expedited. Civil contractors 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.

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

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Lenders Engineer Report

CHAPTER II
REVIEW OF FUNDS DEPLOYED AS OF 31st DECEMBER 2013
1.

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.

2.

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

Total

Power
Land & Site Development
Civil Works & Building
Plant & Machinery
Miscellaneous Fixed Assets
Preliminary Expenses
Preoperative Expenses
Contingencies
Working Capital Margin
Total

686
1805
6425
258
13
927
202
574
10890

288
1142
7535
175
9
797
199
120
10265

974
2947
13960
433
22
1746
401
694
21155

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

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Lenders Engineer Report

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

Financing pattern
SBSCPL Margin (30% )
SDF Quasi Equity
FI/Bank Loan
Total

Sugar Plant

Cogen
Power

3267
0
7625
10892

1996
892
7375
10263

5263
892
15000
21155

Table no. 5: Proposed Drawdown Schedule

Sr. no.

Quarter in which Funds are

proposed to be released

1
2
3
4

1st Quarter September 13

2nd Quarter December 13
3rd Quarter March 14
4th Quarter June 14

% of Term
Loan

35%
30%
20%
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

1
2
3
4

Land & Site Development

Building & Civil Works
Plant & Machinery
Preliminary & Pre-operative
Expenses
Total

Project Cost
Incurred
Rs Lakh

939.00
1672.49
2534.42
370.71
5550.86

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

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Lenders Engineer Report

Table no. 7: Means of Finance

Sr. no.

Particulars

1
2

Share Capital
Loan from SDF
Total Equity (A)
Term Loans
Consortium of Banks
Unsecured Loans
Total Borrowings (B)
Total (A+B)

3
4

3.

Amount
Rs Lakh
2806.12
Nil
2806.12
4375.00
Nil
4375.00
7181.12

LIST OF CLEARANCES RECEIVED

i)
ii)
iii)
iv)
v)
vi)
vii)
viii)

ix)
x)
xi)
xii)
xiii)

Gram Panchayat NOC received.

Copy of IEM issued by Ministry of Commerce and Industry.
Proposed Sugar factory installed capacity.
Financial tie ups have been completed.
EPC order for entire project placed with M/s SS Engineers, of Pune
C.F.E from Karnataka State Pollution Control Board received.
EIA received.
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.
Satisfactory Project rating from ICRA.
GoK approval received for 4000 KLPD of water from back waters
of Narayanpur Dam.
Route survey undertaken for right of way for Transmission towers.
Clearance from Sugar Directorate for SDF assistance.
Project clearance from KREDA received.

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

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Lenders Engineer Report

4.

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 systems 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 vendors 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.

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

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Lenders Engineer Report

ACTUAL SITE PICTURES OF ACTIVITIES IN PROGRESS

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

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