Chimney Collapse Claims 39 Lives at Bharat Aluminium Company's 1,200-Megawatt Korba Site

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Researched by Industrial Info Resources (Sugar Land, Texas)--The death toll in the chimney collapse at the 1,200 MW power plant site being developed by Bharat Aluminium Company Limited (BALCO) (New Delhi) at Korba, Chhattisgarh, has risen to 39. Rescue officials have indicated that 36 bodies have been identified. The accident occurred when the 100-meter chimney, which was under construction, collapsed, claiming 20 lives instantly. Bad weather, heavy rains and lightning strikes have been identified as the possible reasons for the mishap. Officials are not ruling out the possibility of workers lying trapped under the debris. A formal list of workers is unavailable, hampering the identification process.

In 2007, BALCO, a wholly owned subsidiary of Vedanta Resources plc (LSE:VED) (London, England), awarded the construction contract for the Korba power plant to Shandong Electric Power Construction Corporation (SEPCO) (Jinan, China). As part of the agreement signed with BALCO, SEPCO commenced with the first phase of construction, which will consist of five units of 135 megawatts (MW) each. Gannon Dunkerley & Company Limited (Mumbai) secured the subcontract from SEPCO to build the chimney.

SEPCO is one of China's premier engineering, procurement and construction companies, specializing in erection, installation and commissioning of power plant equipment. The company, which is focusing on global contracts, has developed about 15 power projects in Nigeria, Hong Kong, India, Brazil and Indonesia. SEPCO currently employs about 11,487 people worldwide. Gannon Dunkerley is a leading name in the civil construction industry in India. Established in 1918, the company has executed several large-scale construction contracts in the cement, pharmaceutical, iron and steel, chemicals and fertilizers, power, textiles, and hydrocarbons sectors.

The Korba power project is part of Vedanta's ambitious capacity augmentation program across its metals and power businesses. The group is expected to invest about $14.47 billion to augment the capacity of aluminum and zinc smelters in India, acquire mineral assets in Africa and Central America, and develop power plants in India. About $10.7 billion of the proposed investment will be spent on projects in the power sector. Over the next year, there are plans to invest about $4.06 billion to develop 4,500 MW of power generating capacity in India. These projects are part of Vedanta's strategy to increase the company's power generating capacity to 11,000 MW by 2012.

Legal experts have observed that in the case of the BALCO chimney accident, since the power plant has not started operations, the liability will rest entirely with the contractors. BALCO and the contractors could face legal action, if there is evidence that the accident occurred due to negligence or use of sub-standard materials.

The state government of Chhattisgarh is investigating the project approvals and background of the contractors. BALCO has stated that all necessary regulatory approvals and clearances had been obtained before the project commenced. However, Lakhanlal Dewangan, the mayor of Korba, has alleged that Municipal Corporation clearances had been obtained only for the construction of one chimney, which has been commissioned. There have been no clearances sought or provided for the second chimney. The accident took place during the construction of the second chimney. BALCO has refuted these allegations, claiming that it received approvals from the state government after signing a memorandum of understanding to construct the power plant.

According to reports, local resentment against the construction companies is growing. SEPCO officials employed at the Korba have left the plant site, fearing local outrage. About 76 SEPCO employees have now been moved to Kolkata and Mumbai, and will remain there until the situation in Korba is brought under control.

Recently, Gammon India Limited (BSE:509550) (Mumbai), which is building the Delhi Metro project, was blacklisted for two years after it was found that the company had not adhered to safety measures. Six people lost their lives when a bridge, which was part of the Delhi Metro project, collapsed during construction. In 2007, a bridge constructed by Gammon India in Hyderabad collapsed, killing two people.

Cases of industrial mishaps and accidents are increasing in India. The country's fast-paced economic growth is putting a lot of pressure on developers to ensure timely completion of urban infrastructure and industrial projects. Construction companies are able to get away with flouting regulatory and safety norms due to the country's weak legal framework.

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