Exhibit-AO
0/
NolEN _OC.195GGJEE.24JCIVIU360 0/ C ' , J~" Ap;iI 2017 _
The Hon. Commissioner, , \. ,} ~}If" '
Nashik Municipal Corporation "l ~ '1-f-.d- \tP
G vc:l'''';}>: ~
Rajeev Gandhi Shavan,
Sharanpur Road, 1\1\ ~
(f'
'v0 ~-t~~-4 'Y;;r-.;:!' I'
NASHIK - 422002. \~ \\ ~ (i\\ (!;) (?;/6> .
Sub: Design, Construction, Supply, Erection, Commissioning, Start-up and Perfo'rThance Run1bllowed by
60 months Operation and Maintenance of 70MLD Sewage Treatment Plant and Sewage Pumping
Station at Agar Takali in Nashik City under JNNURM
Ref: 1) T.O, Work Order No. NMC/01/07 dated 2810812007 {'7
, (
This is with reference to and in the context of the subject Contract awarded by the Nashik Municipal
Corporation, That the execution of works and the performance of Contract could not be completed
,within the stipulated date for completion because of various reasons, circumstances and
hindrances which were beyond the control of SPML Considerirtg these reasons of delay, NMC had
extended the c0IT1£I~~igrlEerl2sLfortlJi~roj~_(;t_l!E.,JQ~gLQ$lZQ16~._SPMC-has-completedl"fie'eiime
worJnllltl'i8alTolfed date & even completedthe Performance run of the plant.
SPML had brought to the notice of the NMC that the cOrYJpletion of the Project was delayed due to
unavoidable circumstances and critical hindrances and had pOinted out that because of the delay,
there was additional undue financial burden on SPML Which had a strong negative impact on its
cash flow. The process of approving the drawings, release of payments etc. also got delayed
because of reasons not attributed to SPML
Major factors for impediment toWorl<
1. PLANT COMMISSIONING AND IT'S OPERATION:
On availability of power as made available by NMC, we started operation ofplant9inGll_Oec_2.Qll
and started submission of performance re~1s since._1§.J O'fQllt:ov ~f:J:rQY~~~,J9.I;Ue,§treRQ[t.s
were also submitted, The start of Plant operation was as per NMC requirement. However '.LD
deduction continued andrecovered byNMC upto totalof10%limit,J~PML has not received any
paymen1ITrom-K[MCfbTihe 'pliiht maintenance &operalion since 15.10.2014, which has caused a
major financial loss to the company. As per present tender rates SPML has incurred O&M cost of
Rs 2.25 crore in these 3 years.
After fulfilling the contractual requirements for performance run, we requested NMC to observe
plant operation and to take joint samples of treated effluent for testing from approved laboratory.
We are testing samples daily at our plant laboratory and even tested from outside laboratory
designated by commissioner for 120 days consecutively from 25/03/2016.
We had also successfully operated the plant during the Nasik Kumbh mala periocl within
parameters & without any complaints.
SPML is facing huge financial loss in operating the plant during 2 heavy monsoon years & also due
to the joining of open Nasardi nallah to the incoming Sewer joining the SPS inlet. We flave
intimated NMC earlier also that, we had to face regular breakdown of inlet screens & gates at the
inlet of SPS along with high maintenance of other STP units due to the with
SPML Infra Limited
SPML HOllse, Plot No, 65, 5ector-32 I Gurgaon - 122001 I Haryana
Tel: +91 1243944555 I Fax: +91 1243983201
Email: lIlfo@[Link]
large quantities of sand, polythene, jute bags, twigs, dead animal bodies, big wooden pieces,
trees, hand railing etc. during rainy season. We have intimated NMC also of the damages of inlet
I'!.~reen, sthe:!_e.qu~E!11~nt's and the repair maintenance work which was taken up by us foiltS
operation without any payments from NMC.
Delay in releasing mobilization advance;
The Bank Guarantee with a request to release mobilization advance of 10% of the Contract Value
was submitted on 15-09-200Z. Inspite of repeated requests made the mobilization advance was
released only on 13-03-2008. This delay of nearly six months in releasing the mobilization arvance,
. inspite of mobilization ofillen, materials and equipm-ent-aiSite necessitated us to pay 'heavy finance
charges, since the borrowings towards initial mobilisation had been made in the ope~ market.. The
payment of interest and bank charges resulted in additional financial burden and the. ame was not
envisaged by us and is a factor which contributed to the restrained cash flow. . .
The delay in releasing mobilization advance by nearly six months and its effects on works are not
attributable to us.
Delay in handing over of the area required for the works;
As contemplated earlier, initially Site No. 372 was to be handed over for the construction of both the
Sewage Treatment Plant and Sewage Pumping Station but due to resistance from local people, Mis
NMC changed the Site from Site No. 372 to Site Nos. 6 and 7. The Site was handed over on •.05-04-
~-~'-."-'''''-- --"~"'~--~'~~-"'''--'-'~-~''~- -'''~''':'''';'''-'''<>--
2008 instead ofon3Q;.Dll.::2!lQl. As such no work could be taken up till the handing over of Site i.e.
lIntn·o5~64~2008. Therefore the delay in handing over of Site to an extent of 219 days was beY9nd
ourc.ontr_ol <lllslnolgttrihutable to us. Work could be started completely by Nov 2008 due to heavy
monsoons
Due this delay the original team of staff & subcontractors left the site as there was uncertainty
regarding commencement of work.
This has caused remobilization delays as well as cost.
Delay on account of Obstruction by the local people;
The obstructions to Works persisted till 10-05-2008, although the Site was handed over by Mis
Nashik Municipal Corporation on 05-04-2008. Only after the interference from the Authorities,
Works could be taken up. Hence, the delay of 35 days due to obstructions by local residents was
~-""""-~~-"'-
beyond our control and not attributable to us. .
Interference of Heavy Monsoon Seasons & Landslide
Due to prolongation of the time, SPML encountered three heavy monsoons i.e. during the years
2008 2009 and 2010. Furthermore, there were unprecedented rains during the month of October,
2009 and also for most part of November, 2009. The delays due to rains and to its .aftereffects
considering the type of soil i.e. being encountered at Site, are not attributable to us. We also faced
heavy financial losses due to the idle days Without any work at site in all years till the start of
project.
SPML Infra Limited
SPML House, Plot No. 65, 5ector-32 I Gurgaon - 122001 I Haryana
Tel: +91 1243944555 I Fax: +91 1243983201
Email: Info@[Link]
Adding to the adversaries, prolonged rains in 2010 caused ahea\'Z.J§[Link].9.<8_at Sewage Pumping
station causing heavy material & financial loss to us. Our'SPS-was almost 40% complete at that
time & we had to rework the majority of executed jobs. Re shuttering of steel & Re excavation at
site was due to this calamity. There ~?~ll.Q.J&.QJLillJb!Lar,"§sh,JE'L!() the Government Insurance
claims, which we neverJ§c;§i,\(ed·.:~"--"" '."'-' ......•.. _ « •• - • •- " " . •
r'-"'---~"-'-'--'" " ','
Altogether we lost our materials, one year time span & had to rework the damaged area due to Act
of God which caused additional cost to SPML.
Delay in approval of Drawings;
We submitted our {ir,st design document ( Basic Engineering document - STP & SPS ) on
16.11.2007
, during the land issues and continued with the subsequent submissions. It is to be
observed that at the start of project the communication of approval or comments from your
consultant has taken few months' time and this has been one of the major causative factors for
impediment of the works.
Kind reference is invited to clause 4.16 in volume-2 (page 494) wherein it has been clearly stated
that "The Engineer- in-charge will signify his approval or disapproval of the preliminary phaSe
drawings within 15 calendar days of submission".
Due to the initial delays in the review/comments/approval in the design & drawings from your
consultant, there were subsequent delays in revision & final approval from your consultant:
Approval of final drawings ie Gas Holder & Grit Chamber was given to SPML only in July 2012
which was followed by monsoon till September end 2012. -
Actual extension period of project should tlave been calculated, considering 6 months completion of
the units, after the monsoon. ------._ .. -... - ..... _ .....•
Unavailability of aggregate/sand
The civil work progress was further hampered, even after the approval of all structural drawings as
mentioned above due to the unavail.~~!lL?g9[e.9.(!tel§R.!xLil! JlJecAy- f[Q.!lJ.~.?!lu.a.r~L?22.~· The
crisis was unforeseen & scarcity created due to ban on mi~1~.[Link]§.bln9..!:I~.9~r ins~r~9.ti0t:J.?__().L£[Link],-
This crisis continued till June 2013 which was followe(fbySeasonal monsoon till oct 2013.
Loss due to Price variation
Absence of price escalation under the Contract, was an additional undue financial burden on SPML
which. had a strong negative impact on its cash flow. Price variation under Star rate was only given
com letel only till 24/04/2010. We would like to remma you that till now Price variitiOri-ciTiSTpTpeS
as not yet peeil"awarded:--' z
,
Respected Sir, we have now completed the project work & the performance run of the plant after
heavy financial loss &. facing unprecedented events like landslides, heavy rains etc, We also thank
NMC for their support extended for the work completion at times upon our request & also for
starting the Operation & Maintenance of plant from 01101/2017.
_ _ _ =~""-'_'"<_'"_-"?'~_'" ____ ~'"'_'''.~-~","'' «",,'_. "., ", __ ".,~_ ,_, ,_ '~_, _ . _"_,,_,,,._ '",-e-",_ ",_~"r'<-"-"'" ~ '_' . ". .,- ,_yA"'_<'
SPML Infra Limited
SPMLHouse, Plot No. 65, Sector-32 I Gurgaon· 122001 I Haryana
Tel: +91 124394455.5 ! Fax: +91 1243983201
Email: Info@[Link]
·SPML
Engineering Life
Loss due to Price variation
Considering that SPML has run the plant for 3 years bearing heavy expenses & other factors mentioned
above, the penalty amount withheld from our RA bills are requested fo be released to us. The Bank
Guarantee security given by us for releasing. LD charges eq uivalent to Rs. 2.138 Qc~ 0.648 Cr, is also
request~ to be released. The Finarstlffias yet nol1;eerrEirrrvea~arafra7efou·tBG are being 'invoked
We have suffered losses more .than the tender amount and our payments have been done with
un contractually Freezing the Indices of 2010 inspit<il of various hindrances not attributable to ;.1:'.
Freezing of indices is illegal as per contract law.
Sir, we earnestly request you (0 examine the above for payments of our bills after defreezing the indices ,
payments for our plant operation and maintenance from Jan 2014 till date.
In lieu of the above it is also pertinent to mention that NMC since the start of the project has delayed our
payments most of the times we have successfully executed and commissioned such large project even
after suffering huge losses.
Hon, Sir we earnestly request you reexamine and give us Justice as we understand thaUhe department
has also invoked OUf Bank Guarantee without giving us an opportunity of hearing and witholl! even
processing the final RA bills.
SPML INFRA LlMITED
GIN; L40106DL1981PLC012228
22, Camac Street, Block - A, 3rd Floor, Kolkata - 700 016
rei; 91-033-40091200, Fax No. ; 033· 4009 1303.
E-mail :info@spmJ,[Link], Website; [Link]
Regd. Office: F·27/2, Qkhla Industrial Area, Phase·lI
New Delhl-i10020
.SPML
Engineering Life
It is also pertinent to mention that we are Operating and maintaining the plant in such dire circumsta0ces
as our O&M is for 5 years as per tender specification.
We again earnestly request you to resolve our long pending issues and reexamine the decision of
invocation of our SG as it damages our image In front of our bankers.
Thanking and assuring you of our best services at all times.
YouJ:S truly,
For SPML INFRA LTD.
~. .
AUTHORISED SIGNATORY
Cc: The Superintendant Engineer ,Water Supply and Sewerage Department, Nash/k
. Cc: The Executive Engineer, Water Supply and sewarage Department, Nash/k
..
~
SPML INFRA LIMITED
CIN: l40106DL1981PLC012228
22, Camac Stree~ Block - A, Srd Floor, Kolkata . 700 016
. Tel: 91-033-4009 1200, Fax f\lo. : 033- 4009 1303
E-mail: info@[Link], WebsiEe : [Link];ln.
Regd. Office: 1'-27/2, Okhla IHdustrial Area, Phase-il
New DelhHl0020
