Larsen and Toubro Ltd (L&T) is close to inking a deal with Japan’s leading power-generation equipment manufacturer, Toshiba Corporation, to set up a facility for manufacturing turbines in India that may entail an investment of Rs2,250 crore.
At present, public sector firm Bharat Heavy Electricals Ltd (BHEL) is the only company that manufactures turbines in the country of comparable capacity—660MW and 800MW.
“L&T has not yet formally announced their tie-up with Toshiba as it is in finalization stages,” an external spokesperson for the company said in an email response.
L&T has, in anticipation of the deal, already started doing the rounds of the power project developers in the country to tie up future orders.
Shubhranshu Patnaik of Pricewaterhouse Coopers, an accounting firm, welcomed the move and said, “India needs competition in the power equipment manufacturing sector as it will lower costs. The proposed move also spells good news for the power project developers as they can get better rates from the equipment manufacturers. As compared to India’s only power-generation equipment manufacturer BHEL, China has four companies. This is the reason for China adding five times the power generation capacity as compared to what is being added by India every year.”
At present, India has an installed power generation capacity of 1.28 lakh MW.
Of the added 41,110MW power generation capacity that was envisaged at the start of the 10th Plan period, only 23,250MW is expected to be added by the end of this financial year. Part of the shortfall has been attributed to shortage of power generation equipment in the country.