Bhel emerges as sole bidder in NTPC’s Rs2,640 cr boiler order

Bhel emerges as sole bidder in NTPC’s Rs2,640 cr boiler order
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First Published: Mon, Feb 04 2008. 12 04 AM IST
Updated: Mon, Feb 04 2008. 12 04 AM IST
India’s largest manufacturer of power generation equipment, Bharat Heavy Electricals Ltd (Bhel), has emerged as the sole bidder for a Rs2,640 crore boiler order for stage II of NTPC Ltd’s 1,320MW Barh project.
At one stage, Bhel was competing with Doosan Heavy Industries and Construction Co., Ltd, which eventually dropped out.
Competition for the project was limited as there is a shortage of power equipment manufacturers with additional capacity.
This is not the first time that Bhel has emerged as the sole bidder. It had similarly topped the bids for the Andhra Pradesh government’s 1,600MW power project at Krishnapattnam, as reported by Mint on 8 November. It had done so despite the presence of South Korea’s Doosan and Japan’s Toshiba Corp.
In addition, NTPC has also sought bids for boilers for its North Karanpura project with a capacity of 1,980MW and turbines for Barh stage II and North Karanpura.
NTPC has extended the bid period for this phase until April, since other competing companies such as Doosan, Toshiba, Hitachi Ltd and ABB Alstom Power sought more time to bid.
“The (boiler) order (for Barh), which is yet to be awarded to Bhel, is for two units of 660MW each. Since the rest of the bidders had asked us for an extension for the remaining order, we have decided to extend the deadline,” a senior NTPC executive, who did not wish to be identified, said.
A senior Bhel executive, who did also not wish to be identified, said: “The other bidders only want to delay the order since they do not have the required specifications. We are quite confident that we will get the remaining order as well.”
Earlier, while bidding for the Andhra Pradesh project, bidders had sought a similar extension, but later opted out of the bidding.
The Barh order is part of NTPC’s planned capital investment of Rs1.6 trillion by 2012. It is being set up as inter-regional power station in Bihar and will supply to the eastern, western, and northern regions in the country.
The company has an overall plan of placing orders for five units of 660MW for boilers and turbines. While Bhel and Doosan are vying for the remaining orders for boilers in North Karanpura, Toshiba, Bhel, Alstom and Hitachi are competing for turbines.
Demand for power generation equipment in India is expected to grow rapidly as the country seeks to add 78,000MW of generating capacity in the next four years. India currently has a generating capacity of 135,000MW, to which NTPC expects to add 22,596MW.
The short supply of power generation equipment in the country has been identified as the primary reason behind the slow growth in power generation capacity.
Chinese companies such as Dongfang Electric Corp. use technology from Alstom SA for boilers and Toshiba for turbines, and have a current manufacturing capacity of 31,000MW per year. Bhel has enhanced its capacity to 10,000MW, and proposes to ratchet this up to 56,000MW by 2012.
Bhel has technical collaborations with Alstom and Siemens, who are both pioneers in the field of supercritical technology for manufacturing boilers and turbines, respectively. The company posted a net profit of Rs2,385 crore on revenue of Rs18,702 crore in 2006-07, and ended the year with an order book position of Rs35,633 crore.
“Power generation equipment manufacturing capacities are running to capacity all over the world. The problem with the Chinese companies is that they cannot meet NTPC’s specifications. This, in turn, has helped Bhel,” a Mumbai-based analyst, who did not wish to be identified, said.
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First Published: Mon, Feb 04 2008. 12 04 AM IST
More Topics: Bhel | NTPC | Boiler | Toshiba | Hitachi |