New Delhi: In a first of its kind, Bharat Heavy Electricals Ltd (Bhel), India’s largest manufacturer of power generation equipment, will partner with the private sector for setting up a power generation project.
The other partners for the 250MW power project to be set up in Cachar district of Assam, at an investment of around Rs1,250 crore, are Engineering Projects India Ltd (EPIL), PTC India Ltd and Gopal Energy Pvt. Ltd (GEPL).
Engineering Projects is a public sector firm.
“We are working on the details of the project,” Bhel chairman and managing director K. Ravi Kumar said.
While Bhel will be the main equipment supplier for the project, it will also take equity stake in the projects along with others.
A PTC executive, who did not want to be identified, confirmed the development and said, “We have been approached for our participation. We are ready for it provided that the price of power is marketable.”
Executives at the other two firms couldn’t immediately be reached for comment.
Initially, this project will have a capacity of 125MW which will subsequently be expanded to 250MW. The coal linkage of around 1.5 million tonnes per annum to the project will be provided by Coal India Ltd.
Bhel has been increasingly looking at opportunities where it can not only generate steady orders for the firm, but also potentially block out emerging rivals. It has already worked out joint venture (JV) arrangements in the public sector, such as its attempt to set up JVs with state government institutions in Maharashtra, Orissa and Uttar Pradesh as reported by Mint on 16 January.
The company has already formed a JV with the Tamil Nadu Electricity Board.
Meanwhile, on the equipment supply front, Bhel has increasingly come under criticism for delays in supplying power generation equipment for projects. This, in turn, led to delays in commissioning such projects.
“The company has already been blamed for its inability to meet its order commitments. In such a situation, how it meets the new requirements is left to be seen,” said K. Ramanathan, fellow at The Energy and Resources Institute.
Bhel aims to become a $10 billion-plus (Rs39,500 crore) company by 2011-12 with a 15,000MW equipment manufacturing capacity by the end of next year.
The company has a current manufacturing capacity of 10,000MW.
The company plans to manufacture equipment totalling 56,000MW by 2012. Ithas an order book position of 31,923MW and 9,775MW of extra equipment from unused stock.
Bhel posted a net profit of Rs2,815 crore on revenue of Rs21,608 crore in 2007-08 and ended the year with an order book position of Rs50,265 crore.