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US riders keeping Bhel out of growing gas turbine markets

US riders keeping Bhel out of growing gas turbine markets
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First Published: Thu, Apr 02 2009. 10 48 PM IST
Updated: Thu, Apr 02 2009. 10 48 PM IST
New Delhi: State-owned Bharat Heavy Electricals Ltd, or Bhel, says it is unable to tap vast and expanding demand for gas turbines in markets such as Iran, Myanmar, Sudan and Syria because of a ban by the US on export of its technology to those countries.
Bhel currently gets gas turbines from US conglomerate General Electric Co., or GE, which has also transferred some technology to Bhel for which the public sector firm pays royalty.
“There is a huge demand for gas turbines in Iran and other countries. Iran has the world’s second largest oil and natural gas reserves,” said a senior Bhel executive who didn’t wish to be identified. He added that the tie-up with GE prevented Bhel from supplying gas turbines to such markets.
Another Bhel official also said the tie-up with GE stops Bhel from exploring markets where the US has banned export of its technology. He also declined to be identified.
India has been trying to diplomatically engage Iran, a country with which it enjoys centuries-old trade and cultural relations. New Delhi has in recent times expanded cooperation with Tehran in a number of key areas, including counterterrorism, regional stability, and energy security. It sees Myanmar as a strategic ally in the region.
A GE spokesperson refused to comment on the ban in an email response. “GE and Bhel have a technology association and licensing agreement, vide which GE has licensed its gas turbine technology to Bhel for manufacturing in India,” the email said.
Experts say Bhel’s priorities have clearly changed since it entered the tie-up with GE.
“The domestic gas turbine market is dominated by Bhel due to the technology tie-up with GE. Exports were never a consideration when this tie-up was made. One needs to be realistic about these things,” said Shubhranshu Patnaik, an analyst at consultancy PricewaterhouseCoopers.
Of Bhel’s order book position of Rs1.25 trillion, global orders account for around Rs7,500 crore.
While gas turbines are used in power projects based on gas or naphtha as fuel, steam turbines are used in projects that use coal as fuel. On steam turbines, Bhel has an arrangement with Siemens AG. GE and Siemens are major rivals globally.
India is trying to improve its diplomatic and economic ties with countries such as Sudan and Myanmar as they have rich hydrocarbon deposits, which India needs. But these countries have come under intense international criticism due to cases of genocide and human rights violations.
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First Published: Thu, Apr 02 2009. 10 48 PM IST