Chinese power generation equipment manufacturer Harbin Power Engineering and Desein Pvt. Ltd, an Indian consultancy and turnkey contracting organization, have won a Rs3,350 crore order from Navabharat Power Pvt. Ltd for its 1,050MW thermal power project in Orissa.
Last month, the government had said it plans to restrict overseas equipment manufacturers from bidding for Indian projects unless they have a manufacturing base here. Harbin Power Engineering doesn’t have a local unit.
Navabharat Power is a company floated by the Hyderabad-based Malaxmi group and Nava Bharat Ventures Ltd, specially to develop the project. It also has plans to ramp up the capacity to 2,240MW later.
“The boiler turbine generator (BTG) package has been given to Harbin Power while the engineering procurement construction (EPC) work has been awarded to Indure, a Desien group company. The letter of intent was issued around two months ago. While Harbin will supply the boiler, turbine and generator for the project, Desein will take care of civil construction work along with ash handling equipment, material-handling equipment, water treatment plant, among others,” said a person close to the development, who did not wish to be named. Y. Harish Chandra Prasad, chairman, Malaxmi Infra Ventures (India) Pvt. Ltd, a group firm, declined to comment. The BTG package comprises 40% of the cost of the total project with the balance being the EPC package.
N.P. Gupta, president, Desein group of companies, and managing director, Indure, confirmed the development.
Harbin Power could not be immediately contacted.
The other players in fray were Dongfang Electric Corp., Skoda Power and Bharat Heavy Electricals Ltd (Bhel) as reported by Mint on 20 July.
Mint had also reported on 10 April, the government’s plan to restrict overseas players to increase the power generation equipment manufacturing capacity within the country.
While the decision may come as a dampener for overseas companies, particularly those from China, which have been pretty active in the Indian power sector, it would mean immense benefits for Indian players such as Bhel and Larsen and Toubro Ltd.
“The power developers want to keep their options (on foreign and local suppliers) open as most of them work on least cost basis. The Chinese equipment works out to be the most cost-effective,” said Anish De, chief executive officer at Mercados Asia, an energy consulting firm.
The Navabharat group also plans to dilute up to 49% in the subsidiary to raise Rs580 crore to part-finance the project.
Navabharat Power has already arranged for Power Finance Corp., the public sector lender to the sector, to issue debt. Power Trading Corp. has agreed to buy all the power generated at the plant at Dhenkanal in Orissa. The group is also setting up a 540MW coastal thermal power project through its unit Simhapuri Energy Pvt. Ltd and Hyderabad-based infrastructure firm Madhucon Projects Ltd.