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Bhel delays holding up power projects: CEA review

Bhel delays holding up power projects: CEA review
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First Published: Sat, May 23 2009. 12 04 AM IST

Updated: Sat, May 23 2009. 12 04 AM IST
New Delhi: At a time when India faces an electricity shortage of 12% during peak demand, getting power plants online has been postponed by as much as eight months due to delays by Bharat Heavy Electricals Ltd (Bhel), the Central Electricity Authority (CEA) has found.
The country’s top power sector planning body has found in a review that the delays—ranging from one-eight months— happened because Bhel could not supply turbines, boilers and generators on time, among other reasons.
“All projects are getting delayed. While the industry is ramping up production, it does not take any advance action until there are firm orders. This results in a time lag. We are passing through this period,” said a CEA official, who declined being named. “Bhel is in the process of capacity building.”
Bhel, the country’s largest power equipment maker, has an annual capacity of manufacturing machines that can produce 10,000MW of electricity. The company says it plans to raise this to 15,000MW a year by December. India?has a power generation capacity of 147,000MW and plans to add 78,577MW by 2012. Of these, orders for a capacity of 42,431.58MW have been placed with Bhel.
“There is a shortage of skilled manpower at the sites for the contractors. On the BOP (balance-of-plant) equipment front, the vendors are limited. Whether it is us or our customers, the projects are getting delayed,” said K. Ravi Kumar, Bhel’s chairman and managing director.
Missing power generation targets isn’t new to the country. In the five years to 2007, the country missed its target of adding 41,110MW by 49%. Mint had reported on 28 August that India would achieve only 40-46% of the 11th Plan capacity addition targets. The country added only 9,300MW of generation capacity in 2007-08, against a target of 12,000MW. In 2008-09, it added only 3,454MW, against a target of 11,061MW.
“The situation will only ease in the last year of the 11th Plan. Bhel is adding capacity in a phased manner. We should see a capacity addition this year if there are no constraints,” said Madanagopal R., an equity research analyst at Centrum Broking Pvt. Ltd. “The BOP situation is expected to ease due to a serious slump in the real estate sector. Due to this, a lot of manpower will flow into the system to undertake civil work.”
The CEA review also found out that there have been delays in deploying required construction machinery as these were in use in other units of a project. This delay in erection or commissioning of one unit leads to the delay of another unit to which the construction machinery has to be moved.
“It was also seen that at a number of projects, supply of rotor assembly of turbine is critical and may result in commissioning delays,” said a government official aware of the development, who didn’t want to be named.
“There are some turbine delays expected in 2010-11, but we are finalizing sourcing from other overseas markets,” Ravi Kumar said.
utpal.b@livemint.com
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First Published: Sat, May 23 2009. 12 04 AM IST