Chinese power generation equipment manufacturing majors such as Dongfang Electric Corp. and Harbin Power Engineering, are competing along with Skoda Power, Bharat Heavy Electricals Ltd (Bhel) and Desein Pvt. Ltd for the $1 billion (Rs4,040 crore) engineering procurement construction (EPC) order floated by Navabharat Power Pvt. Ltd for its 1,040MW project in Orissa. Navabharat Power is a special purpose vehicle floated by the Hyderabad-based Malaxmi Group and Nava Bharat Ventures Ltd, to develop the thermal power project.
“We may later ramp up the project capacity to 2,240MW. Their bids are based on international competitive bidding guidelines and we plan to shortlist the EPC contractor by end July or early August,” said Y. Harish Chandra Prasad, chairman, Malaxmi Infra Ventures (India) Pvt. Ltd.
Overseas power generation equipment manufacturers have evinced interest in participating in these projects as India plans to add 78,000MW of additional capacity by 2012.
Power sector analysts believe that competition for Bhel in the power equipment manufacturing sector will lower costs.
Says Hitul Gutka, an analyst at India Infoline: “Competition from overseas players such as Dongfang and Harbin is primarily going to come for Bhel and it therefore needs to expand its capacity rapidly.”
The Orissa project may need an investment of Rs4,160 crore and Navabharat group plans to dilute up to 49% in the subsidiary to raise Rs580 crore to part-finance the project. Overseas power companies, such as Suez Energy International, are looking to acquire a stake in Navabharat Power as reported by Mint on 4 June.
Navabharat Power has already arranged for Power Finance Corp. to issue debt and Power Trading Corp. has agreed to buy all the power generated at the plant, in Dhenkanal. “All the statutory approvals for the project are in place,” Prasad added.
The Navabharat group is also setting up a 540MW coastal thermal power project through its Simhapuri Energy Pvt. Ltd and another Hyderabad-based infrastructure firm, Madhucon Projects Ltd.