New Delhi: After acquiring capability to manufacture power generation equipment, Larsen & Toubro Ltd (L&T), India’s largest engineering company, plans to make another attempt at landing 4,000MW ultra mega power projects.
“We are going to bid for indigenous coal-based projects in Bihar and Orissa. We are going to bid for the Krishnapattnam project. We have strengthened the power group to work as a developer and also provide the engineering, procurement and construction (EPC) services,” K. Venkatramanan, president, engineering and construction projects, and a member of the L&T board, said.
The company did not have a key boiler manufacturing tie-up in place, nor was it close to a deal for turbines when it had quoted a rather high tariff of Rs2.251 per unit for the Sasan ultra mega project. The project eventually went to Reliance Energy Ltd, which bid Rs1.19 per unit in the second round.
Since then, L&T has entered into a joint venture with Mitsubishi Heavy Industries Ltd to set up a Rs750 crore manufacturing facility for super-critical boilers, which will have an annual production capacity of 3,000-4,000MW. L&T is also close to inking a deal with Japan’s leading power-generation equipment manufacturer, Toshiba Corp., to set up a facility for manufacturing super-critical technology turbines in India. The deal may entail an investment of $80 million by the engineering major.
So, this time around, L&T could be in a position to be far more competitive with its bid as it can potentially use its own power equipment division to supply the project. For Krishnapattnam, which is in Andhra Pradesh, L&T is again likely to face competition from NTPC Ltd, Reliance and DS Constructions, among others.
Of the nine ultra mega power projects planned so far, the government is already poised to axe four projects with a combined capacity of 16,000MW as reported by Mint on 10 August.
Krishnapattnam is one of the remaining projects among others such as Sasan (Madhya Pradesh), Mundra (Gujarat), Tilaiya (Jharkhand), and Jharsuguda (Orissa) and may involve an investment of around Rs20,000 crore. At present, the country has an installed power generation capacity of 128,000MW, and plans to add around 78,000MW by 2012.
The company has already formed L&T Power Projects Ltd and L&T Power Development Co. While L&T Power Projects will be the investment arm for hydro, nuclear and thermal power projects, the other subsidiary will execute coal-fired and multi-fuel power plants.