Czech power company Skoda Power AS is setting up a turbine manufacturing facility at Hyderabad at an investment of around Rs2,000 crore.

The company’s representative in India confirmed the development but, despite repeated attempts, did not elaborate on additional questions sent by email.

The facility, to be set up in four phases, will be completed by 2011 and would help the power generation sector on the equipment supply front, as India has been coping with shortfalls in power generation equipment.

A Skoda backpressure extraction steam turbine

The factory will also manufacture power equipment, such as casings and auxiliaries.

This is the third company, after AnsaldoCaldaie Boilers India Pvt. Ltd and Larsen & Toubro Ltd that has recently entered the power generation equipment manufacturing sector in India.

Notes Shubhranshu Patnaik, an executive director at audit firm PricewaterhouseCoopers: “Such facilities are required. The issue is whether they can still be competitive in an Indian scenario. That is the challenge. One needs to book capacities upfront to break even."

Owing to the potential that the power sector offers for gro-wth, firms such as Toshiba Co-rp., Hitachi, Dosan, General Electric Corp, LMZ and Technoprom (both from Russia) and Dongfang (China) have evinced interest in setting up manufacturing facilities in India. The power ministry is of the view that Bharat Heavy Electricals Ltd (Bhel), the country’s largest manufacturer of power generation equipment, does not have the capacity to meet the government’s ambitious targets and it would require private manufacturers to fill the gap.

Skoda is already present in the Indian power sector through Skoda Power Ltd, and offers a range of services for power projects, including, overhauls, spare parts and technical assistance.

Some of its clients include NTPC Ltd, Punjab State Electricity Board, Tamil Nadu Electricity Board and Reliance Industries Ltd.