Home / Companies / Bhel delays holding up power projects: CEA review

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."

“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 Bhaskar

"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout