Fresh stimulus as UPA clears large power sector order

Fresh stimulus as UPA clears large power sector order

New Delhi: In a move that will provide a fillip to the capital goods industry and the power sector, the Congress-led United Progressive Alliance (UPA) government will be placing a Rs40,000 crore order for the supply of power equipment to state-run NTPC Ltd and Damodar Valley Corp. (DVC).

The cabinet committee on infrastructure took the decision on Thursday, setting the stage for NTPC, India’s largest power generation utility, to invite tenders for the purchase of 11 boilers and 11 turbines of 660MW each within 45 days. Of these, nine units will be for NTPC and two for DVC.

The order will lead to “rapid capacity addition in the country, transfer of super critical technology and development of indigenous manufacturing capacity", said a press note of the government.

Such so-called super critical equipment, apart from being environment-friendly, helps increase plant efficiencies.

Mint had reported on 16 June that the government’s 100-day agenda included this proposal.

“The order will be a huge boost for the Indian manufacturing sector and the power sector. It will also help in establishing super-critical technology in the country," said K. Ravi Kumar, chairman and managing director, Bharat Heavy Electricals Ltd (Bhel).

Private sector joint venture firms expected to participate in the tender include Toshiba Corp. of Japan along with JSW Group; Ansaldo Caldaie SpA of Italy and GB Engineering Enterprises Pvt. Ltd; and Larsen and Toubro Ltd and Mitsubishi Heavy Industries Ltd of Japan.

“Bhel would be the primary beneficiary which would minimum get orders for five sets out of total 11 sets to be tendered under bulk route, this should help the company achieve more than targeted Rs55,000 crore order inflow for the year FY10," said Madanagopal R., an equity research analyst at Mumbai-based Centrum Broking Pvt. Ltd, said.

In addition, the cabinet committee on economic affairs (CCEA) on Thursday gave its assent to an empowered committee of secretaries (eCoS) set up for International Coal Ventures Pvt. Ltd, to also consider the overseas acquisition plans of Coal India Ltd, India’s largest coal miner.

In another development, CCEA has given its in-principle approval to the department of telecommunication’s proposal to allow Telecommunications Consultants India Ltd (TCIL) to exit from the Rajasthan-based telecom operator Bharti Hexacom Ltd.

Bharti Hexacom is a joint venture with Sunil Mittal promoted Bharti Airtel Ltd holding 70%; TCIL had invested Rs106.02 crore for its stake.