Rs40,000 cr power equipment tender to be floated on 18 Oct

Rs40,000 cr power equipment tender to be floated on 18 Oct

New Delhi: India’s efforts to generate clean power, and do so more efficiently, could get a fillip with state-owned power generation utility NTPC Ltd getting ready to issue a Rs40,000 crore tender for the supply of so-called super-critical power generation equipment for its proposed projects and those of Damodar Valley Corp. (DVC). on 18 October.

Super critical equipment, apart from being environment-friendly, help increase plant efficiencies.

The order, the largest such single one, will be for the supply of 11 boilers and 11 turbines of 660MW each. Bids will be opened by January 2010 and the orders will be placed by April next year. Of these, nine units will be for NTPC and two for DVC.

“We plan to issue the notice inviting tenders on 18 October. While the power ministry’s approval has already been received, we are waiting for the Central Vigilance Commission’s approval," said a senior NTPC executive who did not want to be identified.

CVC oversees the functioning of government agencies and state-owned companies. The cabinet committee on infrastructure has already given its approval to the tender, which should bring some cheer to the capital goods industry and the power sector.

The order will be placed through international bidding, with a stipulation that the winner set up manufacturing facilities in the country.

The bid formula will work thus: the lowest bidder for boilers will be given an order for six units. If Bharat Heavy Electricals Ltd (Bhel) is the lowest bidder, it gets the order for six units. If it is not, the government will still award it the order for the remaining five units (of the 11), provided it agrees to match the lowest bid. If Bhel does not match the bid, an option will be given to others in the order of bid ranking. A similar system will be followed while ordering for the turbines.

A second NTPC executive, who also declined to be identified, confirmed the plan for bid award process and said, “the bid documents have been finalized."

Mint had reported on 16 June that the government’s agenda for its first 100 days in office that ended 29 August included this proposal.

Analysts Mint spoke termed the order a significant one and described it as part of India’s attempt to launch a super-critical power programme along the lines of similar efforts in the US, Japan, Germany, Korea and Russia.

Apart from Bhel, private sector consortia 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.

“It (the order) is important for equipment manufacturers such as L&T, Toshiba and others who are entering the sector. Bhel stands to gain as there is an assurance of a minium order," said Madanagopal R., an equity research analyst at Mumbai-based brokerage Centrum Broking Pvt. Ltd.