The Hindu Business Line : ‘More players need to enter power equipment biz’

Mumbai, Sept. 3 The country needs five more companies like Bharat Heavy Electricals Ltd (BHEL) in the power equipment manufacturing business to meet the Eleventh Plan’s target capacity addition of 78,000 MW, said Mr Sushil Kumar Shinde, Union Minister for Power.

Mr Shinde was talking to the media on the sidelines of an industry event recently.

The Ministry observed that across the country the capacity addition slippages were 100 MW to 500 MW every fortnight due to delay in procuring equipment. Therefore, there is need for more manufacturing capacity, which can come up even through foreign joint ventures, Mr Shinde said.

Power shortage

The Parliamentary Standing Committee on Energy in April had expressed concern over the critical power situation in the country and the failure to achieve Tenth Plan targets due to shortage of power plant equipment. It had recommended exploring the possibility of allowing the National Thermal Power Corporation and other players to enter the equipment manufacturing business.

Mr Shinde said that the Power Ministry had even allowed international competitive bidding in this area. The country ‘should not suffer’ because of lack of equipment. The recent joint venture between Larsen & Toubro and Mitsubishi Heavy Industries Ltd of Japan is a welcome step in this direction, he said.

He added that the companies wanting to invest in power equipment business need not worry about work orders. With large power generation projects in the pipeline there will be a lot of opportunities in the business.

Tight order book

Mr Pradeep Dhamdhere, analyst with ASK Securities, said BHEL had been overwhelmed with orders only in the last two years, for which the company had not planned any capacity addition. Tight order book position is bound to stay for a few years. Therefore, more players are needed in the market. The Government should push for more international players for setting up manufacturing facilities by offering them incentives, he said.

“In the future, orders in the power equipment business would be dominated by super critical technology where BHEL has no expertise. The country needs experienced players in this area,” Mr Dhamdhere said.

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