The Hindu Business Line : Delay in ancillary projects may derail power capacity targets

New Delhi, June 27 Tardy progress on award of ancillary projects accompanying upcoming thermal power stations could end up playing spoilsport to the Centre’s power capacity addition target for the current Plan period.

While the Government has been focussed on expeditious placement of main plant equipment orders to minimise slippages in the current Plan period’s capacity addition target of 78,577 MW, the award of the ancillary units, collectively termed as balance-of-plant (BoP) packages, are trailing badly for thermal projects slated to come up during the current Plan.

Till mid-June 2008, BoP packages for over 45 per cent of the thermal projects slated to coming up during the current Plan are still to be placed with suppliers.

Thermal projects are the mainstay of the capacity addition during the Eleventh Plan, forming nearly 75 per cent of the total capacity of 78,577 MW being targeted during the five-year period. Delays in placement of BoP packages, which unless done in tandem with the main plant order, can hold up a project and slow progress on BoP packages, have been singled out as among the biggest reasons for slippages witnessed in the last Plan period.

Reasons for delay

Inadequate numbers of BoP equipment suppliers, besides lacklustre response from existing players, are among the key reasons cited for the slow progress in the award of BoP packages.

“Besides the main plant equipment, unless BoP packages are awarded in tandem with the main plant order, the project is most certainly destined to be held up.

Till the last nut and bolt is in place, the project cannot get commissioned.

What we need is a number of medium scale players who can supply stuff.

At present, there are very limited vendors for each of the BoP packages and at times only a single quotation is received,” a senior NTPC official said.

Foreign vendors

While the number of qualified vendors are not commensurate with the large capacity addition programme, as is planned for the current Plan period, there is also a very limited participation from foreign vendors in BoP packages, Power Ministry officials said.

They said that there was an urgent need for enhancing design and manufacturing capacity of auxiliaries such as high capacity mills, fans and pumps, and material and ash handling systems.

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