M. Ramesh

Tiruchi, July 4

BHEL intends to spend Rs 1,000 crore on capacity building over the next two-and-a-half years, the company's Chairman and Managing Director, Mr A.K. Puri, told journalists here on Monday. He said that the money would be spent on enlarging the product range and on R&D. The company intends to introduce higher capacity power plants, both in thermal and hydro sectors. It will introduce 800 MW plants for thermal projects, including the hi-tech `super critical' variety, for which the company is negotiating a technology tie-up with an overseas company.

As regards R&D, Mr Puri said that BHEL had budgeted for a Rs 200-crore R&D spend for the current year, up from Rs 110 crore last year. He said that the spends will increase further over the coming years.

Asked if BHEL would give suppliers' credit to its customers, Mr Puri said that BHEL did give credit selectively. However, he pointed out that Power Finance Corporation and Rural Electrification Corporation, both public sector finance companies, were flush with funds.

On business from `renovation and modernisation' of existing power plants, Mr Puri said that BHEL's order book grew from Rs 1,000 crore to Rs 1,500 crore last year. While pointing out that about 30,000 MW of power capacity needed renovation and modernisation (R&M), he observed that many electricity boards had not wanted to shut down plants for R&M activities until recently. Asked if BHEL was being pushed out of competition by tender conditions designed to favour overseas companies, Mr Puri said that "such aberrations" took place from time to time, but by and large BHEL had been able to win most of the projects that came under competitive bidding.

Mr Puri was here in connection with the Leadership Summit 2005, an event being held to mark BHEL, Tiruchi's completion of 40 years. Many past heads of BHEL, Tiruchi, including Dr V. Krishnamurthy, the Chairman of National Manufacturing Competitiveness Council, were here for the function.

(This article was published in the Business Line print edition dated July 5, 2005)
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