Our Bureau

Chennai, July 1

The Chennai-based BGR Energy Systems Ltd on Tuesday announced it had won an ‘engineering, procurement, construction’ contract from Tamil Nadu Electricity Board (TNEB). The job, worth Rs 3,100 crore, is for building a single unit of 600 MW, coal-based power project at Mettur, Tamil Nadu.

BGR Energy has won the contract over the public sector power equipment major, BHEL, which was the only other bidder in the international tender.

The boilers, turbines and generators will be supplied from Dongfang, the Chinese power equipment manufacturer.

The ‘balance of plant’ will be produced in-house by BGR Energy. The project includes the installation of a ‘gas insulated substation’, which will also be imported.

Addressing a press conference here, Mr B.G. Raghupathy, Chairman and Managing Director, BGR Energy, said the value of materials and services provided “in-house” is about Rs 1,500 crore (rest being ‘bought-out’).

Project Details

The project is to be commissioned within 39 months, with penalties for delay, but no incentives for earlier production.

Dongfang’s contribution is worth $221 million. TNEB will pick up the adversities or advantages of fluctuations in exchange rate as well as changes in customs and excise duties. BGR Energy will have to bear any other cost escalation.

The contract features a guaranteed station heat rate of 2,251 kilo calories per kilowatt (the heat required to produce one kw of electricity — the lesser the better). Auxillary consumption of power (power needed to run the plant) is 42 MW, or seven per cent, as stipulated in the tender conditions.

Order Book

With this order, BGR Energy’s order book doubles to Rs 6,000 crore, which includes four ‘balance of plant’ contracts and various jobs in ‘oil and gas’ sector.

It is understood that the company is the best bidder in a similar EPC contract for another state electricity board, where the job is worth about Rs 5,000 crore.

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(This article was published in the Business Line print edition dated July 2, 2008)
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