Amid increasing concerns over the financial position of the country's electricity sector, power companies are making concerted efforts to up their exposure in other areas. The idea is to de-leverage operational risks and remain solvent even as a defaults scare looms large.
Transmission major Power Grid Corporation of India Ltd (PGCIL) is working on plans to step up its telecom play and sees an emerging business opportunity in the Rs 20,000-crore national optical fibre network project.
Power equipment major Bharat Heavy Electricals Ltd (BHEL) is trying to increase its industry sector exposure and has recently struck joint ventures with global players to manufacture water treatment plants and centrifugal compressors.
Rural Electrification Corporation, the state-owned power lender, is looking at new opportunities from fee-based income from allied businesses such as consultancy.
While some of these diversifications have been on the anvil for a while, executives at some of these companies admit that diversification plans have got a fresh impetus.
Accumulated losses
The main worry is about payment defaults by distribution utilities, where accumulated losses are well over Rs 70,000 crore. Generation project developers too could default on payouts to lenders as high fuel costs are threatening to derail the costing of upcoming projects.
Equipment major BHEL, for instance, is trying to spread out its exposure to the industry segment of business that includes the transportation, transmission equipment and renewable energy sectors.
“The situation in the power sector in not very good and most SEBs (State electricity boards) are bankrupt. Today, money is flowing in, but we don't know when it will stop… While our focus will continue (on the power sector), we are making a conscious effort to step up focus on the industry segment in the years to come,” a senior BHEL official told Business Line .
A strategic partnership with GE India Industrial Pvt Ltd to address requirement of water treatment plants in India for industrial and municipal corporations and a tie-up with Nuovo Pignone, Italy for manufacturing centrifugal compressors are among the latest initiatives announced by BHEL.
PGCIL, which owns and operates the bulk of the country's inter-state power transmission assets, is the only utility with a overhead optical fibre network using optical ground wire on power transmission lines. The company sees “emerging opportunities” in the ambitious nationwide project that will connect all the gram panchayats.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.