Private sector powers BHEL order book

A sustained focus on private sector contracts is paying off for Bharat Heavy Electricals Ltd (BHEL), which bagged a Rs 5,450-crore order from a Bajaj Hindustan unit for setting up a thermal power project in Uttar Pradesh.

Coming on the heels of a Rs 2,875-crore order from India Bulls and a Rs 2,883-crore order from Elena Power in the last quarter, the latest contract is a shot in the arm for the State-owned equipment major at a time when it is facing increasing competition in bagging new orders from its biggest customer — power major NTPC Ltd.

In an announcement on Wednesday, BHEL said it has bagged the latest order from Lalitpur Power Generation Company Ltd, a Bajaj Hindustan Ltd unit, for supplying power equipment for setting up of a 1,980-MW coal-fired project at Lalitpur in Uttar Pradesh. The company has bagged the main plant package order entailing three coal-fired thermal units of 660 MW each with supercritical parameters, it said.

BHEL's Rs 10 shares were marginally down on the NSE at Rs 2,060.10.

Private power

For BHEL, there has been a sharp surge in order from private firms, coming amid a sharp increase in the private share's contribution to the overall power capacity addition effort in the country.

In 2009-10, BHEL had secured its highest ever order book tally from private power utilities.

Out of the cumulative contracts of 16,489 MW for power plant equipment received by the equipment major during the year, the orders from private developers — including Avantha Power Infrastructure Ltd, Hindalco Industries Ltd, Indiabulls Group, Jindal Power Ltd, Jaypee Group, Sterlite Industries India Ltd, Tata Group and Videocon Industries Ltd — accounted for 14,689 MW or nearly 90 per cent of the total orders booked by the company's power division.

In financial terms, the orders amounted to Rs 33,787 crore — an over threefold increase over the previous year.

Tie-up with States

This comes at a time when NTPC, for its upcoming projects based on the efficient super-critical technology, has decided to follow a bulk tendering of equipments, whereby orders are to be split among the top bidders.

To tide over the splitting of the NTPC orders, BHEL has also entered into pacts with a slew of States, and has committed equity participation in thermal projects using supercritical sets in Tamil Nadu, Karnataka and Maharashtra and plans to follow the model in other States as well.

Under this model, BHEL has bagged orders for 1,600 MW sets for Yeramarus and 800 MW for Edlapur project in a joint venture with the Karnataka Government. It has also established a joint venture with Tamil Nadu and ordering of sets is expected in the early part of the next financial year. Clearances are on for a gas-based project in Maharashtra under the joint venture route, which are also likely to come through next financial year.

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