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State-owned Bharat Heavy Electricals Ltd's technology-sharing arrangement with Alstom for manufacturing supercritical boilers in India will continue unaffected by the French engineering major's recent global pact with Chinese equipment firm Shanghai Electric.
BHEL's Chairman and Managing Director, Mr B.P. Rao, said he has an assurance from Alstom that the “exclusive arrangement” between the two companies for the Indian market will not be affected in any manner, at least till 2020. If the new Alstom-Shanghai Electric joint venture wants to bid for an EPC (engineering, procurement and construction) contract in India, the combine will have to take boilers from the BHEL venture.
Alstom had, in April this year, announced a pact with the Shanghai Electric Group to establish a joint venture combining both companies' power plant boiler divisions. The joint venture, Alstom-Shanghai Electric Boilers Company, would have combined sales of around €2.5 billion and would be registered in Shanghai with an operational headquarters in Singapore.
“On the boiler segment, the exclusive agreement (between BHEL and Alstom) prevents any competition from any other venture and is valid till 2020 or so. It is an agreement which is filed with the Government of India, so we (Alstom and BHEL) are all bound by this,” Mr Rao said. If the Alstom-Shanghai Electric combine was to bid for an EPC mandate in India, he said “they will have to take boilers from us (BHEL's venture with Alstom)”.
Power plant boilers
BHEL's partnership agreement with Alstom was signed in 2005 for manufacturing large power plant boilers in India. A major objective of this partnership was to win business in upcoming projects based on the energy-efficient ‘supercritical' technology. The partnership agreement was constituted through a ‘technical assistance agreement', including all boiler designs and associated high performance pulverisers and a business co-operation agreement defining the industrial scope of each of the partners for future boilers orders.
On whether BHEL, through Alstom, could have access to Shanghai Electric's facilities in China for inputs, Mr Rao said it could be something that could be possibly looked at in the future. He, however, added that the issue is yet to come up for deliberations. “Nothing on this has been discussed by any us so far.”
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