BHEL, NTPC unite to implement power projects

Given the nature of power capacity additions being planned for the next five years, BHEL and NTPC have decided to come together...

Given the nature of power capacity additions being planned for the next five years, BHEL and NTPC have decided to come together and form a new venture, solely dedicated to implement power projects. Added to this, in order to ensure that orders for power plants are uniform, the power ministry is going to prescribe standardized set designs which would drastically cut down execution time and would enable manufacturers to produce more equipment without having to change designs as per the requirements of the power developers. This model was followed in China, and last year around 100,000 mw fresh capacity was added in one year alone.

This commitment of NTPC and BHEL was made at a meeting called by Finance Minister P Chidambaram last week who was specifically asked by Prime Minister Manmohan Singh at the last meeting of the Committee of Infrastructure CoI to sort out issues related to supply of power equipment during the XIth Plan.

At the meet of the CoI, it was pointed out that right from the 8th to the 10th Plan 8212; 8220;there was no step up in the rate of capacity addition8221; with the recently concluded Xth Plan showing a close to 50 per cent slippage with only 21,080 mw of fresh capacity being added.

Over the past few months, while power ministry says that slippages were on account of delays in supply of equipment from BHEL, heavy industry ministry along with BHEL claim that slippages were on account of bunching of contracts during the terminal years of the plan period.

Apart from this, one of the main issues that emerged for the massive slippages is the 8220;delay in availability of ancillary equipments like coal handling plants, ash-handling plants8221;. Supply of this equipment and machinery is normally sub-contracted to smaller vendors and any delays on this account leads to a delay in the commissioning of the entire power plant.

Sources clarified that this joint venture would be solely responsible for central sector projects and not for projects to be implemented by state utilities. At the CoI meet of the PM it was pointed that project managers should not only be made accountable but be given flexibility as well as financial powers to take decisions to implement projects on time. To give a sense of the type of investments and logistics involved in say implementing a 1000 mw project 8211; involves tying up of investments to the tune of Rs 4000 to Rs 6000 crore.

Then there is placing of orders for the entire equipment and tying up of fuel supplies. If it is coal, this could involve tying up with railways for adequate and timely supply of coal. Added to this, there has to be adequate transmission facilities to evacuate power from the project site to the final consumer. All these have to be synchronised such that a power plant is commissioned on schedule.

Story continues below this ad

Based on the advance action taken for the XIth Plan, till September of this year, 8220;orders for main plant and machinery for 52,050 mw capacity had been placed and 2,895 mw capacity had already come up8221; thereby leaving an 8220;uncovered capacity of 23,620 mw8221;.