Poor response to bid for power equipment dismays govt

India's efforts to boost domestic hi-tech power equipment manufacturing have suffered a jolt, with just two firms showing interest in locally building so-called supercritical boilers.The US, Japan, Germany, South Korea and Russia have taken the lead in manufacturing supercritical equipment such as boilers and turbines, which improve the efficiency of power plants and are environment-friendly.Domestic push: An NTPC power plant at Rihand, Madhya Pradesh. The firm floated a Rs40,000 cr tender for supercritical equipment.State-run power generation firm NTPC Ltd recently floated a Rs40,000 crore tender for supercritical power projects, inviting bids to supply 11 boilers and 11 turbines of 660MW each. Nine packages of boilers and turbines are meant for NTPC's projects and two for Damodar Valley Corp.The tender said the winner would have to set up factories in India to develop the local power generation equipment manufacturing industry. Such projects typically tend to be capital-intensive, with investment running into several thousand crores of rupees.Five companies bid for supplying the turbines, but just two-Larsen and Toubro Ltd (L&T) and state-owned Bharat Heavy Electricals Ltd (Bhel)- bid for the boilers.The poor response has disappointed the power ministry."While we were looking at more response from the industry, we have received only two bids for boilers. We need substantial power generation equipment capacity in the country, given the demand," power secretary H.S. Brahma said.India expects to add 62,000MW to its current power generation capacity of 153,000MW by 2012. Orders for 42,431.58MW have been placed with Bhel, the country's largest power equipment maker, which has an annual capacity of 10,000MW.The government plans to set up an additional capacity of 100,000MW by March 2017.Surprisingly, Russia's Power Machines, involved in a protracted contractual dispute with NTPC over the supply of turbines for the 1,980MW Sipat project in Chhattisgarh, has shown interest in the supercritical turbine offer.L&T, Bhel and joint ventures of Alstom SA and Bharat Forge Ltd, and Toshiba Corp. of Japan and JSW Group are the other bidders."Even we were surprised by the Power Machines bid," said R.S. Sharma, chairman and managing director, NTPC. "The techno-commercial bids have been received and we are evaluating them. We expect to call for price offer in May and award the contracts by July."The lowest bidder for boilers will be given an order for six units. If Bhel is not the lowest bidder, the government will award it the order for the remaining five units, provided it agrees to match the lowest bid.If it does not, the option will be given to others in the order of bid ranking. The same system will be followed for ordering turbines.A Bhel executive confirmed his firm's bids for the single largest power generation equipment contract in India.Questions emailed to Power Machines and L&T remained unanswered at the time of going to the press."The new players may want to see how the bid works out," said Hitul Gutka, analyst at local brokerage India Infoline Ltd. "They are testing the waters."

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