Bhel earmarks Rs 10k-cr for capacity expansion

To invest Rs 5k cr till Dec 2009 to reach 15,000 mw capacity.

Power equipment major Bharat Heavy Electricals (Bhel) today announced an investment of $2.5 billion (over Rs 10,000 crore) in the next four years to ramp up capacity to meet the growing electricity needs.

“We will be investing Rs 5,000 crore in the first phase till December 2009 to reach 15,000 mw capacity. Besides, the Board has also approved an investment of similar amount to take the capacity to 20,000 mw by 2012,” Bhel chairman and managing director, K Ravi Kumar, said. The investment is in line with the order book of the company.

 

POWER PLAN

Bhel to spend over Rs 10,000 crore in the next four years to revamp capacity

It plans to invest Rs 5,000 crore in the first phase

The investment is in line with the order book of the company, which at present stands at Rs 95,000 crore that includes many contracts from abroad

The company recently bagged its first turnkey contract from Syria worth Rs 2,080 crore to develop 400 mw thermal power project

On the issue of delay on the part of Bhel to supply equipment, Ravi said, the public sector undertaking was not responsible for it as most of the projects which have been facing time overrun are due to changes in the parameters.

“Any change in the parameters requires a complete redesigning of the project and that causes delay sometimes,” he said.

On the overseas expansion, the company is looking for acquisitions and is likely to appoint global consultants to advise them. Earlier Bhel had set aside Rs 10,000 crore for overseas expansion and were scouting for companies on its own. The state-owned company had earlier formed a separate unit for the same but the company did not take off.

“Our model was perhaps not right, we should have a global consultant to advice us,” Kumar said.

Bhel reported a net profit of Rs 384.41 crore for the quarter ended June 30, 2008, a rise of 33 per cent compared to the same period last fiscal. It had registered a net profit of Rs 288.91 crore for the year-ago period.

It’s income rose to 31.77 per cent at Rs 4,703.55 crore from Rs 3,569.56 crore in the same period last year. Bhel at present has an order book of Rs 95,000 crore that includes many contracts from abroad.

The company recently bagged its first turnkey contract from Syria worth Rs 2,080 crore to develop 400 mw thermal power project in the country. The order has been placed by Public Establishment of Electricity for Generation and Transmission (PEEGT), Ministry of Electricity, Syria.

The company also bagged an order worth Rs 200 crore for a hydro-electric power project in Vietnam. The contract that marks company’s maiden entry into Vietnam was awarded by state-run Nam Chien Hydropower.

The project is located in Muong La, 350 kilometres north of Hanoi and is slated to be completed by the end of 2010. Under the contract, Bhel would be responsible for the design, engineering, manufacture, supply and supervision of installation as well as commissioning of electro-mechanical equipment.

Major equipment to be supplied for the project comprises hydro turbines, generators, transformers and switchgear. The company plans a six-fold increase in exports to Rs 8,000 crore by 2012.