BHEL can`t stand losing orders to Chinese firms

Competition from homegrown private sector companies isn’t all that bad, but losing orders to Chinese firms is what makes state-run power equipment supplier Bharat Heavy Electricals Ltd. (BHEL) feel miserable, admits its Chairman and Managing Director K Ravi Kumar.

“I don’t mind competition from private domestic players, but I feel bad if the order is won by any Chinese company,” he told PTI, alluding to the 18,000 Mw worth equipment orders that the PSU has lost to Chinese companies.

BHEL also recently lost an order for supplying 800 Mw super critical technology to Andhra Pradesh Generation Company (APGENCO) to domestic company L&T-Mitsubishi Heavy Industries.

In India, International Competitive Bidding (ICB) route is strictly adhered to by the companies who bid for supplying equipment to the power projects. Whereas, there is no such system in China.

Asked whether BHEL lost orders despite ICB, Ravi Kumar said: “We have expertise for supplying equipment for 250 Mw and 500 Mw but in between suddenly the norms were changed to 300 Mw and 600 Mw only to accommodate Chinese firms. But this norm has now been removed.”

But in the process, BHEL lost orders worth 18,000 Mw from private players.

BHEL, which has joined hands with French equipment maker Alstom for manufacturing 800 Mw in the super-critical technology, is bidding aggressively and is hoping to get orders in this in the near future.

BHEL recently said it would invest Rs 10,000 crore in the next four years to ramp up capacity to meet the growing electricity needs.

The investment is in line with the order book of the company, which has crossed the Rs 1,00,000 crore mark and is still growing.

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

Its 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, a company statement has said.

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.