Bhel Evolves Strategy To Attract Ipp Business

Bharat Heavy Electricals Ltd (Bhel) is planning to attract independent power producers (IPP) through a portfolio of strategies, including consortium approach, equity participation with equipment supply leverage and syndicating financial packages on a limited scale.

This follows the government's decision to step up outlay in key infrastructure sectors by 35 per cent in 1998-99.

The public sector company expects to cash in on the increased outlay that is expected to revive industrial growth.

Bhel hopes that the delay in award of contracts due to late finalisation of the Ninth Plan, which affected several power projects, will be set right. A significant part of the Ninth Plan capacity addition is expected to be in the private sector.

The company has commissioned its first IPP sub-station project at Paguthan in Gujarat. It has also charged the New Koyna 400 kv priority bay of MSEB for power flow from the Dabhol project. It has secured orders for 400 kv power transformers and reactors from PowerGrid Corporation.

The company said it looked forward to this business in view of the low per-capita consumption of power, continued gap between demand for and supply of power and growth plans of the country. Continued uncertainty about resource availability for the infrastructure sector attributed to the low demand during 1997-98.