NTPC looks for suppliers to power pending projects

National Thermal Power Corporation is scouting for new suppliers to speed up pending power projects, a move that may deprive equipment-supplier Bharat Heavy Electricals of a big chunk of contracts in the future. 

NTPC counts heavily on BHEL for its projects but supplies have been delayed at times. The Comptroller and Auditor General (CAG) of India has advised NTPC to look for alternative suppliers as BHEL had delayed supplies for projects such as Sipat Stage 2, Farakka, Bhilai and Jhajjar. 

"Earlier, we did not have much options. Now, with the opening up of the market, new manufacturers are coming in. These manufacturers have participated in the open bulk tender for the upcoming 9 units of 660MW. NTPC has invited bids from other companies as well for some of its newer projects," an NTPC official said. 

BHEL said that delays were sometimes caused by factors beyond its control. "Certain projects like Barh stage 1 and Sipat stage 1 are behind schedule by up to 30-48 months because of delay in the execution of the main plant packages. The Main Plant packages of these projects are ordered on foreign suppliers," a spokesperson for BHEL said. 

Domestic suppliers like BHEL are increasingly facing threat from Chinese equipment suppliers, as they are 20% cheaper. BHEL had earlier approached the government asking it to impose a duty on equipments sourced from Chinese power equipment suppliers. 

"It is not likely that BHEL may lose out to its Chinese counterpart on account of faster deliveries," the BHEL spokesperson said. He added that none of the Chinese vendors had ever participated in international competitive bidding tenders called by NTPC because of stringent quality and technical requirements. 

Despite the huge order book of 1,58,000 crore at the end of the third quarter of the current fiscal year and the leadership position in the domestic markets, the company has acknowledged the growing competition in the sector. 

BHEL is currently facing tough competition in its major markets from companies like L&T-Mitsubishi Heavy Industries , Bharat Forge- Alstom , Toshiba-JSW, BGR- Hitachi and Ansaldo- caldaie that have also applied for the NTPC tender. Now even South-Korean heavy industries and construction major Doosan is setting up unit in India. 

These new players are setting up units in India to benefit from almost 1,40,000 MW of generation capacity that the country is planning to add in the next seven years. 

Alstom, another player in the fray, recently won government approval to form two JV s with Bharat Forge to manufacture power plant equipment. BHEL is also facing competition form Chinese equipment makers such as Shanghai Electric Group and Dongfang Electric .