NTPC to re-tender nine boiler units of 800 MW each:Detailed interview with CMD NTPC R.S.Sharma

NTPC has issued new tenders for boiler bulk orders. It has not issued fresh tenders for turbines. NTPC had disqualified Larsen &Toubro from the 11x660 MW bulk tender. It is likely to float turbines of higher capacity.Commenting on the same, RS Sharma, Chairman and MD, NTPC, said the company has gone in for re-tendering of boiler orders. "We are going for nine units of 800 MW in the next 2-3 months. New bulk tendering will be completed this year itself."NTPC, he stated, will go ahead with the turbine orders as well but declined to comment on L&T’s eligibility. "Both qualifying requirements in turbines and boilers will have to be met. There are no changes in the terms and conditions in the new tenders."The state-run firm is aggressively looking for coal blocks abroad. Reports suggest that NTPC has dropped its plans to acquire Griffin assets. Commenting on the same, Sharma said the coal block acquisitions will be via a joint venture or equity purchase.

Currently, NTPC has a requirement of 240 million tonne of coal. Its coal requirement is expected to go up by 10-15% per annum. Coal India supplies 80-85% of NTPC's coal requirement. NTPC has been allocated nine mines with estimated reserves of 5.9 billion tonne of coal. The Pakri-Barwadih captive coal plant has delayed commissioning by one year.NTPC's current power capacity stands at 31,704 MW. The company is targeting 45,000 MW by FY12 end. Under construction power capacity stands at 17,500 MW.Of its total capacity, 3,955 MW is gas-based. Reliance Industries and NTPC are fighting it out in the courts over the pricing of gas. The next date for hearing is July 26. NTPC has sought the Power Ministry help in lobbing with the Petroleum Ministry to protect its interests.

Q: Can you just give us clarity on that large boiler plus tender offer, where things stand at now after you disqualified L&T? For what has new tenders been asked for and what is the update for turbine front as well? 

A: So far the boiler is concerned, we have already gone for re-tendering of that. We have got 11 units of 660 megawatt there; already we have given two months time for the bidders to respond. So far as turbine is concerned, we are going ahead on 660 megawatt.

Q: Would L&T be eligible for bidding for the turbines because the L&T chairman seems quite confident that they will be able to participate in the new turbine bid as well? And have they participated in the bid for the boilers? 

A: I will not be able to comment because these are on the some of the finer points of the  evaluation part, so I will request you not to ask me on the finer points of the evaluation part actually. What I am telling you in general principle that, yes, there are qualifying requirements in the turbine, boiler and all the bidders are required to meet the qualifying requirements. They have to meet that, and the evaluation committee will take a call on the basis of those requirements getting met.

Q: So for the new tenders that have been issued for the boilers bulk orders, any change in terms and conditions or will terms and conditions such as pricing etc remain the same?
A: No not all, no change. It’s exactly same.

Q: It was indicated to us that aside from the retender on the boiler bulks, there is a fresh tender as well, what is the total amount to the tender set out in terms of size and how long is it open for?
A: Now, we are going for 800 megawatts units, on the similar principles like we went for 660 megawatts, that already the documents are on the final stages. Now, we have written to the government for the final clearance, so we are going for nine units of 800 megawatts and principles shall be more or less the same as they were for 660 megawatts. Sometime in August or in September, we shall be going in the market for the 800 megawatts, for the boiler and turbine both.  

Q: You were giving us timelines on when this plan for this new nine mode boilers and turbines of 800 megawatt will come in, can you just elaborate on that, by when you call for tenders, by when you expect this whole process to be completed?
A: We are planning to go into the market in the last week of August or late September for this nine into 800 megawatt boiler and turbine both. The process should be completed in the financial year itself, before March 2011.

Q: There has been some concern amongst domestic bidders like BHEL, regarding how Chinese makers are coming into the market and bidding much lower, how important is an aggressively lower bid for NTPC, while giving out some of these tenders?

 A: Let me mention to you that so far as NTPC is concerned, we are having our QR and we are having our technical specifications, which are quite elevate. We have got guaranteed parameters and all those things are there. So if any bidder meets our requirements and if any bidder fulfills all those guaranteed criteria and if he can supply at quite low price then why should NTPC have a concern. We always welcome, ultimately we are the company to regime, so we always welcome competition and we are quite okay with that.

Q: There have been reports that NTPC may be looking to acquire a stake in coal block overseas and the size could be as large as one and a half billion dollars, is that something NTPC is aggressively looking for?
A: Yes, certainly we are looking forward for that because right now we are having the import requirement about 15 million tonne per annum, which is going to be around 25 million tonne in another three-four years. So certainly NTPC is looking forward for acquiring the coal blocks in abroad and either it shall with equity stake, joint venture or full acquisition, whatever ultimately gets in our way. But certainly we are quite aggressive on that front.