BHEL suppliers to set up own power plant - Move comes in the wake of power shortages affecting production

Move comes in the wake of power shortages affecting production

BHEL Small Industries' Association (BHELSIA), the consortium of local material suppliers to Bharat Heavy Electricals Ltd (BHEL), Tiruchi complex, is planning to set up a captive power plant with 12-16 MW capacity, in an effort to overcome the power shortage which has badly affected their business. The association has applied to register a new company to run the BHELSIA Power Project, with the Registrar of Companies.

It is in talks with two Korean firms and a Chinese firm to import their plants to Chennai and is planning to invest around Rs 20 crore in the project, said Rajappa Rajkumar, president, BHELSIA.

The association, which has around 280 members, would carry out civil works to set up the imported second-hand plants in Tiruchi, once it is approved by the government. It is looking at capacity of 12MW to 16 MW through the project.

"We are forming a new company to manage the captive power plant, which would come up in next six to eight months provided we get all the approvals from the Tamil Nadu government in time," said Rajkumar.

The association would approach the state government for approval to set up the power plant, and to use the Tamil Nadu Electricity Board grid for storage and usage of power from the grid, he added.

Around 70 per cent of the proposed investment would be from banks while the rest of the amount would be invested by the industry members of association, who would be inducted as promoters to the newly-formed company.

Around 350 small industries and another around 130 tiny manufactuers relying on supplies to BHEL for their survival are currently facing severe power shortage, which has affected their productivity of late, he said.

While the power requirement for the industries in Tiruchi is around 7 MW, the available power supply at present is only of around 4.5 MW.

"Setting up the plant, we will take 7 MW and will supply the rest of power to BHEL. They have agreed to provide us technical support for setting up the plant," said Rajkumar. He added that the newly formed company expects coal supply to be arranged through National Small Industries Corporation (NSIC).

The Tiruchi units put together has a capacity to supply around 2.5-3 metric tonne materials for BHEL. However, the power shortage has brought down the productivity of the units to around 2.2 MT, he said. Once the plant is set up, the local suppliers could leverage their maximum production capacity.

BHELSIA Power Project could supply electricity to BHEL and other industry players at the existing market rate while its promoters could get power at a subsidised rate, he added.