 "'Govt taking steps to protect BHEL from Chinese competition'")
A slew of factors including aggressive competition, weak investment sentiment, inflationary pressure and political turmoil in overseas countries like Syria have impacted the performance of state-run BHEL, Parliament was informed.
In response to a query on whether the government is taking any steps to protect the interest and efficacy of BHEL from Chinese competition, Heavy Industries and Public Enterprises Minister Praful Patel replied in the affirmative.
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However, he did not provide details about steps initiated in this regard.
Patel said that a number of Chinese companies such as Dongfang, Harbin Power and Shanghai Electric are competing with BHEL.
"Out of 54,964 MW power generating capacity added during the 11th Five-Year Plan, equipment from Chinese suppliers/manufacturers accounted for nearly 18,500 MW (i.E. 34%," he said in a written reply in the Lok Sabha.
Meanwhile, a slew of factors have affected the performance of BHEL and resulted in decreasing order book.
According to Patel, there has been a sharp contraction in new orders maturing in the domestic power sector and orders are getting deferred or are put on hold.
"Aggressive competition from new players/joint ventures formed in the private sector in the country for super critical boilers and turbine generators" are affecting price realisation and impacting margins.
Patel said other factors are inflationary pressures and hardening of interest rates -- which are impacting cost of capital -- and "political turmoil/armed conflict in countries like Syria".
Further, weak investment sentiments, financing and customer constraints in releasing payments for deliveries were impacting the performance, he added.
For the year ended March 31, BHEL posted an eight% fall in net profit at Rs 6,485 crore. During same period, outstanding payments from customers stood at Rs 40,000 crore.
BHEL had reported a net profit of Rs 7,040 crore in the 2011-12 financial year.