SMEs grab power pie

The big boys in the business of power-generation and distribution may soon lose their monopoly as small and medium entrepreneurs are keen to foray into this stream.

This was disclosed at a conference, Indian Power Sector: 11th Plan and Beyond, organised by CII (NR) in Chandigarh recently.

The entrepreneurs urged the Secretary, Ministry of Power, Anil Razdan to provide the details of the equipment they need from the SMEs for the execution of big projects.

The secretary endorsed the fact that the SMEs can play a vital role in the expansion of the power sector by providing the equipment at a competitive price.

He said that many big power projects could not be completed because the balance of plant works were not completed and these can be handled by the SMEs.

The SMEs can do a complimentary job by providing machinery and services for coal and ash handling, water treatment, cooling towers and chimneys, pumps and electrical equipment.

The transmission and distribution works can also be shaped with contribution from small players for towers, cables, equipment (transformer and switchgear) and IT-based systems.

Besides this, there is a dearth of construction machinery. With the increase in volume of business, more machinery is needed and that can be supplied by the SMEs. The power secretary also stressed the need to revive sick units to accelerate the pace of power reforms.

The CII (Northern Region) took this initiative and is in the process of mobilising the details of the SMEs who have the potential to join the power business.

The Chairman, SME Sub-Committee CII (NR), R M Khanna, told Business Standard, that in order to apprise the power ministry of the potential of SMEs across India, the CII plans to organise exhibitions of the products and services that can be provided by them.

"Not only in Chandigarh, we would like to showcase in other towns of north India, like Ludhiana, Jallandhar, Faridabad and Jaipur. This would also be replicated in other parts of India and this is for the first time that the participation of small players at such a scale has been mulled by the power ministry in tandem with CII," he said.

Khanna added that the core strength of the Indian industry lies in SMEs. So, a new model can be evolved where one large player can act as an umbrella and the smaller players can join it as ancillaries or a consortium can also be envisaged for the execution of a large project.

He added that they would get the necessary feedback from the power ministry in a couple of weeks and that would help them clearly define the suitable model for the power sector reforms with the participation of small and medium players.