Bhel to push sales in eastern region

The eastern region of public sector power equipment major, Bharat Heavy Electricals Ltd (BHEL), has targeted three-fold rise in turnover to Rs 1,100 crore in 2005-06 from its existing level of Rs 300 crore.

Addressing a gathering of employees in the city recently, its chairman and managing director, A K Puri, said that the order book position of BHEL as of date was more than Rs 30,000 crore.

BHEL was at present working to bring down costs as far as possible. The eastern region office has recently started eyeing foreign power projects and has bid for one gas based power plant in Oman and another three in Bangladesh.

BHEL has recently won contracts for manufacturing, engineering, procurement erection and commissioning of projects like Korba East, a 2x250 MW plant valued at Rs 1,700 crore by the Chhatisgarh State Electricity Board, as well as the National Thermal Power Corporation's (NTPC) Kahalgaon project. The Kahalgaon project comprised of two units of 500 MW each (stage II) valued at Rs 1,412 crore.

Damodar Valley Corporation has also recently placed repeat order with BHEL for its Mejia and Chandrapura power plants. The chairman also said that BHEL would have to put all its effort in procuring more orders from the eastern region.

In a parallel development, the company has initiated research and development on reducing its per MW cost of erection which at present was close to Rs 4 crore. BHEL was keen to compete against Chinese companies in both cost and quality.

To do so, it would have to aim for a benchmark price that would be less than Rs 3 crore per MW of power generation. Sources said BHEL would aim to work out a package that would permit erection of thermal power plants at costs less than Rs 2.7 crore per MW as this was the price offered by Chinese bidders.

The current benchmark cost in the Indian thermal power sector was around Rs 4 crore per MW. Officials from BHEL said, "The company is gearing itself to meet Chinese competition with better products which would be very competitively priced. Engineers are looking to into possible areas which could provide cost savings and were in the process of finding out ways and means of competing with competition from China."

BHEL was planning to develop technology for erecting 300MW modules at new-generation power plants against its existing capability of 250MW modules.