Power gear cos may get separate orders for boilers & turbines

NEW DELHI: The government plans to tweak the tendering process for very large power equipment to allow companies to bid separately for boilers
and turbines, a power ministry official said.
The move to withdraw the earlier policy of seeking turnkey contracts, where the winning bidder hands over the completed project, for the proposed supercritical power plants will enable larger participation from global equipment manufacturers, the official said on condition of anonymity.

Supercritical power plants are very large with a minimum capacity of 660 mw for every unit and are more efficient.

Public sector NTPC and Damodar Valley Corp (DVC) will soon come out with tenders inviting bids for 11 units of 660 mw power equipment for five of their upcoming projects.

A turnkey contract criteria limits the race to select few like BHEL and Larsen & Toubro (L&T), the official said. "Our aim is to invite a larger participation and enhance competition so that the country is able to absorb the best technology," he said.

So far, five companies - BHEL, L&T-Mitsubishi Heavy Industries (MHI) combine, Alstom-Bharat Forge, Toshiba-JSW and Italian company Ansaldo Caldie - have expressed interest in participating in the bulk tendering for supercritical equipment.

While L&T and BHEL will participate in entire plant package, Alstom and Toshiba want to bid only for turbine-generator package, and Ansaldo only for boilers. "The changes in the tendering process have been approved by a high-level committee on infrastructure on power sector issues," the official said.

The committee has representation from the prime minister's office (PMO), finance ministry, power ministry, heavy industries ministry and Planning Commission, among others.

It has been decided that the tender for boiler package will be split between two bidders and that for the turbine-generator package between three bidders. While the lowest bidder (R1) in the boiler package will get three projects, the second-lowest bidder (R2) will get two projects after matching price quoted by R1. The number of units for each bidder would be either seven and four, or six and five. The turbine-generator package is proposed to be split amongst three bidders, with the last bidder getting only one project.

Public sector BHEL will be given preference in the tendering process and would be necessarily ranked R2, if it is not R1 and R2 already. This would ensure that BHEL does not lose out in the tendering process to get projects for its supercritical foray.

An inter-ministerial group is finalising the details, the official said. The power companies will start the tendering process after that, he added.

The move will also lead to winning bidders setting up manufacturing for large equipment facilities. At present, only BHEL has large-scale power equipment manufacturing capability in the country while L&T is expected to start manufacturing of main power equipment soon. Having more equipment manufacturing companies in the country will ensure the shortage of equipment does not derail capacity-addition programmes, the official said.
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