19 May 2012

Cancellation of Power Equipment Orders

Certain power companies/project developers have cancelled equipment orders in the past few months.  Details of utility power projects along with reasons for cancellation of power equipment orders in the past few months are:

Utility/Project      Power                   BHEL          Order          Order                    Reason for
Developer             Project        Scope of      value           cancellation                   cancellation
                                                Work           (Rs. Crore)   in Month/year      cited by the

Pipavav Energy      2x600 MW    Boiler &       2487            October 2011         Land acquisition
Private Limited      Pipavav        Turbine                                                        issue
(PEPL)                             Thermal       Generator
                             Power          package
                             Station        with C&I

Ideal Energy          Unit#2 of     Boiler &       664              November 2011      Environmental
Projects Limited     2x270 MW    Turbine                                                        clearance and
(IEPL)                    Bela             Generator                                                    Coal linkage
                   Thermal       Package                                                       not received
                   Power Plant  with
and C&I

Shrishti                 2x270 MW    Boiler &       1257.6         December 2011      Non-availability
Infrastructure        IPP in West  Turbine                                                        of required land
Development                   Bengal         Generator                                                    for the project.
Company                                  package
Limited (SIDCL)

The country has been adding manufacturing capacities with huge investments in power equipment sector, both in BHEL as well as in private Sector.

In the current shrunken domestic power market scenario where very few orders have been finalized during 2011-12 by the power utilities/developers due to uncertainties mainly associated with fuel linkages/environment clearances/ land and water availability, the cancellation of existing orders places additional strain on capacity utilization of the domestic equipment manufacturing companies, impacting growth & profitability.

Department of Heavy Industry has been in touch with the stakeholders and the Departments concerned to encourage the domestic electrical equipment sector as also to provide a level playing field to them.

In order to facilitate large power generation capacity addition programme currently under implementation, indigenous manufacturing of supercritical power equipment is being encouraged.  With a view to encouraging supercritical units, bulk orders for National Thermal Power Corporation (NTPC) and Damodar Valley Corporation (DVC) have been approved by the Government.  These bulk order have mandatory stipulation of pre-agreed Phased Domestic Manufacturing Programme (PMP).

Further, with a view to support indigenous manufacturers of thermal power plants based on supercritical technology, Central Electricity Authority has advised Central/State sector power generating companies/utilities to adopt PMP condition in the bids to be invited till October 2012 for super-critical boilers and turbine-generators.

The above information was given by the Minister for Heavy Industries & Public Enterprises Shri Praful Patel in a written reply in the Lok Sabha today. 

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