BHEL has bagged the contract for supplying the steam turbine generator (STG) package for the captive power project at ArcelorMittal Group’s steel plant at Kryviy Rih, in Ukraine, an official statement said. BHEL’s scope of work under this contract involves design, engineering, manufacture, supply and supervision of the erection and commissioning of the 27-MW steam turbine & generator package, including controls and instrumentation (C&I).

The project is to be executed by BHEL within a contractual completion deadline of 18 months. The steam turbine generators and C&I systems are to be manufactured at BHEL’s Hyderabad plant and its electronics division in Bangalore, respectively.

Up to June, 2011, BHEL had installed generation equipment with a cumulative capacity of over 8,500 MW in 21 countries outside India, while another 5,200 MW of power generation capacity was under various stages of execution in 19 countries.

BHEL has also set up a marketing office at Almaty, in Kazakhstan. The company has executed many contracts for various products and services in Russia, Azerbaijan, Kazakhstan and Tajikistan.

Presently, the company is executing a gas turbine-based combined heat and power plant project in Belarus.
Agencies

“While BHEL has already agreed to join as a joint venture partner in the proposed seamless tube mill at Vizag, ONGC has also evinced interest and discussions are in progress,” RINL Chairman and Managing Director A P Choudhary said.

Choudhary favoured the inclusion of ONGC in the venture and indicated that there should not be any resistance from BHEL to bring the oil major on board, since seamless tubes find application in a wide area, including the energy, oil and gas and water sectors.

“It will be win-win for all of us,” he said. While he stated that the shareholding pattern of the proposed venture is yet to be finalised, he asserted the majority stake would be held by RINL, as the proposed facility would be housed inside RINL’s Vizag facility.

“The mill will have four lakh tonnes per annum seamless tube installed production capacity. Total investment here will be over Rs 2,000 crore,” Choudhary said.

The joint venture agreement is likely to be signed before the end of the current year and once that is done, tendering for the plant and machinery will follow, he said, adding this might take place before the end of the current fiscal.

“It might take two to two-and-a-half years from the start of tendering for the plant to be operational,” he said. RINL’s lone facility at Vizag has a 3 million tonnes per annum installed capacity. It is in advanced stages of commissioning 3.3 million tonnes per annum of additional capacity.

“After meeting the requirements of the domestic market, we will also export tubes to destinations like the Middle East and others,” he said.
Agencies

It’s scope of work envisages design, engineering, manufacture, supply, erection, testing and commissioning of steam turbines, generators and boilers, along with controls and instrumentation (C&I) and auxiliaries including associated civil work. The company has established the capability to deliver 15,000 Mw per annum. It is being augmented to 20,000 Mw.

BHEL had also bagged a Rs 3,800 crore order from Dainik Bhaskar Power Ltd last week, for setting up a 1,320-Mw thermal power plant in Madhya Pradesh.
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Valued at Rs 3,783 crore, the order is for Dainik Bhaskar Power Ltd’s (DBPL’s) upcoming coal-based supercritical thermal power project in Singrauli District of Madhya Pradesh.

BHEL is presently executing another contract for DBPL, involving the supply and commissioning of a 2×600 Mw (boiler, turbine and generator) BTG package, along with associated auxiliaries for a 1,200-Mw coal-based thermal power project in Chhattisgarh.

BHEL’s scope of work under the new contract envisages the design, engineering, manufacture, supply, erection, testing and commissioning of supercritical boilers, steam turbines and turbo-generators along with state-of-the-art controls and instrumentation (C&I) and other associated auxiliaries like transformers and a switchyard.

Out of the total orders for power plant equipment with a cumulative generation capacity of 31,560 Mw received by BHEL during 2009-10 and 2010-11, orders received from independent power producers accounted for 22,369 Mw.

BHEL has established the capability to deliver 15,000 Mw of power equipment per annum and further augmentation of its capacity to 20,000 Mw per annum is underway.
Agencies

Bharat Heavy Electricals Ltd (BHEL) has filed draft papers with market regulator Sebi for the proposed divestment of 5 per cent (2.45 crore shares) of the government’s stake in the company. “We are in the process of appointing independent directors. Soon they will be appointed,” a top government official said.

As per regulations, half of the company’s board should comprise independent directors. Currently, BHEL has 13 directors, including Chairman and Managing Director B P Rao. Out of them, five are independent directors. According to a top BHEL official, there is a shortage of two independent directors to achieve compliance with Sebi’s listing norms.

In its Draft Red Herring Prospectus (DRHP), the state-run entity said it intends to be in compliance with regulatory requirements regarding composition of the board before filing the Red Herring Prospectus with the Registrar of Companies.

“Presently, our board has thirteen directors, of which five are independent directors, while Clause 49 of the Equity Listing Agreement stipulates that independent directors should comprise 50 per cent of our board,” it noted.

The proposed BHEL follow-on offer is a part of the government’s ambitious Rs 40,000 crore disinvestment target for 2011-12. The disinvestment is expected to raise over Rs 4,000 crore for the government.

The government on August 30 approved the disinvestment of 5 per cent of its shareholding in BHEL. The government holds a 67.72 per cent stake in the power equipment major.

Four merchant bankers— Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital— are managing the follow-on public offer.
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The government has, in the current financial year, raised Rs 1,162 crore through divestment, of a 5 per cent stake in Power Finance Corporation in May. Initially this year, BHEL was not part of the government’s list for disinvestment.

The stock opened at Rs 1,770 and dropped sharply to a low of Rs 1,741. It is now down 1 per cent at Rs 1,748.
Business Standard

The contract for 40 transformers for Mundra ultra mega power project being executed by BHEL is on track, sources said. Sources confirmed that although the contract is sizable in terms of the number of transformers to be supplied, yet in percentage terms, it amounts to a minuscule 0.8 per cent of the project.

Company officials confirmed that while all 24 power transformers and nine generator transformers have already been supplied, the balance are being supplied in sync with the project milestones. Tata Power in a communique to the power ministry had said that the last three 800 MW each units of its Mundra project may get delayed due to delay in supply of power equipment by BHEL. Tata Power also requested the Power Ministry to intervene so that BHEL could supply the equipment within time to avoid any delays in the commissioning schedule.

Tata Power is awaiting ministry’s reply on the same. The electricity generated from this project would be evacuated by the central transmission utility PowerGrid Corp to the beneficiary states, including Gujarat, Maharashtra, Punjab and Rajasthan.

BHEL currently generates equipment of 15,000 Mw capacity and plans to ramp it up to 20,000 Mw by March, 2012.
Agencies

The sale of 5 per cent stake in power equipment maker BHEL is expected to mop up about Rs 4,700 crore for the government. The government has appointed four merchant bankers — Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital — for BHEL’s FPO.

“We expect the issue [FPO] around Diwali time… That’s the best time,” sources said. Diwali falls in the second half of October this year. Initially, 17 merchant bankers were shortlisted for BHEL’s FPO. Apart from Morgan Stanley, DSP Merrill Lynch (Bank of America), ICICI Securities and Kotak Mahindra Capital, others include RBS, Nomura, IDFC, Deutsche Bank, IDBI Capital Market Services and Edelweiss Capital.

The proposed share sale in BHEL is part of government’s ambitious programme to garner Rs 40,000 crore through disinvestment in the current fiscal. At the end of June quarter, the government held 67.72 per cent stake in BHEL.

The government has mopped up more than Rs 1,100 crore by divesting 5 per cent equity in Power Finance Corporation (PFC) in the current fiscal. In the last financial year, disinvestments raked in Rs 22,762.96 crore, much lower than the set target of Rs 40,000 crore.
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However, of late, many private players such as Reliance Power have ordered Chinese equipment for their projects including Ultra Mega Power Projects (UMPPs). Meanwhile, against the backdrop of comparisons between equipment supplied by BHEL and the Chinese players, a working group has been set up by the Power Ministry to analyse the performance of the sets from the two entities.

The debate over BHEL and Chinese sets comes at a time when the Indian power sector is projected to see an ambitious capacity addition of over 80,000 Mw in the 12th five-year plan (2012-17).

Various reports by different entities, however, have supported BHEL, say experts. “BHEL retains the edge over the Chinese of a five per cent better heat rate, PLF (Plant Load Factor) and lower auxiliary consumption. This is reflected in the trust that private IPPs (Independent Power Producers) have reposed in BHEL,” global group Bank of America Merrill Lynch said in a recent report.

PLF is an indicator of generation efficiency. Meanwhile, industry sources requesting anonymity said that a major concern with Chinese sets is the lack of asset maintenance by Original Equipment Manufacturers (OEMs), even during the initial years of operation.

Further, they added, that there are also apprehensions about after sales support and related costs as compared to domestic entities like BHEL. A recent report from JM Financial said that life-cycle cost of BHEL equipment is lower as compared to that of Chinese sets, mainly due to better PLF and lesser operational costs.

In 2007, brokerage firm CLSA had said that BHEL would retain higher share in Indian power equipment market despite stiff competition from Chinese entities. Industry estimates indicate that BHEL’s offerings — boiler, turbine, and generator — make up for about 45 per cent of the requirements of a power plant.

Delays in many power projects have been attributed to factors such as non-availability of Balance of Plant (BoP) equipment and shortage of skilled manpower.
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While the fast moving consumer goods giant is placed at the sixth position ahead of Google, BHEL is ranked ninth in the list, which is topped by US-based IT service provider Salesforce.com.

The magazine said the list is based on a study by Harvard Business School professor Clayton M Christensen, Jeff Dyer, professor at Brigham Young University, and Hal B Gregersen, professor of leadership at INSEAD.

Online retail firm Amazon has been placed at the second position with Intuitive Surgical in third, while Apple and Google ranked fifth and seventh respectively in the list.

“Our method relies on investors—voting with their wallets—to identify the companies they expect to be innovative today and in the future. Among them are familiar ground breakers like Amazon, Apple and Google,” according to the study which is published in Forbes latest edition.
Agencies