The slowdown in the power sector has affected the associated segment of
power generation equipment manufacturers. The much-hyped international
joint ventures of L&T, JSW, Bharat Forge, BGR Energy and Gammon
India are operating at an average of less than 40 per cent capacity as
the industry awaits quick redressal and clarity on coal linkages,
formation of a coal regulator and pricing and tariffs that could sustain
the power producers and distributors.
A senior official from BGR Energy, that has a tie-up with Hitachi of Japan, says the industry has been facing uncertainty. “It all starts with clarity on coal allocation and linkages. The power producers should be clear about their linkages before they place orders for boilers, turbines and generators (BTG). Besides, issues of land clearances and land pricing need a re-look after passage of the new land bill that led to increase in land prices to unviable levels,” said the BGR official.
BGR Energy-Hitachi JV at present has around 3,000 mw of orders from NTPC. However, the projects have not taken off as the company is still waiting for the right environment that would sustain their investment. “We will start our operations after September 2015, since we expect the new government to heed our demands. Even if action is taken on immediate basis, it may take another 8-9 months before the changes are visible,” said the BGR official.
The JSW Toshiba joint venture in which Toshiba has controlling stake is also operating at sub-optimal capacity after the company announced doubling the capacity in 2012 to 6,000 mw. “The slowdown has affected our performance since demand has dropped over the last couple of years,” said a JSW Energy official. The spokesperson of Toshiba, Kaori Hiraki, could not be contacted on phone to confirm this.
The L&T joint venture with Mitsubishi is operating at only 30-35 per cent capacity. “The joint venture is affected by the overall slowdown and our power business is not fully optimised yet. Though we did bag an EPC order worth Rs 2,000 crore recently from Bangla-desh,” said the L&T spokes-person.
TC Arora of Accunergy, a Delhi-based power consultancy firm, says the major issue facing the industry is Chinese competition. “Their companies are supplying at a much lower price, making Indian manufacturers highly uncompetitive,” he says
A senior official from BGR Energy, that has a tie-up with Hitachi of Japan, says the industry has been facing uncertainty. “It all starts with clarity on coal allocation and linkages. The power producers should be clear about their linkages before they place orders for boilers, turbines and generators (BTG). Besides, issues of land clearances and land pricing need a re-look after passage of the new land bill that led to increase in land prices to unviable levels,” said the BGR official.
BGR Energy-Hitachi JV at present has around 3,000 mw of orders from NTPC. However, the projects have not taken off as the company is still waiting for the right environment that would sustain their investment. “We will start our operations after September 2015, since we expect the new government to heed our demands. Even if action is taken on immediate basis, it may take another 8-9 months before the changes are visible,” said the BGR official.
The JSW Toshiba joint venture in which Toshiba has controlling stake is also operating at sub-optimal capacity after the company announced doubling the capacity in 2012 to 6,000 mw. “The slowdown has affected our performance since demand has dropped over the last couple of years,” said a JSW Energy official. The spokesperson of Toshiba, Kaori Hiraki, could not be contacted on phone to confirm this.
The L&T joint venture with Mitsubishi is operating at only 30-35 per cent capacity. “The joint venture is affected by the overall slowdown and our power business is not fully optimised yet. Though we did bag an EPC order worth Rs 2,000 crore recently from Bangla-desh,” said the L&T spokes-person.
TC Arora of Accunergy, a Delhi-based power consultancy firm, says the major issue facing the industry is Chinese competition. “Their companies are supplying at a much lower price, making Indian manufacturers highly uncompetitive,” he says
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