BHEL is pursuing joint ventures with utilities run by State governments to boost sales. The public sector company has signed several joint venture agreements with utilities to “leverage sale of equipment,” said BHEL Chairman and Managing Director B. Prasada Rao here on Monday.

Mr. Rao said the company had signed an agreement for three units of 800 MW each with the Karnataka Power Corporation Ltd., of which orders for two units had already been placed with BHEL.

The company had taken a 26 per cent stake in the joint venture, which had already placed orders for equipment worth Rs. 6,000 crore, Mr. Rao added. The cost of the project is about Rs. 12,000 crore, he said.

He said BHEL had signed similar agreements with utilities in Tamil Nadu and Madhya Pradesh (for two units of 800 MW each) in each of the two States, and in Maharashtra for a gas-based power project of 1,500 MW. BHEL has taken a 26 per cent stake in utilities run by the state governments. “We are yet to decide on terms for similar agreements with utilities in Andhra Pradesh and Gujarat,” Mr. Rao said.

Explaining the constraints faced by the company, Mr. Rao said availability of electrical grade steel, which is used in castings for turbo gensets, “is an issue.” The company needs about 40,000 tonnes annually, while annual demand is about two lakh tonnes.

“There is only one small Indian producer, which means most of the material has to be sourced from overseas,” Mr. Rao said.

BHEL is at present implementing a capacity expansion — from 15,000 MW to 20,000 MW by 2012 — involving a capital expenditure of Rs. 1,600 crore. Asked about competition from the private sector, Mr. Rao said, “The market is growing, we are not worried about competition.” “Our success rate in competitive biddings is 90 per cent,” he said.

Mr. Rao said the company was recruiting 4,000 persons annually in the last few years — 1,000 officers, 1000 supervisors and 2,000 workmen. “We are also expanding the number of registered vendors,” he added.

Keywords: BHEL

More In: Companies | Business