Power purchase shrinks BHEL’s profit

Power major BHEL finds itself in an ironical situation of purchasing electricity at high costs from independent producers to make up for the 10 per cent shortage at its Tiruchi unit.

This was one of the major reasons for the not-so-impressive performance of the Tiruchi Complex in 2012-13. The State government had initially imposed 40 per cent power cut on BHEL Tiruchi because of which it had to alter its work schedule. Subsequently, the government brought down the shortage level to 10 per cent to enable the Maharatna company to expedite its projects in hand.

Although the decline in orders has been perceptible, there are a handful of projects that BHEL Tiruchi has to complete by all means since the time overrun in delivery of boiler sets to customers, particularly to State utilities, has dented its image.

The Tiruchi unit could not afford any let up in its manufacturing process and had to depend on power supplies from independent producers as the cost of idle manpower would turn out to be much more, BHEL sources said.

Official sources said the proposed tie-up between the BHEL and the National Thermal Power Corporation (NTPC) for installing a 100 MW power plant based on clean coal technology would rescue the Maharatna company and its ancillaries from the power shortage situation in the long run.

The proposal had generated appreciation within BHEL circles.

“At a time when NTPC has bid for coal blocks to sustain the momentum of its power generation, a captive power plant owned by BHEL will definitely add value because it will be in a position to demonstrate to customers the positive impact of the research on clean coal technology at its Coal Research Centre,” a BHEL source said.

“Ancillary industries, whose efforts in the last couple of years to establish a captive power plant of 30 MW capacity could not fructify, desire that the proposed 100 MW plant should be based in Tiruchi.

With only nine to 10 hours of power supply a day, the ancillary units are functioning to only 30 to 40 percent of their capacities.

“Cash flow has dwindled and we are unable to take forward our proposal for starting the multi-fuel based 30 MW power plant.

Ancillaries will be able to break even only if they work to at least 70 per cent of their capacities. We earnestly desire that the BHEL starts its captive unit to serve Tiruchi region,” the former president of BHEL Small Industries Association Rajappa Rajkumar said.