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Bharat Heavy Electricals Ltd has
begun the process of winding
up its joint venture with Tamil
Nadu Electricity Board meant for
setting up the 2x800-mw Udangudi
supercritical thermal power project in
the southern state.
In October 2007, the two partners
had come together incorporating the
joint venture Udangudi Power
Corporation Ltd to implement the
Rs.8,500-crore project taking shape at
Udangudi in Thoothukudi district.
Both partners held 26 per cent equity
while the remainder was to come from
financial institutions.
The Udangudi project did see some
progress, but not significant, since the
signing of the JV agreement. The Tamil
Nadu government had alienated land,
coal linkages were in process and major
pre-project consultancy mandates were
awarded. The project had also secured
environmental clearances and the PPA
between Tangedco and UPCL was also
signed, according to information
available from reliable sources.
However, at the time of signing of the
MoU, the first unit of 800-mw
was envisaged to commission before
March 2012.
In February year, TNEB decided to
end the partnership with BHEL and
expressed that it would implement the
project on its own. The power utility,
according to reports, had cited "lack of
co-operation from BHEL" as the reason
to part ways. BHEL subsequently
requested TNEB to reverse its decision
but that did not happen.
For BHEL, this development could be
considered as a setback since it was
amongst the company's early attempts
in establishing itself as a developer of
power projects, rather than just an
equipment supplier. With the JV now
on its way to dissolution, BHEL has
another chance to see itself groom as a
power developer, through the JV that is
with Karnataka Power Corporation Ltd.
In January 2009, BHEL and the
Karnataka power utility entered into an
agreement to form a joint venture that
would develop the 2x800-mw Raichur
supercritical thermal power project at
Bellary. The project in which BHEL is a
minority partner with 26 per cent is
under execution.
It may be recalled that BHEL
sustained a big blow in its capacity as
equipment supplier when Rajasthan
Rajya Vidyut Utpadan Nigam rescinded
a Rs.12,200 crore order that it had placed
on BHEL. The order for supplying
supercritical boilers and TG sets for two
of RVUNL's projects—Suratgarh
(2x660-mw) and Chhabra (2x660-mw)
—was placed in January 2011. BHEL
had won the order through the ICB
route. According to information
compiled by Electrical Monitor, BHEL has
a current outstanding order of
supplying supercritical-grade power
equipment for 8,520 mw of projects,
now excluding the Udangudi project.
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