Home News Technical Articles Interviews Cover Story Orders & Contracts
   
Equipment
Power Generation
International
Green Energy
 
NEWS  INTERVIEW

There is scope to make L1 policies more transparent

Venugopal Pillai ,  Wednesday, April 27, 2011, 17:13 Hrs  [IST]

K.S. Varma.jpg— K.S. Varma, Chairman & Managing Director, Arrow Cables Ltd

Arrow Cables is a premier manufacturer of cables and conductors in south India, with a very wide range of product offerings. K.S. Varma, in an exclusive interaction with Venugopal Pillai, offers keen insights into the cable and conductor industry, whilst sharing his vision and plans for Arrow Cables. Varma makes very pertinent observations of the procurement process of government power utilities, and maintains that the government could do much to bring in transparency and healthy competition.

To begin with, please tell us in brief about the various types of cables and conductors produced by Arrow Cables.
Arrow Cables Ltd is one of the premier manufacturers of cables and conductors in Andhra Pradesh and south India. We deal in various types of cables and conductors, such as:

PVC Cables: These are traditional cables used by industry and buildings. Poly Vinyl Chloride (PVC) is the most accepted insulation in the industry. But very recently there is a shift from these traditional PVC cables to much superior HDPE (High Density Polyethylene) cables, FRLS (Fire Retardant Low Smoke) cables and XLPE (Cross linked Polyethylene) cables. ACL manufactures all PVC LT cables up to 1.1kV, control cables and mining cables up to 3.3kV

XLPE Cables: These cables are the most recent, equipped with XLPE (Cross Linked Polyethylene) insulation. This insulation is considered much superior to the PVC cables because it is more resistant to stress cracking and also fights ageing in hot air. ACL manufactures all XLPE LT cables up to 1.1kV, and control cables.

AB Cables: Ariel Bunched Cables is a very novel concept for overhead power distribution, when compared to the conventional bare conductor overhead distribution system. AB Cables provide higher safety and reliability, lower power losses and ultimate system economy by reducing installation, maintenance and operative cost. This system is ideal for rural distribution and especially attractive for installation in difficult terrains such as hilly areas, forest areas, coastal areas etc. ACL manufactures all AB Cables up to 4 cores and 95 sqmm

ACSR Conductors: Aluminium Conductor Steel Reinforced conductors are the most successful and widely used for LT and HT transmission lines. These conductors have a steel core inside surrounded by strands of aluminium outside. ACL manufactures ACSR Conductors up to 61 strands for 1.1kV and for extra high voltage up to 400kV.

AAA Conductors: All Aluminium Alloy Conductor is made from aluminium-magnesiumsilicon alloy of high electrical conductivity to give better mechanical properties after treatment. ACL manufactures AAA conductors up to 61 strands for voltages up to 1.1kV.

Untitled - 67.jpgGiven that the Indian power transmission sector is witnessing substantial investment in the coming years, how do you gauge the future demand for aluminium conductors? Are you planning any capacity expansion to meet the growing demand?
Power is one of the most necessitated commodity these days. We cannot think of the world without power. Power production is a challenge and supplying to the customer is double the challenge. The pace at which the power generation capacity is being added is a clear indication of our growing economy. But the power generated should be transported to the customer through the transmission lines which off-late are being called as "power super highways." India is way behind the developed nations in the creation and operation of these power super highways. The proof to this lies in the transmission and distribution (T&D) losses that we are surviving with. These losses are anywhere between 5 per cent to 30 per cent. Thus, there is So more scope in creation of power infrastructure ahead of meeting the huge power generation which is to come by.

Regarding our capacity expansion, ACL has a plant located strategically in the Hyderabad which is near center of the country giving it a tremendous scope to spread to any side of the nation. It has the capacity to manufacture various types of cables and conductors thus processing around 3,470 tonnes per year. The plant has always been operating at more than 80 per cent capacity. ACL is now planning to hike the capacity for conductors and cables with plans to set up units in a phased manner across the country to meet requirements of various power utility and distribution companies

In the industrial sector, which segments do you regard as your major business drivers?
Industries which are always power-starved are considered as business drivers for power and subsequently percolating to the requirements of cables and conductors. We regard the major energy consuming industries as being steel, chemicals, non-ferrous metals and building materials.

Several Indian cable manufacturers are seen to be moving into production of EHV cables, mostly with multinational collaboration. Do you have any longterm plans to this effect?
Extra high voltage cables command premium in the market, which comes with lot of sophistication in technology thus inducing tie ups and joint ventures with multinational giants. It is most common, in any field, to always aim for import substitution and bring latest technology to benefit this large population. We also want to be a part of it provided we get a right partner who will understand our priorities and values.

Untitled - 68.jpgArrow Cables has been catering to government-owned power utilities as well as private electrical contractors. What basic "culture difference" do you perceive whilst dealing with these two forms of ownership?
ACL initially only dealt with government owned private utility companies where everything was procured and installed by them. The private electrical contractors have entered into electrical transmission installations, when the power distribution and transmission utilities have announced a turnkey mechanism. Culturally, it is a class apart to deal with power utilities and private electrical contractors. Dealing with power utilities involve high bureaucracy but on the advantageous side is a financially-secured play. But dealing with electrical contractors is always with finance-related struggles, but is administratively very fast and result-oriented.

ACL personally favors dealing with government-owned power utility companies and never minds to pass on the last penny to deal with them. However many others seek to have a premium dealing with private contractors for the financial risk that they bear with them.

Government utilities, as we perceive, are bound by the L1 criterion in their procurement routines. This sometimes leads to compromise on quality. What is your view or experience?
For any policy made, there are two sides and "L1" is no exception. The L1 criterion secures the utility company of financial competitiveness, but on the flip side, "may" affect quality. I am emphasizing on "may" because we cannot say for sure that all material supplied at L1 rate shall be of poor quality.

Untitled - 69.jpgIn India this L1 is also not transparent. Not that we are backward in e-procurement, but on the other terms and conditions, which are placed as qualification. The utility companies place some conditions such as past performance which does not encourage new players and on the other side the utility company also struggles with old suppliers. It is like wanting experience without giving a job. If such performance and qualifications are reviewed, you can have both L1 benefits and zero-compromise on quality.

What are the typical challenges faced by the cable and conductor industry? What type of government support would you seek to overcome at least some of them?
It has been often told in many industry forums that the life of a cable and conductor company is like a sandwich. You have the suppliers on one side as primary metal and insulation material manufacturers and customers on other being power utility companies (directly or through private electrical contractors). You cannot dictate terms to your suppliers who are Nalco, Balco and Hindalco for aluminium, Hindustan Copper and Vedanta for copper, and finally Reliance and IPCL for polymer products. At the same time you have to be diplomatic with your customers who are government utility companies and private electrical contractors who again serve the utility companies, except for few who serve the private companies, industries etc

Untitled - 70.jpgYes, there is a lot for the government to do in this regard. On the suppliers' side, the government has to see that the products which are primary raw material to many industries like metals, polymers in our case should have sufficient independent competitors and auto policing should be fixed in such a way that any deviation will be punished with imports. At the same time the government utility companies have become too huge a size of manageability. They can be streamlined with proper reforms and introduction of public private partnerships in the field of transmission and distribution of power.

Arrow Cables, as we perceive, has been a south India-centric company. What are your plans of spreading your geographical footprint?
Yes, ACL has been a south-centric company till recently. We are now in a stage of spreading the wings to other parts of the country. Our plans to establish small units in different parts of the country only emphasize this. Requirements of the power utility companies of various states are different and meeting them all is a challenge, which we have to face shortly.

Untitled - 71.jpgArrow Cables has been in the cable/conductor supply business for 15 years now. Do you have any plans of entering the power T&D contracting space?
We are in the supply of cable and conductors for many years now. We realize the importance of the scope for improvement. We still have a long way to go in the supply business before venturing into any contracting. In the near short to medium term, we are willing to concentrate on our core strengths of supply.

Please summarize your growth plans and your corporate vision for the next (say) five years.
Our focus during these years of existence has been to supply quality products to power utility companies and departments. Our existence in the private projects has been very limited. We would like to fill the vacuum and venture for supply to many private projects and contractors, while maintaining the ethics of quality intact.

Apart from this, we want to meet requirements of the Railways in the near short term. As a long term plan, we would like to provide specialty cables and conductors meeting the ever increasing needs of a variety of customers.
 
                 
Post Your RemarkYOUR REMARK
*Name:    
* Email :    
  Website :  

Remark

 
 
           

© 2017 Electrical Monitor. All Rights Reserved.