Press Release


BHEL Takes Over BHPV; Signs MoU with APGenco for setting up Nation's biggest 125 MW Clean Coal Power Plant

Navratna engineering and manufacturing enterprise, Bharat Heavy Electricals Limited BHEL has formally taken over Bharat Heavy Plate and Vessels BHPV. The Authority Letter to this effect was handed over by Dr. Satyanarayana Dash, Secretary, Department of Heavy Industry to Mr. K. Ravi Kumar, Chairman and Managing Director, BHEL, in Visakhapatnam on May 10, 2008, in the presence of Sh. Sontosh Mohan Dev, Honble Union Minister for Heavy Industries and Public Enterprises, Sh. P. Chidambaram, Honble Union Minister for Finance, Sh. Y.S. Rajasekhara Reddy, Honble Chief Minister of Andhra Pradesh and Sh. S. Jaipal Reddy, Honble Union Minister for Urban Development. Sh. Jairam Ramesh, Honble Union Minister for Commerce and Power, Sh. Konathala Ramakrishna, Honble Minister for Commercial Taxes, Govt. of Andhra Pradesh, Sh. Shabbir Ali Mohd., Honble Minister for Energy, Coal, Minorities Welfare, Wakf, Urdu Academy, Govt. of Andhra Pradesh, Sh. Sitaram Yechury, Honble Member of Parliament, Sh. N. Janardhana Reddy, Honble Member of Parliament, Dr. T. Subbarami Reddy, Honble Member of Parliament and Sh. G. Sanjeeva Reddy, Honble Member of Parliament and President, INTUC, graced the occasion. Sh. S.V. Prasad, Chairman, APGenco, MD, APGenco, Directors on the Board and other senior officials of BHEL, BHPV and the Ministry of Heavy Industries and Public Enterprises, were also present. A Memorandum of Understanding for setting up the Nations Biggest Integrated Coal Gasification Combined Cycle IGCC Power Plant at Vijayawada, was also signed between BHEL and APGenco. Expressing his happiness at BHELs progress in preparing itself to meet the future challenges in the power sector, Sh. Sontosh Mohan Dev said in his Presidential address that the company has augmented its power equipment manufacturing capacity from 6,000 MW to 10,000 MW per annum in December 2007 and is well on its way to enhancing it further to 15,000 MW per annum by 2009. Today we are also crossing a milestone in power generation technology with the signing of MoU between APGenco and BHEL for setting up a 125 MW IGCC demonstration plant at Vijayawada, he said. Synergy is the key word associated with Mergers and Acquisitions and I see a major role for BHPV in complimenting the other Units of BHEL in keeping in pace with the Govt. of Indias power generation capacity addition programme, he added. About the MoU signed by APGenco and BHEL, Sh. Dev said that with APGencos technical capability and expertise in running thermal power plants, and BHELs expertise in technology development and power plant equipment manufacturing, the proposed IGCC Demonstration plant will pave way for new trends in power generation. Earlier, in his welcome address, Sh. K. Ravi Kumar, CMD, BHEL said that BHEL has taken India from a position of total dependence on overseas resources to complete self reliance in power generation. Today, India is the only other developing country besides China, which produces the full range of electric power generation and transmission equipment. He said that BHEL has embarked on several initiatives in order to be in a position to meet the growing demands of the countrys power sector. As per the Strategic Plan 2012 adopted by the company, we envisage Power Sector to contribute 70 per cent to the companys turnover by 2011-12 with 30 per cent contribution from Industry related businesses taking BHELs sales turnover to Rs.450,000 Million by 2012, Mr. Ravi Kumar said. He added that as setting up another manufacturing plant would need massive greenfield investments and long gestation time, supporting an existing entity like BHPV makes better business sense where economies of scale can be achieved by enhancing the capacity with brownfield investments. We are confident of meeting the capacity addition targets for the 11th Plan period, with BHPV complimenting our business as a part of the BHEL family, the CMD said. The market for BHPVs products, especially in process equipment and cryogenics, is expected to grow rapidly. BHPV has been handicapped due to its financial constraints in participating in some tenders, which would be mitigated once the financial restructuring is completed and BHEL takes over. With BHEL Trichy unit heavily booked with orders for boilers in the utility segment, BHPV can be developed as a dedicated centre for industrial boilers, ensuring better delivery. Though the current cost structure of BHPV is similar to BHEL, costs are expected to come down due to factors like increased volumes, better financial capability leading to lower working capital borrowing costs, etc. With a capital expenditure of Rs.2,360 Million, spread over three years, in addition to induction of experienced manpower and required technology from BHEL, BHPVs turnover is expected to cross Rs.10,000 Million in 5 years. BHEL has also signed an MoU with one of its customers, APGenco for setting up a 125 MW demonstration plant based on IGCC technology. The technology substantially reduces air pollution, water consumption and solid waste production compared to conventional coal based power plants. These and other attributes make it an important technology for the future. APGenco has also taken many pioneering initiatives in the past like tower type boilers with concrete columns, tube type pulverisers etc, successfully. The existing coal based plant installed by BHEL at Vijayawada for APGenco holds many national and international records. BHEL has been committed to the nations power development programme and has reaffirmed its commitment to the Indian Power Sector by equipping itself for the future, by way of technology, facilities and trained manpower to meet the countrys power forecast for the 11th Plan and beyond.

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