BHEL’s renewed thrust on Spares & After-market Services pays off; Order inflow from services sector surges 53%.

Bharat Heavy Electricals Limited (BHEL) has achieved an all time high order booking of Rs.14500 Million from the services sector in fiscal 2004-05, - a quantum jump of about 53% over the year before. With services emerging as the economy's new growth engine, BHEL has adopted a focussed approach to tap opportunities in the area of after-market services.

BHEL’s strategy of refocusing its energies on the services sector will help in enhancing availability of power in the country, besides improving the company's bottomline. It assumes significance as pressure on existing installations is mounting to keep pace with demand.

To bridge the increasing gap between demand and supply of power and to provide prompt and efficient services to Utilities for renovation and modernization (R&M) of old power plants, BHEL has fully established expertise and equipped itself with state-of-the-art technology for after-market services viz. Overhauling, Retrofitting, R&M, Uprating, Residual Life Assessment & subsequent Extension, Operation & Maintenance (O&M), Repair and Spares services. A positive impulse for growth in this segment has also come from the Ministry of Power, through the Accelerated Power Development & Reform Programme (APDRP).

Life Extension, Uprating and R&M of power plants is a low cost option for increased generation from existing power plants and is crucial in the context of the prevailing energy shortage. As per recent findings of the Central Electricity Authority, over twenty percent of the existing utilities in the country constituting around 25,000 MW have low availability and are due for revamping to extend their life-span, enhance efficiency, optimize the use of fuel and reduce emissions. These include sets from USA, Europe, Japan and the erstwhile USSR. This translates into a business potential of an estimated Rs.100,000 to Rs.150,000 Million.

Retrofitting of power plants by BHEL not only revives the ageing power plants but also helps in operating them at higher levels of productivity. Renovation is carried out at less than one-third of the cost of setting up a new power plant and in one-third the time. The company recently achieved a milestone with the renovation and modernization of 4 units of 110 MW each at Kothagudem TPS in Andhra Pradesh. All the four units have been uprated from 110 MW to 120MW, prior to which, they were generating just 90-95MW at less than 60% PLF.

Significantly, having supplied nearly 65% of India's total installed power generating capacity, BHEL is well positioned to obtain future R&M business. Another significant advantage for BHEL is its established service network, spread across the country. A power plant with substantial degree of moving/rotating components requires frequent servicing & spares. Proximity of service centres, which helps in reducing plant downtime, is also a significant structural advantage. BHEL has also carried out overhauling, R&M & life extension of power plants in several countries like Malaysia, Bangladesh, Iraq, Libya, Malta, Cyprus, Saudi Arabia, Nepal, Bhutan & Thailand.