Power equipment order to top $26 billion

KOLKATA, INDIA - India's largest power producer, NTPC Limited, will place bulk orders for nine 660-megawatt MW power-generating sets, including boilers, turbines, and generators, worth $26 billion by January-February 2011.

This will be the first set of $33.6 billion in equipment that the NTPC has targeted to purchase by April 2011.

Company officials said that global tenders will be floated for procurement of equipment. NTPC has a "source neutral" policy on the origin of equipment, and sole selection criteria are technology and competitive parameters. The focus of the procurement will be to establish pioneering dominance in 660- to 800-MW supercritical units and ultra-supercritical units, 1,200-kilovolt switchyards, and high-concentration ash slurry disposal systems.

Foreign equipment suppliers will have to adhere to the new directives of the Indian regulator, the Central Electricity Authority's Phased Manufacturing Program PMP. Under the PMP, to be qualified as an equipment supplier, overseas manufacturers should have a registered company in India or an Indian joint venture partner. The bidder shall have to give a commitment to indigenize manufacturing of supercritical equipment within India over a period of time.

If supplies are made through a joint venture with an Indian company, there should be a firm technology-transfer agreement between the overseas supplier and the Indian company. Officials said that no specific percentages on the level of indigenization every year need to be submitted by foreign suppliers. The PMP guidelines have been laid down in response to demands of domestic power equipment manufacturers and to ensure the development of a domestic vendor base for spares and services.

Officials said that NTPC's total equipment procurement of $33.6 billion by April was for 8,460 MW of new generation capacity where feasibility reports have been approved by the government. Subsequently, additional equipment orders will be placed in 2011 for 5,300 MW of new capacity that is currently awaiting government approval, and 13,000 MW of capacity for which feasibility study reports are being prepared. These new projects are part of NTPC's corporate plan to increase installed capacity to 75,000 MW by 2017 from its current generating capacity of 32,194 MW.

In response to NTPC's global tenders floated earlier this year, Alstom-Bharat Forge Limited, a joint venture of Alstom SA and Bharat Forge Limited, has bagged a $1.77 billion order for supply of turbine-generators. Alstom-Bharat Forge will also sign an agreement with NTPC later this month to supply five 660-MW turbine-generators at an estimated value of $2.1 billion.