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Domestic power gear making capacity remains underutilised: BHEL

Last Updated: Wednesday, November 28, 2012 - 16:20

New Delhi: Making a strong case against cheaper imports, state-run power equipment maker BHEL has said that most of the domestic manufacturing capacity remains underutilised on account of various power sector woes.

BHEL Chairman and Managing Director B P Rao said domestic power gear makers, including itself, are well equipped to meet the 88,000 MW generation capacity addition target set by the government for the 12th Plan (2012-17).

According to him, BHEL itself has got 20,000 MW, while Larsen & Toubro has about 5,000 MW. Besides, Bharat Forge-Alstom and other joint venture companies for power equipment have also committed capacities.

"About 10,000 MW is under construction by all these companies... (but) there is no market for this (nearly) 40,000 MW," Rao said in an interview.

He said underutilisation of existing capacities was the key reason behind the government's move to impose higher duty on imported power equipment.

"They (government) are aware that these capacities are available today and they are much more competitive... (with increased imports) these capacities will be underutilised, they are being underutilised even today," Rao said.

Land acquisition problems, environmental clearances, funding constraints and poor health of discoms, among other issues, are hurting the domestic power sector.

Earlier this year, after much deliberations, the government slapped 21 percent duty on imports of power equipment, mainly to protect domestic companies from cheap Chinese shipments.

The government approved 5 percent basic customs duty, 12 percent counter-veiling duty and 4 percent special additional duty on import of power gear.

Recently, Minister of Heavy Industries and Public Enterprises Praful Patel had said that BHEL is facing some difficulties on account of the delay of new and under construction power projects.

He had informed Parliament that his Ministry is taking up issues of BHEL with the other ministries, for providing a level playing field vis-a-vis foreign suppliers of electrical equipment.

Meanwhile, Rao said the company is hopeful of achieving the capital expenditure target of Rs 1,000 crore for the current financial year.

"We are going to meet our targeted capex of Rs 1,000 crore for this fiscal," he said.

In the last fiscal, the company reported a net profit of Rs 7,040 crore on a turnover of Rs 49,510 crore.


First Published: Wednesday, November 28, 2012 - 16:20
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