India's BHEL, Larsen & Toubro Secure Power Project Contracts from Visa Power

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Researched by Industrial Info Resources (Sugar Land, Texas)--Emerging private-sector power developer Visa Power Limited (Kolkata, West Bengal) has awarded contracts for a 1,200-megawatt (MW) thermal power plant, which is to be set up at Raigarh in Chattisgarh, to engineering majors Larsen & Toubro Limited (BSE:500510) (L&T) (Mumbai) and Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi).

BHEL has secured a contract valued at more than $592 million to supply, install and commission the main equipment for the plant. As part of the agreement, BHEL will undertake engineering, construction, delivery, erection and installation of boiler, turbine and generator packages and allied control equipment for the power project. L&T, which has secured a $358 million order through an international competitive bidding process, will undertake engineering, design, supply and commissioning of the balance of plant equipment for the project. The scope of the L&T contract includes ash- and coal-handling units and architectural, electrical, civil and structural works. L&T is expected to implement the contract in 29 to 32 months. Reports indicate that the company has secured coal allocation from the Fatehpur East coal block in Chhattisgarh.

In a related development, L&T has secured a $1.44 billion contract from Jaiprakash Power Ventures Limited (Noida, Uttar Pradesh) to supply the boiler, turbine and generator package for the Karchana supercritical power plant in Uttar Pradesh. The contract is expected to be completed in 48 months.

L&T and Befula Investments (Pty) Limited (Durban, South Africa) have proposed a joint venture to undertake transmission and distribution projects in South Africa. The joint venture company will construct 400/765-kilovolt transmission lines that will augment South Africa's national electricity grid. According to Ravi Uppal, the chief executive officer of L&T's power division, as of August 2010, the division's order book value was about $5.78 billion. The company's total order book value was about $22.28 billion.

B. Prasada Rao, the chairman and managing director of BHEL, indicated that the company's cumulative order book value is about $32.01 billion. In 2009-10, BHEL secured orders for 16,689 MW of new power generating equipment, of which nearly 90% of the orders were placed by private-sector power producers. In 2010-11, the company is targeting an investment of $266.7 million on research and development. BHEL also has secured a $592.4 million contract to supply the main plant package for a 1,200-MW thermal power plant being constructed by Dainik Bhaskar Power Limited (Mumbai), in Chhattisgarh's Janjgir district.

Visa Power, which is part of the diversified Visa Group (Kolkata, West Bengal), is also constructing a 1,320-MW power generating facility in Orissa and is planning a 2,500-MW power plant in Chhattisgarh and a 1,320-MW power project in Gujarat, using imported coal. Visa Group, which has business interests in international trading, logistics, mining, steel and shipping, has operations in Australia, Singapore, India, South Africa, China and Indonesia.

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