India's Larsen & Toubro Secures Yet Another BOP Power Contract

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Researched by Industrial Info Resources (Sugar Land, Texas)--Engineering, construction and technology major Larsen & Toubro Limited (BSE:500510) (L&T) (Mumbai) has secured a $326 million balance of plant (BOP) contract from DB Power Limited (Bhopal, Madhya Pradesh), a group company of the diversified Bhaskar Group (New Delhi). The contract is for DB Power's 1,200-megawatt (MW) thermal power plant, which is being set up at Baradarha, in the Janjgir-Champa district of Chhattisgarh. DB Power will source the coal for the project from its captive coal mine in the state.

The BOP includes all the equipment required for the safe operation of a plant, including the technical coordination of different sections of the power plant.

L&T won the 31-month BOP contract following an international competitive bidding process that had several domestic bidders in the fray. Under the scope of the contract, L&T will design, engineer, supply, erect, and commission the BOP equipment and systems, and manage all associated services, on an engineering, procurement and construction basis. The list of tasks includes the BOP civil, architectural and structural work; the boiler-turbine-generator package; chimney, natural-draft and cooling towers; coal- and ash-handling plants; and BOP electrical works and switchyard.

L&T engineers and manufactures a large number of the listed packages, and is a leading supplier of most of them. The company attributes seeing success in the power so soon after entering it to its strengths in project execution, construction, design, engineering, on-time delivery, and quality and safety standards.

L&T is involved in other subcritical BOP contracts, as well as in many large supercritical BTG/EPC projects. In 2009, L&T formed a joint venture with Mitsubishi Heavy Industries Limited (TYO:7011) (Tokyo, Japan) for the production of supercritical boilers and turbines. The company also has set up supercritical manufacturing facilities at its Hazira plant in Gujarat. The plant can now manufacture crucial equipment such as coal pulverizers, heavy forgings, high-pressure piping, and electrostatic precipitators.

In September 2010, L&T secured a $362 million BOP contract from private power developer Visa Power Limited (Kolkata, West Bengal), for the latter's 1,200-MW thermal power plant, which is to be set up at Raigarh, in Chattisgarh. The contract is scheduled to be implemented in 29 to 32 months. The scope of the contract is similar to the recently acquired DB Power contract.

In November 2009, L&T was awarded another $367 million turnkey BOP contract by the state-operated Madhya Pradesh Power Generation Company Limited (Jabalpur, Madhya, Pradesh) for its 1,200-MW, coal-fired power project being developed at Malwa, in the Khandwa district of Madhya Pradesh. The scope of the contract involves effluent treatment plants; coal- and ash-handling plants; switchyards; cooling towers; circulating water and raw water intake systems; and civil works, among others.

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