NTPC's Equipment Orders Stalled as Problems Surround Power Projects

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Written by Richard Finlayson, Senior Editor for Industrial Info Resources (Sugar Land, Texas)--NTPC Limited (BSE:532555) (New Delhi, India) has not placed any orders for equipment for the past two years because of unresolved issue surrounding projects, including lawsuits , land acquisition and permitting and coal linkages to provide secure coal supplies.

For related information see February 3, 2012, article - India's Coal Minister Asks Power Minister to Freeze Power Projects' Coal Linkages.

With equipment needed for new projects already specified, the hiatus in actually placing orders is causing problems along the length of the project supply chain and is severely crimping the company's ability to create additional power to meet gaps in power supply. NTPC currently has an installed power capacity of 36,140 MW and another 14,088 MW under construction. Future installed capacity targets are 75,000 MW by 2017 and 128,000 MW by 2032.

In the two-year period since 2009, only one minor order for a hydropower project in Singrauli was made. Equipment representing 16,192 MW is in the tendering process. Plans have been made to award a further 40,000 MW of equipment orders during the 12th Five-Year Plan (2012-17).

The reasons for delays in the process are beyond the control of NTPC says Chairman and Managing Director Arup Roy Choudhury, who added that there were two bulk tenders for nine 660-MW units and nine 800-MW units under finalization . These units will supply eight projects that are being held up by the issues mentioned above, including land acquisition.

There are also problems in placing orders for 11 boilers and 11 660-MW turbines, with one of the bidders, Ansaldo Caldaie Boilers India (Milan, Italy) being disqualified on technical grounds with the high court in Delhi directing NTPC not to proceed with commercial bids until the issue was decided but then allowing Ansaldo to bid for boilers. This is now being contested by NTPC in the Supreme Court.

NTPC is confident that it will exceed the 9,220-MW target for the 11th Five-Year Plan (2007-12) and is awaiting finalization of plan targets by the government.

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