Sick ancillary units stay afloat

Bagging of some attractive orders in succession in recent months by Bharat Heavy Electricals Limited (BHEL) has enabled some ancillary units in Tiruchi that were in the red to sustain their operations.

Though the BHEL Small Industries Association (BHELSIA) had reservations on the rates, some of its member units had chosen to continue getting conversion orders from the BHEL's Outsourcing Department to keep their bank accounts in ‘active’ mode, its president Ashok Sundaresan said.

A sizeable number of units had given acceptance to BHEL to carry out the conversion works. For some, sustaining the activities was vital to stave off pressure from banks to settle pending term loans and other borrowings, Mr. Sundaresan said. Some of the units were under compulsion to justify their turnover, he said.

The key equipment for the major orders bagged in recent months by BHEL are to be fabricated in its Tiruchi unit as well. The projects include the Rs. 11,700-crore order for setting up a 3 x 800 MW supercritical thermal power plant in Jharkhand; the order for setting up a 1x660 MW supercritical thermal power plant in Uttar Pradesh valued at approximately Rs. 4,400 crore; the prestigious Rs. 1,034 crore contract placed by Hindustan Petroleum Corporation Limited (HPCL) for setting up a Gas Turbine based Captive Power Plant on Lump sum Turnkey (LSTK basis) for its Visakh Refinery expansion project at Visakhapatnam, Andhra Pradesh; and an order worth Rs. 736 Crore for supply of Steam Generators from Nuclear Power Corporation of India Limited (NPCIL)

Significantly, the project for Jharkhand was the single largest order ever placed by NTPC or its subsidiaries and the second largest order ever won by BHEL.

Source