Idea of creating Bhel clone ironic: CMD

Amid the debate on creating another state-owned power equipment manufacturing company, Bharat Heavy Electricals Ltd dubbed the idea as 'ironic' on Friday and said a company of its size would require an investment of at least Rs 20,000 crore (Rs 200 billion).

"Do we need another such company when Bhel operated below its capacity all through 40 years of existence for lack of demand in the country," Bhel Chairman and Managing Director A K Puri told PTI when asked about power ministry's indication to set up a Bhel clone for adding massive generation capacity.

Both Power Minister Sushilkumar Shinde and Secretary R V Shahi have said in the past that Bhel, country's largest power equipment manufacturer with more than Rs 40,000 crore (Rs 400 billion) of orders in hand at present, was 'overburdened' and there was a need to establish another state-owned supplier.

In fact, power ministry has already asked the National Thermal Power Corporation Ltd to venture into equipment

manufacturing. Although it was for the government to take a call, the Indian market was competitive with global vendors like Alsthom, Siemens and GE already present, Puri said.

Asked as to what it would take to set up a company like Bhel, which has a turnover of Rs 17,000 crore (Rs 170 billion) and a profit nearing Rs 2,000 crore (Rs 20 billion), he said: "Any new company of the size of Bhel would require a fresh investment of Rs 20,000 crore."

Bhel's manufacturing capacity would increase to 10,000 MW annually by 2007 from 6,000 MW now, which has generally remained underutilised, Puri said, adding only this year for the first time "we may operate to full capacity."

It would be cheaper for Bhel to create fresh capacity through brownfield expansion than any new player to start on its own, he said.

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