L&T-Mitsubishi gets first order

Chennai, June 18 The joint venture of L&T and Mitsubishi Heavy Industries is all set to secure its first order for super-critical steam turbine and generator from Andhra Pradesh Power Generation Corporation Ltd (APGENCO). The order is worth Rs 1,557 crore.

Mr Ajay Jain, Managing Director, APGENCO, said that the order would be formally given to L&T-MHI over the next few days. The equipment is for APGENCO’s 1,600-MW (2x800 MW) Krishnapatnam project.

This is significant in two ways. First is that it will be L&T’s first order for power equipment. In November 2007, the Indian engineering major formed a joint venture with Mitsubishi Heavy Industries to manufacture turbines and generators in India. And now, it has got its first customer.

The second is that it has put the Indian power equipment major, BHEL, on notice. “This is a wake up call for us. We are not taking it lightly,” Mr K. Ravi Kumar told Business Line on Wednesday. L&T-MHI’s quote was a good Rs 500 crore less than BHEL’s Rs 2,505 crore.

For a company that is sitting on orders worth Rs 97,000 crore, losing an order is no big deal. However, this is a “wake up call” because it is for an 800-MW plant, where BHEL is yet to win its first order.

It lost the bid for Tata Power’s Mundra project — the equipment order for five units of 800 MW went to South Korean company Doosan. BHEL will of course produce boilers, turbines and generators for three projects in Tamil Nadu, Gujarat and Orissa, but these are all BHEL’s joint ventures with the respective State electricity boards.

APGENCO tendered out for two packages —one for turbine-generator and the other for boilers. The bid for the boilers is to be opened on July 4. Here again, the race is only between BHEL and L&T.