NTPC's plans to add capacity may boost power equipment firms.

In what will help revive demand in the Indian capital goods sector, state-owned NTPC Ltd. plans to place orders worth around Rs.8,340 crore with power generation equipment makers in March.

Orders for power equipment have dried up because of a combination of slowing economic growth, high borrowing costs and delays in securing regulatory approvals. In fact, no private manufacturer received any orders for equipment in fiscal 2013.

Cash-rich NTPC now plans to place orders for boilers for the 1,600 megawatts (MW) Darlipali project to state-owned Bharat Heavy Electricals Ltd. (Bhel), while the orders for the additional 1,320 MW at 440 MW Tanda project in Uttar Pradesh will be given to the joint venture (JV) between Larsen and Toubro Ltd. (L&T) and Mitsubishi Heavy Industries Ltd. And, the steam turbine and generator order for the Tanda project is to be awarded to the JV between Alstom SA of France and Bharat Forge Ltd.

'All these orders will be placed in the current fiscal,' said a NTPC executive requesting anonymity. The company had cash reserves of Rs.16,867.70 crore as on 31 March.

These orders are part of the bulk orders floated by NTPC wherein bidders were short-listed but contracts couldn’t be awarded due to an ongoing lawsuit, land acquisition issues and the lack of coal linkages to fuel its projects. These bulk tenders were for nine units of 800MW each and for the supply of 11 boilers and 11 turbines of 660MW each. The resolution of issues has cleared the deck for NTPC to go ahead.

LIVEMINT