BHEL criticised by Gujarat energy minister Patel

Vol 15, PW 2 (28 Jul 11) Midstream & Downstream

Gujarat energy minister Saurabh Patel is blaming state-owned EPC contractor Bharat Heavy Electricals (BHEL) for delays at the 2100-MW gas-fired Pipavav power project promoted by GSPC Pipavav Power Company (GPPC).

PETROWATCH learns commissioning of the first 350-MW unit at Pipavav has yet again been inexplicably postponed from October 2011 to early next year. Angry Patel wrote a letter of complaint about BHEL in the first week of July to its parent, the power ministry.

“I request the power ministry to impress upon BHEL to maintain quality and ensure timely execution of projects,” writes Patel, in the letter seen by this report. “There have been significant delays to the execution of gas-fired EPC projects in Gujarat because of BHEL.

More, BHEL’s work renovating and modernising old coal-based power stations to convert them to using gas has also been highly unsatisfactory.” Patel is believed to have openly reiterated these criticisms at a July 13 power ministry conference held in Delhi.

According to Patel, neither the Pipavav project nor a 350-MW expansion to Gujarat State Electricity Generation’s (GSEG’s) 156-MW Hazira power station is anywhere near completion. Patel further accuses BHEL of “lagging behind” in the execution and implementation of an expansion to Gujarat State Electricity Corporation’s Ukai coal-fired power station in Surat.

He is even unhappy with work previously completed by BHEL. “Units 1 and 2 (each of 120-MW) at the Ukai thermal power station have not achieved the agreed electricity generation capacity,” we learn.

“They have yet to stabilise three years after BHEL completed its renovation and modernisation work.” When contacted, BHEL sources declined to comment.

Pipavav is the subject of a controversial Gujarat High Court case. Under scrutiny is why Gujarat state authorities offered Mumbai-based Swan Energy a 49% stake in January 2010 for Rs400cr ($89.8m) without an open tendering process.

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