Heavy Industries Ministry is considering to make Bharat Heavy Electricals Limited a nodal agency for the execution of all overseas power projects being financed by the Indian Government and to accord preference to it for providing spares and services for the government funded overseas power projects.
BHEL, the country's leading power equipment maker, is going through tough times, primarily due to sluggishness in the sector and cheaper overseas imports hurting its prospects.
During the quarter ended June-13, BHEL's net profit slumped nearly 50 percent to RS. 465.43 Crores. At the end of June quarter, the company's outstanding order book stood at Rs 1,08,600 Crores.
Various steps are being taken by the Heavy Industries Ministry to assist BHEL:
- Giving preference to "project-tied credits for power projects with long gestation period where the company becomes a regular foreign exchange earner in terms of providing spares and services.
- Tie-up power project orders on nomination basis with public sector manufacturers like BHEL to utilize manufacturing capacity already set up.
- Push for steps to encourage domestic equipment manufacturers. As part of this, it would "take up with the Central Electricity Authority (CEA) to issue directive that mandates indigenous manufacturing as the qualification requirement for participation in utilities' tender.
- With cheaper imports continuing to hurt the domestic industry, Heavy Industries Minister has sought additional five percent levy on overseas gear. Last year, the government had imposed a 21 percent import duty on power equipment. Then, the Cabinet had approved 5 percent basic customs duty, 12 percent countervailing duty and 4 percent special additional duty on imported power gear.
According to the Minister, local players such as BHEL and Larsen & Toubro -- which have added huge capacities -- have been adversely affected by the slowdown in the power sector.
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