Introduction

At the time of India's independence, there was hardly any industrial infrastructure worth the name except perhaps the Railways and the Post & Telegraph. The installed power generating capacity of the country was a meager 1300 MW with a per capita electric consumption of 14 kWh. Our policy planners realized that without an adequate base to manufacture equipment required for generation, transmission and distribution of power, the desired levels of industrialisation and economic development could not be achieved for the growth of the country. Accordingly, it was decided to establish an indigenous base for the manufacture of sophisticated power plant equipment and thus began the process which led to the emergence of Bharat Heavy Electricals Limited (BHEL) in India.

BHEL was set up in the late 1950's with the goal of making India self-reliant in the field of indigenous manufacture of power generation , equipment. Today, BHEL is the largest engineering enterprise of its kind in India with an excellent track record  of performance. 

With 180 products under 30 major product groups, today BHEL caters to core sectors of the Indian economy, VIZ. Power, Industry, Transportation, Transmission, Telecommunication, Non-conventional Energy Sources, etc. 

BHEL's inherent potential coupled with its consistently excellent performance has resulted in it being chosen as a 'Navratna' PSE. Today, the company has a committed workforce of around 54,000 employees spread at 14 manufacturing divisions, 8 service centres and 4 power sector regional centres, besides project sites spread allover India and abroad. BHEL also has a Corporate R&D centre It Hyderabad and product based  R&D centres at all its manufacturing units.

During the year 1998-99, BHEL achieved a record turnover of Rs. 6794.6 Crore as against Rs. 6471 crore in the previous year. Similarly, the Profit Before Tax (PBT) stood at Rs. 932.3 crore, thereby maintaining its track record of making profits uninterruptedly for the last 27 years. 

The power sector is the core business of the company and comprises thermal, nuclear, gas and hydro businesses. In less than three decades, BHEL has taken India from a position of total dependence on overseas sources to complete self-reliance in power plant equipment, design and manufacture. Today, BHEL sets account for 65% of the installed capacity of around 91000 MW in the country. 

Since the first BHEL made thermal and hydel power generating equipments were commissioned in 1969-70, over 650 numbers thermal, hydro, gas and nuclear have been contracted on the company. These very sets form the backbone of the Indian power generating system. 

BHEL has introduced Gas Turbine based sets along with cogeneration and combined cycle systems keeping in view the need for more efficient, environment friendly and short gestation projects. As on date, over 100 Gas Turbines have been contracted on BHEL from India and abroad. 

Joint Ventures 

As part of its strategy to tap business in new emerging business segments, BHEL has set up 2 separate Joint Venture Companies (JVCs) in India, on a 50-50 equal partnership basis with world renowned corporations, Siemens AG, Germany, for plant performance improvement of old fossil fuel power plants and General Electric (GE), USA, for repair and servicing of old GE design heavy duty gas turbines: Both the JVCs have commenced commercial operation.

Besides catering to the Indian market, the JVCs will have access to many export markets. Having the synergy of know-how and expertise of both the partner companies in their respective areas, the JVCs will, by virtue of their association with world's leading corporations, have access to much needed finances. Both these JV companies are essentially engineering and marketing companies and will source their requirements of hardware and services from the JV partners, thus providing additional business. The JVCs, with the support of BHEL and respective JV partners have the necessary competitive edge to face global competition in these newly emerging business areas. 

International Competitiveness 

One of the strong points of BHEL has been its international competitiveness, which the company has successfully proved by bagging over 86 % of power plant orders under international Competitive Bidding (ICB) in the domestic market, since 1978. In fact, the presence of BHEL in the Indian power plant market has compelled the competitors (MNCs) to quote attractive prices for power equipment. As such if BHEL wins in these bids, it gains an order and adds value in the country and in every case where BHEL competes, the country derives the benefit of lower project costs. 

During the last three years, the company's major successes in securing orders for power plant equipment, including those bagged' under International Competitive Bidding (ICB) are as follows: . 
 

• Talcher STPS.(4x500 MW); Order for Boilers and Steam Turbine Generator sets. 
• OECF funded power projects, Simhadri TPS (2x500 MW); Faridabad CCPP (430 MW); Ghatghar HEP (2x125 MW) & Bakreswar TPS (3x210 MW). 
• World Bank funded Kayamkulam CCPP (350 MW). 
• Raichur TPS (2x210 MW) which is the first IPP of its kind in the Country, being jointly funded by nationalised banks, financial institutions, PFC, BHEL & KPCL, with indigenous equipment & expertise. 
• India's highest head (1027 meters) Pykara HEP (3x90 MW) in Tamil Nadu and Khaperkheda TPS Stage II (2x210 MW) funded by MSEB and PFC.
• TNEB's Kovilkalappal CCPP (108 MW) in Tamil Nadu, to be equipped with India's first Advanced Class Gas Turbine of 70 MW ISO rating.
• RSEB's Suratgarh TPS Stage II (2x250 MW). 
• Tala Hydroelectric Project Authority's order for largest capacity (1020 MW) power project of Bhutan; Largest Hydro order ever on BHEL.
• Bhilwara Group's Malana Hydro Electric Project (2x43MW).
• NEEPCO's Kopili (Stage II) Hydro Electric Project (lx25 MW).

This performance has been achieved despite operating in a highly competitive and subdued business environment, wherein industrial growth has been declining, plant & machinery sector showing negative growth and infrastructure projects getting delayed/deferred resulting in overall demand contraction.

In fact, in some of the major product areas in the power sector, BHEL has developed unique strengths that enable it to compete successfully in the market. The company is however, making all efforts to continue to be technologically contemporary even in future, and this may call for adopting different relationships with technology partners. While BHEL is internationally competitive, it is also adopting suitable measures like benchmarking against world leaders to enable it to deal with them. 

With project financing becoming a crucial aspect for furtherance of business in the power sector, BHEL has been pursuing with major financial institutions. As a result, Industrial Credit & Investment Corporation of India (ICICI) have placed at the disposal of BHEL, a line of credit to enable the company to offer sales-aid-finance for its equipment supplies to independent and captive power projects. Besides, BHEL has been giving suppliers credit/arranging finances as a measure of sales-aid-financing. BHEL has so far given supplier's credit offered financing packages to projects including Kothagudem TPS (2 X 250 MW), Vijaywada TPS (2 X 210 MW) and Raichur TPS (2X210MW). 

Customer Focus

BHEL has constantly been having thrust on efficient and quick customer service. The company has a wide spread regional service network to provide prompt and efficient service to customers. 

BHEL amply demonstrated its customer focus by rising to the emergency call of APSEB and took up on war footing, the rehabilitation and re-commissioning work of all the seven units of 110 MW each at Srisailam HEP, accomplished in just 65 days. The power house was completely submerged in the worst ever floods in Andhra Pradesh. This was a record of sorts for this type of work anywhere in the world. 

Tenom Pangi HEP (3x22 MW) in Malaysia, which was badly damaged due to floods, was completely overhauled & re-commissioned in record time and was appreciated by Malaysian authorities. These sets were supplied by BHEL 15 years ago.

Another case is the repair & restoration of a 500 MW Boiler, supplied by Ansaldo, Italy to NTPC at its Farakka TPS. As desired by the customer, this boiler was twice repaired by BHEL on priority basis, upto the satisfaction of the customer. 

BHEL has been constantly striving to compress the time cycle for commissioning of power plants for the benefit of customers. In this direction, the commissioning of Raichur-5, 210 MW of KPCL in 28 months was a record in Indian power plant history. It is christened as 'Indian Success Story' where an Indian Utility (KPCL), Indian Financial Institutions and BHEL joined hands, arranged funding, achieved financial closure and commissioned the set ahead of schedule. The Power Plant is already generating power, resulting in substantial saving for the customer, both in terms of capital cost & additional revenue.

Similarly, BHEL has achieved yet another milestone in the execution of Bakreswar Thermal Power Project in West Bengal, with the commissioning of 210 MW-Unit I - 42 days ahead of schedule. The second and third 210 MW units at the OECF - funded Bakreswar TPS are also slated for commissioning ahead of schedule. Earlier, the 210 MW Unit-I boiler was lighted up by BHEL on 21st April 1999, within 144 days from start of civil foundations as against a schedule of 195 days.

Transmission

For evacuation of power, BHEL designs and carries out R&D on a wide range of transmission products and systems including high voltage power and distribution transformers, instrument transformers, dry type transformers, SF6 switchgear, insulators, shunt reactors, capacitors etc. For the first time in India, BHEL has developed 400 kV spark gaps for series compensation schemes and these have undergone successful testing at KEMA, Netherlands, making India one of the few countries in the world having this technology. A 145 kV Gas Insulated Switchgear (GIS) which has been successfully tested at CESI, Italy will be introduced in the market shortly. 

Special Ceramic Disc Insulators, indigenously developed for the first time in India by BHEL for 500 kV HVDC transmission systems, have passed all tests at CESI, Italy. The development has placed India among a select group of only three countries in the world possessing this state-of-the-art technology. 

The company has so far supplied over 2,00,000 MVA transformer capacity & sustained equipment operating in transmission and distribution (T &D) networks upto 400 KV - AC & DC. High Voltage Direct Current (HVDC) technology has been pioneered in India through BHEL, for efficient and reliable transmission of bulk power over long distances. India's first commercial HVDC link between Rihand in AP and Dadri in UP, has been successfully commissioned by BHEL.

NCES 

BHEL, a pioneer in the development of non-conventional energy sources (NCES)in the country has emerged as the market leader in renewable energy products like Solar Water Heating Systems (SWHS), Solar Photovoltaic Power Systems & Wind Electric Generators, Battery Powered Road Vehicles, etc.

Over the years, BHEL, in coordination with the Ministry of Non-Conventional Energy Sources, has widened its product range and expertise in the field of NCES. Through extensive R&D efforts, BHEL has developed technologies which are used to manufacture products like solar photovoltaic systems, solar lanterns and battery powered road vehicles, etc. 

BHEL has so far supplied solar modules & systems for generating around 7 MW of power for applications in office and home lighting, stand-alone street lights, traffic signals, grid interactive power plants, rural automatic telephone exchanges, refrigeration systems, unmanned offshore oil platforms, meteorological data collection platforms etc. Besides, BHEL has so far installed SWHS capable of producing cumulatively, about 33 lakh litres per day of hot water, throughout the country, for applications in dairies, hospitals, hotels, research institutions, swimming pools, etc. besides domestic consumers.

Industry

BHEL is a major contributor of equipment and systems to industries like cement, fertilisers, refineries, petrochemicals, steel, paper and telecommunications. In addition, the non-power sector also includes supplies made to transportation & defence. The range of equipment supplied includes Captive Power Plants Compressors, High-Speed Industrial Drive Turbines, AC and Act DC Locos, Diesel Electric Shunting Locos, Heat Exchangers, etc. This sector today accounts for half of the company's turnover. 

Today, over 72% of Indian Railways, one of the largest railway networks in the world, is equipped with traction equipment built by BHEL.

The company has also supplied over 55,000 traction machines to the Indian Railways. With the introduction of 3 phase AC technology by Indian Railways, BHEL has made an entry in this area, by securing an order for 64 sets of EMU electrics from Western Railways as well as electric and electronic sub systems for 6000 HP WAG9 three-phase locomotives from Chittaranjan Locomotive Works.

The company is the market leader in products like Centrifugal compressors, Motors, Dry Type Transformers, Gas turbine based co-generation plants as well as steam turbines and boilers for industries. 

Recent successes of BHEL in the non-power business segment include an agreement with Oswal Chemicals & Fertilisers Limited (OCFL) for meeting all High Voltage AC motor requirements for their upcoming fertiliser project at Paradeep (Orissa); turnkey order for Konark Metcoke Ltd's 55 MW gas based Captive Power Plant with India's first coke oven gas fired turbine; order for 12 nos. AC/DC locos from Indian Railways; order for a 200 tph pulverised fuel-fired steam generator from National Aluminium Company Ltd. (NALCO) and seven orders for Steam turbo generator (STG) sets for Cogeneration plants from the Sugar Industry.

Global Presence 

BHEL has carved a niche for itself in the global market, having supplied products, services and projects to over 50 countries ranging from the United States in the West to New Zealand in the Far-East. The cumulative capacity of power generating equipment supplied by BHEL outside India, is over 3300 MW. The company's overseas presence includes several projects, a notable few being 150 MW (ISO) Gas Turbines to Germany; Utility Boilers, Open Cycle Gas Turbine Power Plant to Malaysia; turnkey Power Station for Tripoli West Power Station in Libya and Hydro Power Plant to Thailand. Recent contracts executed by BHEL include Gas based power projects in Saudi Arabia and Oman, Boiler in Egypt and several Transformers in Malaysia.

The company achieved several successes on the export front during FY 1998-99 including maiden entry in Syria with order for X-mas Tree & Well head equipment and in Kuwait with valves; first ever order for state-of-the-art Outdoor Vacuum Circuit Breakers from Oman; first ever engineering services contract from South Africa for Engineering of test facilities of Coal Gasification Fluidised Bed Combustion; repeat orders for Transformers from Greece and Jordan and orders for Castings from Germany and Motors from USA. The export turnover (including deemed) went up from a meagre Rs. 276 crore in 1989-90 to Rs. 2061 crore in 1998-99.

Recently, in the current financial year, BHEL has achieved yet another milestone in the overseas market with the first order for a Frame 9 Gas Turbine based power plant of 124 MW ISO rating. The order valued at Rs. 106 Crore is specially significant as it not only firmly establishes BHEL in Oman but also marks the entry of BHEL in the setting up of large size gas turbine based power, plants abroad, so far the forte of a few companies from the developed world. The order placed on BHEL by the Ministry of Electricity & Water (MEW), Government of Oman, envisages the setting up of a Frame 9 gas turbine based power plant on turnkey basis at Rusail, about 40 kms. from Muscat in Oman. 

This is the fourth successive order secured by BHEL from Oman. It comes close on the heels of an order received last year from Petroleum Development Organisation, Oman for a 90 MW turnkey power plant. Having already set up power plants for a Utility like Ministry of Electricity & Water, a power plant for captive power needs for Oman Cement Company and an order for a similar power plant from an Oil Company, BHEL'S versatility to meet varying needs of different sectors like Power, Industry, Oil etc., as also BHEL's benchmark of quality conforming to global standards stands established.

During the current year, a foray has also been made in the Central Asian Region, with an order for a 78 MVA hydro generator for a European Bank for Reconstruction & Development (EBRD) funded project, from Azerbaijan. 

Spurred by the successes achieved on the export front, BHEL has drawn up a multi-pronged action plan to ensure sustained growth in overseas markets. 

In the last few years, BHEL' S sustained efforts in many target markets in the Middle East, Mediterranean, Africa and South-East Asia have provided it witll a wider global presence. As a result, the company's export turnover (including deemed) has increased from a meagre Rs. 276 Crore in 1989-90 to Rs. 2061 Crore in 1998-99. 

Quality 

One of the important aspects of competitiveness is 'Quality' and the quality standards of BHEL equipment have been recognised in India & abroad. All major manufacturing divisions and service centres of BHEL have been accredited with ISO 9000 certification by the world renowned BVQI of London. In addition, the company is adopting Total Quality Management (TQM) to keep abreast of world standards in order to benchmark and prepare the company's products and internal processes to global standards. 

Technology and R&D

Technology is a major element in the corporate strategy of BHEL, as most of its products and services are highly technology intensive in nature. As a part of this, the company in the past has been updating technology from time to time with collaborative tie-ups with world leaders.

The company's own R&D efforts have been concentrated on the areas of optimum utilization of existing energy systems by coal, hydro, non-conventional energy systems, energy conservation, life assessment and extension of existing power plants, development of clean coal technologies such as Integrated Gasification Combined Cycle (IGCC) power plant, Pressurized Fluidised Bed Combustion (PFBC) systems, more efficient transportation systems etc. The total R&D expenditure of BHEL in 1998-99 was Rs. 60 crore, which is the highest in any comparable industry in India. 

As a contribution to national pollution control efforts, BHEL has been continuously alive to the responsibilities of protection & conservation of the environment and the ecological balance. Electrostatic Precipitators, designed & supplied by the company, have been working at an efficiency of 99.95%, thereby effectively controlling air pollution emissions form thermal power plants and industries like cement. BHEL has also developed CFBC boilers which have higher efficiency & ability to fire low grade fuels with reduced emissions, besides equipment/systems for DHDS, fly ash utilisation and desalination, etc.

Coping With Future Challenges 

India embarked on a programme of liberalisation since 1991, which has resulted in relaxation of controls & procedures resulting in the opening-up of the Indian economy and more competition, in the public as well as the private sectors. 

In this scenario, the fortunes of any business enterprise would solely depend upon its ability to meet market needs in respect of price, delivery, quality, after-sales-service etc. with speed and efficiency, irrespective of their being public or private sector enterprises.

While BHEL is internationally competitive, it is also adopting suitable measures aimed at reducing cycle times, improving its business processes, benchmarking against world leaders to enable it to deal with the current business realities. 

For any enterprise having global aspirations, it is essential that it becomes a strong domestic player first and BHEL has already demonstrated this abilitY quite creditably. However, in terms of the ability to become an equally strong player in the international market requires that on one hand the company should further build on its international image and at the same time be supported by suitable country specific and industry specific strategies by the Government.

On its way to becoming a truly Indian transnational, the company always strives to create an ever increasing value for users of its products and services. It is the company's constant endeavour 'to transform into one of the most competitive enterprises of its kind in this part of the world to international quality standards.