KVB Reddy
"Essar Power with a track record of 14 years of experience in power generation is all set to expand its current generation capacity from 2,800 MW to 4,510 MW by the end of current fiscal and to 6,700MW by 2014. We are focussed on bringing these assets to production to generate return for our stakeholders. Essar Energy is continually seeking to benchmark itself against best practices, to embrace change," says Mr. KVB Reddy, COO, Essar Power Ltd., in an interview with Maria R.

As a part of diversified business corporation-Essar Global, how would you like to describe the evolution of Essar Power Ltd-India's second largest power Generation Company in the private sector, its milestone achievements and combined capacity installed so far?
Essar Power is one of India's leading private power producers with a 14-year operating track record. The company's power business currently has five operational power plants in India with a total installed generation capacity of 2,715MW.

Hazira Power Plant

This capacity is increasing to 4,500MW by end of 2012 and to 6,700 MW by 2014. Essar Power also has access to approximately 500 mt of coal resources across seven coal blocks in India and overseas.

Our commissioned projects are:
Project Location Capacity
Hazira Gujarat 515MW
Vadinar Gujarat 120MW
Bhander Gujarat 500 MW
Algoma Canada 85MW
Vadinar P1 Gujarat 380MW
Salaya 1 Gujarat 1,200MW
Essar Power is currently working on seven power projects i.e total capacity under construction is 9,870 MW. What is the status of the ongoing power projects and by when they would be commercially operational?
Essar is on track to commission 6700 mw of power by 2014.

The status of the ongoing projects is as below:
Project Location status
Mahan 1, 1200MW Madhya Pradesh To be commissioned in 2012
Vadinar P2, 510 MW Gujarat To be commissioned in 2012
Hazira 2, 270 MW Gujarat By march 2014
Paradip, 120 MW Orissa By march 2014
Tori I – 1200MW
Tori II – 600MW
Jharkhand 2014
To bail out India's crisis-hit power sector, finance minister in the budget proposed scrapping the import duties on coal and liquefied natural gas, increasing the limit on overseas borrowing and reducing withholding tax on foreign investments. What is your take on this?
Scrapping import duties on coal would help meet the growing demand for the fuel in a country where 70% of electricity is generated from it. The withdrawal of import duty on natural gas, used as fuel in power plants, will offset sharp spikes in the price of imported natural gas and help in setting up gas-based capacity in the country. The effective and investment-friendly policy roadmaps designed by the government of India are increasing the liberalization of the power sector. These amendments will give a big boost to the power sector which is reeling under the effects of an ineluctable crisis.

Essar Power Plant at Hazira

Currently, what are the other problems plaguing in the power sector?
Critical obstacles in the power sector in India include fuel supply bottlenecks, distribution losses and lack of funding. Fuel availability has emerged as the biggest risk faced by thermal power projects in India. Coal production has not kept pace with power capacity addition in the current plan and developers have been forced to import coal at a time when international coal prices have shot up. Lack of clearance for mine developing has also chocked the supply of raw material.The other key issue confronting the Indian Power sector is the dismal financial health of distribution utilities. These have accumulated financial losses estimated at over Rs.70,000 crores in 2010–11 which is projected to grow to Rs.100,000 Crores by 2014.

The lack of tariff hikes and mounting Aggregate Technical and Commercial (AT&C) losses too have led to under–utilization of generation capacity.

The government has set the target to achieve 85,000 MW capacity additions with an estimated investment of $400 billion during the 12thplan. Foreseeing the current scenario, do you think this target is achievable? And if yes, then what initiative you would like the government should take to achieve this?
Currently, the concern is both on the supply and the demand side. On the supply side, poor availability of fuel (both gas and coal), transmission capacity bottlenecks, and slow pace of obtaining statutory approvals for land acquisition are key factors affecting capacity creation.

Several projects at the development stage are being deferred/kept on hold due to the above mentioned reasons.

Significant rise in the interest rates in the last 3 years has also affected fund raising. Availability of debt capital at reasonable cost is critical for any business, particularly infrastructure, as debt typically finances 75% of the project cost. The current state of capital markets is also not conductive to raising equity. Hence funding new projects has become extremely challenging.

On the demand side, absence of tariff reforms have led to high losses and financial stress for distribution companies, which are the main bulk procurers of power. Poor cash flows are affecting ability of distribution companies to off-take power, which is creating additional uncertainty for capacity creation.

While the government's target and the actual capacity addition achieved in the past year is laudable, the challenges faced by the industry will make the target achievement much more difficult. However, we remain optimistic that the government is cognizant of these issues and is taking active steps to address them.

Renewable energy is increasingly gaining importance as the most preferred source of power generation. Where do you see company's presence in this sector and plan to further strengthen its position seeing the immense potential?
Essar Energy currently is focussed on implementing the above mentioned projects. We continue to evaluate opportunities in the renewable energy space and currently have a small portfolio of capacity.

Essar Power

Essar power is known as low cost power producer; how is your company managing to generate and supply power at very competitive price?
Essar Power's power business focuses on modularization which essentially implies focusing on few vendors for all key equipment thus enabling us to get good pricing and delivery schedules, which are key to controlling capital costs in the infrastructure sector.

Also, owning the raw material is a very crucial factor to keep costs under control. Essar Energy has access to approximately 500 mt of coal resources across seven coal blocks in India and overseas. Our mines are located in Indonesia, India, and Mozambique.

Essar Power has acquired 100% stake in Navabharat Power Pvt Ltd; what made the company to go for the acquisition and how this move will help the company to consolidate its position in the market?
Navabharat power is a pit head coal based project with a share of the Rampia coal mine allocated to it. Pit head coal is the cheapest source of producing power and is consistent with Essar's strategy of being a low cost power producer. While our power strategy is mainly organic, Navabharat was an attractive opportunity for acquisition which we went ahead with.

The project's development is presently linked to achievement of certain crucial project milestones – mainly land acquisition which has been moving slower than anticipated.

What is company's target for the next 3-4 years in terms of capacity addition and expansion including Essar continues focus on establishing its footprints in the overseas market?
Essar Power is on track to expand its current generation capacity of 2,800 MW to 4,510 MW by end of current fiscal and to 6,700MW by 2014. We are focussed on bringing these assets to production to generate return for our stakeholders. At this point in time, we are not looking for any overseas projects.

A word about Group's approach for Sustainability.
Essar is striving to be a leader in sustainable business practices, with a focus on health and safety, people, communities and environment. Essar is committed to ensuring its strategy, business and operations are built around a culture of responsible behavior by all its employees. Building and operating large-scale power, oil and gas assets represents a challenge. However, Essar's aim is to ensure that as far as possible the impact on people, on the communities in which it operates, and on the environment is positive, and that any risks and consequences from its operations are minimized. Essar Energy is continually seeking to benchmark itself against best practices, to embrace change.
Moteurs Baudouin
We are fully geared up with the technological advancements required to meet the CPCB IV+norms with our flexible and dependable power solutions. Gurunath Kulkarni. For over 100 years, Baudouin has been designing the highest quality diesel and gas engines for

Read more ...

Builders Association of India: Bridging the Gaps
Nimesh Patel, President, BAI & Managing Director, Maruti Infrastructure Limited, discusses the challenges and issues faced by the construction and real estate industries of India; why BAI is propagating a Unified Standard Contract Document, and how the

Read more ...

Volvo CE India: Designing Machines to Give Power & Precision
Volvo machines are 10-15% more fuel efficient, they comply with CEV IV emission norms, and can run on alternative eco-friendly fuels such as biodiesel. We lay strong emphasis on operator training for efficient use of every machine that we sell, avers Dimitrov

Read more ...

Tata Hitachi India: Developing Indigenous High-Tech Machines
To serve the Indian infra development sector more industriously, we will continue to undertake extensive R&D and introduce machines with high-tech features, cost-effective solutions, high performance, and fuel efficiency, avers Sandeep Singh, Managing

Read more ...

L&T: Industry Leading Initiatives & Achievements
Arvind K Garg, Senior Vice President and Head, L&T Construction & Mining Machinery, enumerates the technologies and products introduced by Komatsu and L&T, the company’s extensive customer service programs, and proactive skill development initiatives which

Read more ...

ACE: Electrifying the Industry
Sorab Agarwal, Executive Director, informs that the company is set to become India’s first ‘swadeshi’ manufacturer of electric construction equipment with the launch of a fully electric mobile crane, whose technology has been developed indigenously at their

Read more ...

Terex: Strengthening Foothold Across India
Jaideep Shekhar, Managing Director, Asia & EMEAR, informs that the company will continue to strengthen its foothold in the Indian market by bringing in new technologies, expanding its product portfolio, and entering new construction territories. Its aim is to

Read more ...

Schwing Stetter India: Formulating Plans to Adapt to Demand Trends
V.G.Sakthikumar, Managing Director, informs that since sustainability is an integral part of the company, they are pursuing collaborations and R&D to bring innovative solutions, increase usage of green energy in its facilities, and reduce carbon

Read more ...

Escorts Kubota: Prioritizing Customer Benefits
Sanjeev Bajaj, Chief Executive, Escorts Kubota Limited, is confident that 2023-24 will be a great year for the CE business and demand may be more than the current capacity, largely led by domestic consumption due to the infra push by the Government before the

Read more ...

Puzzolana Group: Increasing Operational Efficiencies
Abhijeet Pai, President, informs that the company’s wide ranging value-added services for its customers has positioned it as a total solution provider in the Crushing & Screening Industry. The focus at bauma this year will be on M-sand, aggregates, railway

Read more ...

Sany India: In Sync With Changing Trends
Dheeraj Panda, Chief Operating Officer - Sales, Marketing & Customer Support, Sany India, informs that the company has taken a significant step forward towards sustainability with its B-V biodiesel machines, and is also testing electric technologies for

Read more ...

CRCHI: Making Tunnel Construction Smarter & Safer
CRCHI is positioned in world markets as a large enterprise with a strong focus on research, design, and manufacturing of customized underground engineering and rail transit equipment, informs Song Shuang, Vice Managing Director, Overseas

Read more ...

Manitou South Asia: Widening Industrial Footprint in India
Hafeez Khan, Managing Director, informs that the company is well-equipped to meet the higher anticipated demand in FY23-24 with its versatile material handling solutions, value-based services, and strategic partnerships with rental companies. Bauma is the perfect

Read more ...

KYB Conmat India: Focus on India-Centric Equipment
Premraj Kashyap, MD, informs that the company is fully geared up to meet upcoming demand in FY23-24 and has added a lot of innovative products to their Concrete Equipment portfolio, including a new range of Self-Loading Concrete Mixers. The government intends

Read more ...

JCB India: Committed to India’s Growth Story
Sales of construction equipment, a barometer of economic activity, is expected to increase in double digits in the ongoing financial year on the back of increased government spending on infrastructure projects, especially in rural areas, observes Deepak

Read more ...

Wirtgen India: Enabling Sustainable Construction
The Wirtgen Group and John Deere are working on various smart technologies, including electric machines, and on sustainable construction through its recycling business, informs Ramesh Palagiri, Managing Director & CEO. Wirtgen’s production systems are

Read more ...

Ammann India: Forging Ahead
Anand Sundaresan, Managing Director, discusses the grey areas in the construction equipment industry of India and how the company’s technologically advanced systems and processes can help meet many of the challenges; and factors that are differentiating

Read more ...

CDE Asia: Sourcing Sand Ethically for the Construction Industry
With the advanced recycling solutions now available, it is possible to achieve a self-reliant, circular economy where different waste streams can be recycled and converted into high-quality sand and aggregates for use in construction, informs Manish

Read more ...

Etrack: Offering the most Advanced & Green mobile Crusher & Scalpers in India
Keestrack is introducing the most advanced and innovative technology for crushers and scalpers through its manufacturing facility in Neemrana, Rajasthan. Swaminathan Dhandapani, CEO, discusses the company’s strategies to drive business in India

Read more ...

LiuGong India: Committed to Make in India
Nischal Mehrotra, Vice President - Sales & Marketing, informs that the company has expanded its product offerings with large tonnage excavators, mini excavators, dozers, electric wheel loaders and trucks, and is geared up to meet the anticipated higher

Read more ...

×
Sign-up for Free Subscription
'India Construction Week'
Weekly e-Newsletter on Construction Industry
Get the latest news, product launches, projects announced / awarded, government policies, investments, and expert views.
Click here to subscribe.
×