Encouraged by swelling order book, BHEL is scouting for vendors to outsource manufacturing of components

Bharat Heavy Electricals Ltd. (BHEL), a premier Central Public Sector Enterprises, has decided to increase the list of vendors and suppliers to meet its commitment on delivering high pressure boilers to various State-owned power corporations and private entities for their thermal power plants

Bharat Heavy Electricals Ltd. (BHEL), a premier Central Public Sector Enterprises, has decided to increase the list of vendors and suppliers to meet its commitment on delivering high pressure boilers to various State-owned power corporations and private entities for their thermal power plants.

According to sources, the total value of orders received by BHEL for boilers to erect thermal power plants and others has crossed ₹1.80 lakh crore. It has 39 boilers in its order book so far. Most of the orders were for boilers with an installed capacity of 800 MW.

The company had put in place the maximum utilisation of its installed capacity and all its resources to fulfil its order commitment to various companies within the stipulated time. There are about 6,000 permanent workers in the BHEL’s High Pressure Boiler Plant in Tiruchi, in addition to about 6,000 contract workers.

Though the BHEL has brought all of its resources to manufacture various components of the boilers, it depends upon the ancillary units to produce several components. It has taken steps to make use of its ancillary units in Tiruchi and other parts of the country. It has placed orders to its number of vendors to produce various components of boilers.

However, it is said that the number of existing ancillary industries in Tiruchi was highly insufficient to produce several key components. According to industrial sources, there were about 425 micro, small and medium enterprises (MSMEs) in Tiruchi district when BHEL was at its peak. Dwindling orders and its cascading impact severely hit the financial health of most MSMEs. Several units turned out to be non-performing assets (NPA) and they eventually became sick and shut down their operations. At present, only about 150 units are operational. Of them, 120 units are associated with BHEL. They were given huge orders for producing various components.

Reliable sources told The Hindu that steps were taken to increase the vendors list to outsource various job works so as to meet its order commitment. Fifty-two new vendors have been added to the list. It had conducted vendors’ meet in Pune, Bhilai, and others to add more vendors in the list of vendors.

The company had roped in Small Industries Development Bank of India (SIDBI) to facilitate loans to the Micro Small and Medium Enterprises (MSMEs) in Tiruchi, Coimbatore, Madurai and Chennai to produce necessary components of boilers.