Consultancy business in the power sector is booming as states move away from the traditional memorandum of understanding (MoU) route to mandatory competitive bidding for the procurement of electricity in line with the guidelines introduced by the ministry as part of policy reforms in recent years. This has encouraged companies like Power Finance Corporation (PFC) and PTC India to raise their presence in the power consultancy in a big way. Meanwhile, companies like Engineers India Ltd (EIL) are also planning to enter the business.
For example, PFC has seen exponential growth in its revenues in recent years. The company had revenue of just Rs 1 crore in 2005-06, which rose to Rs 7.3 crore in 2006-07 and Rs 15 crore in the fiscal 2007-08. The company has projected revenues of Rs 40 crore in the current fiscal.
PFC hived off its consultancy business in 2008 given its growth potential. Now, the company undertakes consultancy business through its subsidiary, PFC Consulting.
?We expect our revenues to cross Rs 40 crore in 2009-10,? says ND Tyagi, chief executive officer, PFC Consulting.
India is facing huge power shortfalls. It will have to accelerate capacity addition if it is to maintain its economic growth in coming years. That means more business opportunities for value-added power sector consultants. PFC Consulting has assignments in hands for providing consultancy services to power projects worth 10,000 mw coming up in states like Punjab, Rajasthan and Jharkhand through tariff-based bidding route. PFC will supervise bidding for these projects.
The company has successfully handled assignment for supervising bidding for allocation of 1,980 mw Talwani Sabo and 1,320 mw Rajpura project in Punjab. PFC Consulting is also handling similar assignments for power transmission projects being taken up through competitive bidding route.
The company supervised bidding for allocation of the East-North-East Interconnection Ltd and expects to complete work for handing over of two more projects in the coming fiscal.
The company also expects to earn about Rs 150 crore from three ultra mega power projects (UMPPs) in 2010-11which are lined up for bidding.
PTC India, which started out as a power trading company, diversified into consultancy business three years ago. The company is providing consultancy to power project developers. It is handling assignment ranging from preparation of feasibility and detailed project reports to resource mobilisation.
?Our consultancy business is picking up. We are getting more and more assignments every year,? PTC chairman Tantra Naryan Thakur told FE. PTC?s income from consultancy business rose from Rs 30 lakh in 2005-06 to Rs 40 crore in 2008-09.
Meanwhile, public sector engineering consultancy firm EIL is also planning to enter the power sector consultancy business. To start with, the company wants to handle consultancy projects for gas-based power projects and then diversify into consultancy for coal-based projects.
?We will be looking for consultancy opportunities for gas-based power projects,? says EIL chairman AK Purwaha. Besides, the company is also keen on getting into consultancy business for balance of plant packages for nuclear power plants.