L&T-Mitsubishi in power JV

New Delhi, Aug 30 | Updated: Aug 31 2006, 05:30am hrs
Japanese equipment major Mitsubishi Heavy Industries (MHI) is joining hands with domestic engineering and construction conglomerate Larsen & Toubro Limited (L&T) to set up a manufacturing facility for super-critical boilers in India. The two may also collaborate to make steam turbines.

While investment details have not been disclosed, a greenfield capacity to manufacture boilers, turbines and auxiliary units will cost anywhere close to Rs 15,000 to Rs 20,000 crore. When contacted, L&T CEO and managing director AM Naik confirmed discussions were on with MHI. The proposal is yet to be approved by the L&T board, he said.

Super-critical boilers are highly efficient boilers and are economical when used in power plants with a single-unit size of at least 800 mw. At present, BHEL is the only other domestic company capable of making super-critical boilers, after a similar technology-transfer deal with French equipment major Alstom.

The market for such boilers is expected to take off in power-deficit India, which recently invited global tenders for setting up seven ultra-mega power projects, each with a capacity of about 4,000 mw. NTPC, too, plans to set up a 6,400-mw capacity, using the super-critical technology.

Power pact

Super-critical boilers are technology-efficient and economical
BHEL is the only domestic company capable of making such boilers
The proposal is yet to be approved by the L&T board
MHI and L&T ready to give corporate guarantee for technology transfer

Recent communications from both MHI and L&T to the government reveal that MHI has agreed to transfer the design and engineering technology for super-critical boilers to L&T, which already has a boiler designing centre at Fariabad in Haryana. This unit will start functioning once the technical collaboration agreement with MHI is in place.

Both MHI and L&T have told the government that they are ready to give a corporate guarantee for technology transfer in step with a technical collaboration agreement, which is now under active discussion. When asked if Mitsubishi will acquire a stake in the venture, AK Chatwani, senior vice- president, L&T, said, We are in a dialogue with Mitsubishi.

In the joint-letter, Mitsubishi said, the basis of its collaboration with L&T was to facilitate phased manufacturing of boilers.

MHI has assessed the L&T factory. Over a period of time, L&T will have the capability to design, manufacture and supply whole boilers on its own, the letter said.