Category — Coal & Clean Coal

France’s Alstom SA has recently been awarded a $115 million contract by  BHEL to supply components for three units of 660 MW supercritical boilers of Nabinagar Power Generating Co. Ltd. NPGCL is a joint venture company of NTPC Ltd. and Bihar State Electricity Board located in Nabinagar, Bihar, India.

Alstom will cooperate with BHEL in designing the boilers and will supply identified pressure parts of the supercritical boilers along with pulverisers and airpreheater components. Alstom will also assist BHEL with technical advisors during the erection and commissioning of the units.

The contract follows the supercritical boiler contract won by Alstom for Mouda last year, and is in addition to six contracts signed with BHEL between 2008 to 2012 for supercritical boilers in Barh II, Krishnapatam, Bara, Yeramaras, Bellary and Mouda in India.

“Every household in the country will have electricity by 2017″, Indian Prime Minister Manmohan Singh promised in his Independence Day speech this week. During the last five year over 100,000 villages have received electrical supply.

Singh’s statement came days after over half of India was left without any electric power twice in a row due to grid failures.

India’s per capita energy consumption is among the lowest in the world, and it is largely because many rural Indians don’t have access to electrical energy at all; in many urban areas, daily power outages are a matter of course. Most businesses and many homes have backup power via diesel generators, battery backups or both.

What this means:

Political pressure to deliver a robust energy infrastrucutre will continue to drive investment in all forms of energy production, distribution, and green consumption. This continues to be a growing opportunity area for foreign and local players of all kinds.

This week, Indian Prime Minister Dr. Manmohan Singh needed to replace the Finance Minister since Pranab Mukherjee was elected to the ceremonial post of President.  He chose to bring back Harvard MBA, P Chidambaram to run Finance. Chidambaram has run this ministry before and was also one of the key architects of the momentous liberalization of July 1991 (along with Singh, and Montek Ahluwalia).

But just as important is the new man who is going to run the Home Ministry, the post that Chidambaram vacated.  That person is Sushil Kumar Shinde, who visited Los Angeles in April in his prior role as Union Minister of Power. Here is a photo of Minister Shinde and me with my colleague Smita. The Home Minister is often viewed as the second most powerful person in India.  Home, Defense, Foreign Affairs and Finance are the top cabinet position, according to most observers.

Gunjan Bagla, SK Shinde, Smita G.

Stay tuned for more about India’s Home Ministry. For more about the April event, read my last post about it, here.

On Friday, April 13,  I had the honor of hosting the  Honorable Union Minister of Power from India, Mr. Sushilkumar Shinde. We organized a private lunch with the US India Business Council and met for lunch at  the Los Angeles Chamber of Commerce.

India's Union Power Minister SK Shinde (right) and Gunjan Bagla

Shinde’s ministry is responsible for all power generation and distribution in India, other than nuclear or non-conventional power.  Attendees include many investors, entrepreneurs, corporate executives, large firm attorneys, investment bankers and government officials with an interest in upgrading India’s electric power infrastructure. Minister Shinde is a native of the western state of Maharashtra where he started his career in police and the courts. He’s been Chief Minister of that state (which is like an American Governor). He has also held power posts in his political party including managing the election campaign of Congress President Sonia Gandhi, back in 1999. Shinde has been a member of India’s lower house of parliament, the Lok Sabha and also its upper house, the Rajya Sabha.

Corporate executives in the room were impressed with his knowledge of technical and business issues relating to Power. He was accompanied by senior bureaucrats and by the Chairman of India’s Power Grid Corporation who provided additional insight as needed. This was minister Shinde’s second trip to Los Angeles since becoming Power Minister.

Power Minister SushilKumar Shinde (in Olive Suit), with Gunjan and lunch guests

What this means:

American companies who wish to participate in India massive expansion of electrical power infrastructure can be assured of opportunities in power generation, grid management, software, equipment, perhaps even in turnkey distribution can be assured of a serious dialog when they visit India.

Tad’s Corner (formerly Alpha Coal) and Kevin’s Corner, are located adjacent to each other in the Galilee basin in Queensland, Australia  with combined thermal coal reserves of an estimated 7.6 billion tons.  Both are part of  Hancock Coal, owned by Gina Rinehart, Australia’s richest person, which started prospecting in the region in the 1970s. Rinehart calls the reserves which have low sulphur and ash content, the “jewel in the crown” of the Galilee Basin.

India’s GVK Group, the Hyderabad-headquartered infrastructure major owned and chaired by G.V.Krishna Reddy  is among the top bidders for the assets which could sell for $1-1.5 billion. The other top bidder is also an Indian company, JSW Steel, a company run by Sajjan Jindal whose mother Savitri Jindal chairs the O.P.Jindal Group and is India’s fifth richest person with a $13.2 billion fortune.

According to Forbes magazine, GVK has been scouting for Australian coal assets for a while. Last year, it was one of the bidders for Australia’s ailing miner Griffin Coal, but lost out to Indian rival Lanco Infratech, controlled by L.Madhusudan Rao.

What this means:

Corporate India, will continue its hunt for resources and assets across Australia, Africa, Latin America, Russia and even the developed economies, being assured of domestic profits and contracts. As in my previous post, public sectors companies such as Coal India Limited and ONGC will also participate in their own way. Along the way these entities will continue to bump against Chinese competitors with similar intentions.