I N D I A ’S F I R S T POWER MAGAZINE Volume 1 •No.

5 February 1997

STATE OF
THE GRID
10

12 H a ra ssin g the sun

27 Dr. Singh stirs up a debate
30 India Infrastructure Report
32 Privatising distribution
1997-02 IPP Projects Development and Risk of Attrition by

40 NTPC’
s Rajendra Singh Mr. Vishvjeet Kanwarpal CEO GIS-ACG
Global InfraSys - Asia Consulting Group
Published: February 1997 by PowerLine

49 Who is getting the fuel?

 IN T H I S ISSUE

News Briefs Forum Fuel

27States begin to shortlist

Summary o f national and
international news developm ents
Who’s getting the fuel?
5 MRole
anmofohan Singh stirs up debate
private sector:

India Infrastructure Report:

H ighlights 30

Privatising distribution:
Special Stories Should we? And how? 32 Products & Technology
State of the grid: 10 Clean coal technology 51
C ll recommendations 34
And h ow w e g o t there 11
Products and services 52

12
Harnessing solar energy:
N ew tech n ologies driving plans

Finance
Small project finance 36 Recruitment
Companies NCAER report 37
Job offerings 5 3 -5 5

Sargent & Lundy:

Setting up sh op with L & T 15

CESC:
N o m ore pow er cuts 16 People Directory of Products
NTPC’
s Rajendra Sim gh 40
and Services
ACG:
Evaluating risk 18 56
H SEB ’
s Ranjit Issar 43

S&S:
U S A ID ’
s Richard G oldm an 43
Exports driving current grow th 18
K SEB’
s V Rajagopalan 44
Price Waterhouse:
M arket leader in reform business 20 G E’
s D. Srinivas 44
Power Data
Transmission profile by state 57
A IG ’
s Ajay Lai 45
IPP projects:
D evelopm ent and risk o f attrition 58
Ashok Leyland’
s R. Seshasayee 45
Agencies SEB sales by category 59

IREDA: Power generation statistics 60

M ore international funds 22

Project Watch
Captive power:
Summary o f p rop osed projects 46

Score Beard Power transmission:

Plant availability: Projects in pipeline 48
by SEB 24

Best power plants 25

C OM P A N I E S
ACG
Over the last five years, a number o f
power projects have been announced
and many PPAs have been signed. These
projects total up to an amazing 300,000
M W o f capacity. O f course, some will never
see the light o f day, some are bogged down
in red tape and some will actually be imple­
mented. Tracking these projects and sepa­
rating the likely successes from the likely
failures is a challenging but much needed
task. One company that is attempting to do
this is Asia Consulting Group (ACG).
T h e company is tracking almost 2,000
projects. These include IPP, public sector,
R&M, captive and cogeneration projects.
A C G provides forecast and risk evaluation
services to developers, financial institutions,
EP C contractors, equipment suppliers and
policy agencies. T he analyses are based on
the project tracking database and advanced
market models that the firm claims capture
the complexity o f the evolving Indian mar­
ket. The models take into account such fac­
tors as demand, supply, tariff, fuel, transport
and transmission.
While its services include competitive bid
development, market assessment and stra­
tegic consultancy, its primary thrust is
evaluation o f risk related to power pur­
chase, fuel supply and power transmission
agreements. “ T h e primary hurdle for
power projects in India is lender confi­
dence,”says Vishvjeet Kanwarpal, head o f
the India operation.
Asia Consulting Group was founded in
1994 by Asian and American professionals.
It has a network o f 12 offices all over the
world. Each office is headed by one o f the
partners. The India office was established in
1995. In addition to its full-time staff, the
company also has on its roster a group o f
senior advisors who are mostly ex-officials.
Editor’s note: T he Power Data section in this
issue carries an analysis from ACG.
s&s
Exports driving current growth
T h e switchgear industry in
India is on the verge o f very
high growth. There are two
reasons for this. First, more
and more attention is being paid to trans­
mission and distribution. Second, India is
beginning to be recognised by the interna­
tional companies as a low-cost but effective
sourcing point. One company that has
benefitted from the latter already and will
benefit from the former in the future is S&S
Power Switchgear Company.
S&S had sales last year o f over Rs 1.3 billion.
It claims to have a market share o f almost 20
per cent - an impressive performance for a
company that was set up only 20 years ago
and has had to compete with multinational
giants like Siemens and GEC.
Its beginning was quite modest. The com ­
pany was set up as a small manufacturing
unit by N.S. Sethuraman, A.R. Santha-
krishnan and V. Srinivasan in 1975. The first
breakthroughs were the introduction o f
vacuum circuit breakers in 1981 and out­
door porcelain versions came soon thereaf­
ter. The products were well received and the
company sales continued to grow, though
modestly.
However, the company really got going af­
ter 1990 when it was taken over by the Jalan
group. T he new owners had a clear strategic
vision: focus on the product range, develop
stronger design capabilities, maintain a low-
cost base and com m it to developing the
S&S work force. This vision was backed by
substantial investments. New ideas were
encouraged and new strategies adopted.
T he result has been a 35 per cent annual
growth rate in sales. From 1991-92 to 1995-
96, the sales increased from Rs 525 million
to Rs 1,135 million.
T he increase in sales has been driven by
entry into new product areas and new mar­
POWER L I N E • February 1997
kets. Initially, the company had focused on
the medium voltage switchgear. Even today,
this division is the largest. It offers
switchgear for ratings upto 36 kV These are
particularly suited for the protection and
switching o f feeders, unloaded overhead line
cables, transformers and other frequent
switching applications.
The company also started focusing on the
high voltage market, especially switches for
outdoor substations o f utilities and large
industries for voltages up to 400 kV. In this
range, the company claims to have a domi­
nant market share. It also introduced low
voltage products like miniature circuit
breakers as well as fuses.
In 1992 S&S began to shift its focus towards
the export market. To facilitate this, a joint
venture was set up in Malaysia. Certification
o f the entire product range and adoption o f
ISO 9000 quality systems was also initiated.
An entirely new range o f switchgears was
developed for the foreign markets. This ef­
fort has evidently yielded results.
In 1995-96 the export sales contributed a
significant chunk o f the com pany’
s turnover,
Rs 166 million (versus Rs 116 million the
year before). T he projections for the next
year are even higher. S&S is hoping to in­
crease exports to Rs 400 million.
The com pany’ s principal export markets are
in Latin America and the ASEAN countries.
S&S has set up a subsidiary, S&S Power
Corporation Sdn Bhd in Malaysia. This
manufacturing facility and marketing set up
is expected to cater to the ASEAN countries.
S&S is also increasing its market presence in
the Middle East, the UK, Australia and New
Zealand.
T he growth in the next couple o f years
therefore will be driven by exports. There­
after, the growth engine is likely to be the
domestic market. ■
POWER DATA

Development and risk o f attrition

Asia Consulting Group tracks over 2,300 projects. It a ssesses the current environment as "complex and high risk".
While the IPP response to private power participation has been phenomenal, the developmental and risk factors are
likely to cause heavy attrition...

•Total capacity under development includes all power paints (private or government-owned) in any stage o f development; from planning
to implementation.
•The progress based potential analysis is driven by A CG power project development rating that addresses around 40 parameters pertaining
to the development o f each project.
•This forecast is not the final viable capacity addition as it does not account for attrition based on risk factors such as power demand, fuel
availability, finance, SEB status and forex related constraints.
•Captive and cogeneration projects under development amount to an additional 9 G W o f capacity from 210 projects.
•Installed (primary, captive, cogen, standby) and new unclassified projects account for over 880 projects.

Email: ceo.gis.acg@gmail.com
Website: www.gis-acg.com

NOTE: This analysis has been produced by ACG, not Power Line.

58 POWER L I N E • F ebruary 1997