BHEL keen to work in West Asia once situation normalises: Heavy industries minister H D Kumaraswamy

New Delhi: With conflicts in West Asia showing signs of subsiding, union heavy industries Minister H D Kumaraswamy said state-run Bharat Heavy Electricals Ltd (BHEL) is keen to work in the region once the situation is back to normal. BHEL is closely monitoring crises in the region, including the regime change in Syria and the Israel-Hamas ceasefire, the minister added.

“[The company] will be keen to address suitable opportunities in the region once the situation normalises. We are presently actively engaged with prospective customers in Iraq and Israel,” Kumaraswamy said in an exclusive email interview with Mint.

While the minister did not specify the types of opportunities BHEL would pursue, the development is important as it indicates India is ready to take up rebuilding work competitively in war-torn parts of West Asia.

Awaiting ‘strategic PSU’ designation

BHEL’s primary work includes manufacturing engineering and power-generation equipment. For its work in the power and defence sectors, as well as its international footprint, the parliamentary committee on public undertakings recommended BHEL be designated a ‘strategic PSU’ in December. Mint reported on 19 January that the union government was actively considering this proposal, taking BHEL off the disinvestment list.

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BHEL received orders worth nearly ₹78,000 crore in FY24, the highest ever in a fiscal. This was more than three times the value of orders received in FY23 ( ₹23,548 crore), and nearly seven times the FY21 figure ( ₹11,470 crore).

The power generation equipment maker claimed a 100% market share in setting up thermal power plants in its FY24 annual report, driven by the union power ministry’s push to set up an additional 80 gigawatts of coal-based power projects in the country by 2032. BHEL’s order book for boilers used in thermal power generation in power plants was full in FY24.

Global footprint

The company’s wide international presence is another reason it is keen to work towards rebuilding West Asia. “BHEL has expanded its footprints in 91 countries across all the six inhabited continents,” Kumaraswamy said in the interview.

The railway engine manufacturer has also secured as many as 62 export contracts in FY23, according to the company’s disclosures to the parliamentary committee, an increase of more than 30% from 47 export contracts the year before.

“BHEL secured 70 contracts in 2017-18, encompassing various aspects, including spares and services. However, there has been a decrease in contract acquisition, with 37 contracts in 2020-21, and a recent uptick to 62 contracts in 2022-23. The committee is happy to note that recognising its core strength as a manufacturing company, BHEL has taken efforts to focus on products as the core of its international business,” the parliamentary committee on public undertakings said in its December 2024 report.

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BHEL has exported to West Asian countries such as Iran, Iraq, Oman, Yemen, Saudi Arabia and the UAE, and has also set up various projects in the region since the 2000s.

“In the Middle East, BHEL has set up 14 power projects, besides substations and supply of a host of equipment for the power and the oil & gas sectors,” the company has said in June 2010, while announcing its completion of a 26 MW gas turbine generator at Oman Refinery and Petrochemical plant in Muscat, and a 2×42 MW gas turbine-based power project of Al Ghail Power Company in the UAE. This was BHEL’s first project in the UAE, the company said.

In May 2024, BHEL announced it had entered into a partnership with HIMA Middle East FZE, Dubai, for HIMA’s railway signalling business. “Recognising its core strength as a manufacturing company, BHEL has taken up efforts to focus on products as the core of its international business. BHEL’s products such as motors, transformers, compressors and valves have a demand in the international market and over the years, orders in this segment have grown,” the company told the parliamentary committee, according to its December 2024 report.

Dormant projects 

This would not be BHEL’s first attempt at taking up projects in West Asia following a conflict. The company’s Marib gas turbine project in Yemen is on hold due to the civil war there since March 2015. The December 2024 parliamentary committee report also suggested BHEL work closely with the ministry of external affairs to assess the feasibility of reviving projects in unstable regions.

Focusing on exports to new customers abroad could reduce BHEL’s reliance on its domestic customers, the committee said in its December 2024 report. Currently, the share of exports in BHEL’s turnover is a little over 3%, the company said in its FY24 annual report.

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