The boiler industry is fraught with risks for the security and safety of assets and people and this is the driver for the company to enter this industry, Richard Sadler, Chief Executive Officer, Lloyd's Register Group, informs R Srinivasan.The CEO of the LR group, Richard Sadler, said that it is looking at acquisitions and partnership for growth in India. He said that it is looking to double its income from India in the next three years and that it will increase the number of offices in India and double its staff strength in the next five years. Excerpts of the interview:In view of bringing Chinese power infrastructure resources into Indian power stations and providing 75 per cent of the third-party assurance for this bi-lateral power trade, kindly give us details of how the group has helped ensure the success of the Sino-Indian power trade.We have been involved with close to 30,000 MW worth of projects in this sector. We work closely with power generating companies buying power plant equipment from China. Our independence and impartiality was a key element that helped the various stakeholders dispel some of their fears and scepticism in terms of quality. It helped Chinese vendors identify the specific requirements of Indian buyers. We helped buyers gain in-depth knowledge of over 300 vendors in China to help them make smart decisions with regards to procurement. We also helped Chinese vendors identify gaps in their quality system to meet Indian requirements and helped establish quality assurance plans (QAP) to ensure that quality is checked at various stages of production so that we do not discover at the end of the project that the quality does not meet requirements. This was done using a SMART methodology based on the strengths and weaknesses of each vendor.Being early in identifying the potential need for our 'independent and impartial' services in this sector and investing in understanding both the country's needs and areas of improvement we were able to ensure success in the Sino-India power trade.The company was the only private agency authorised to inspect power plant boilers. What factors ensured that your company could bag the project? How will this impact the industry and the company's profits?The Indian government had legislated that the inspection of boilers (not only power plant) be opened up to independent third-party agencies in India. Before this, there were a lot of agencies authorised to do the work outside India (including LR) but in India it was only the government which was authorised to carry out inspection of boilers both during construction and during operations. We welcomed this move from the government as safety and reliability of boilers are very critical to the operation of every industry - be it power plants, refineries or even hotels and laundries. We were also aware that the government was very keen to establish stringent norms and in that process the IBR had cancelled authorisation of some agencies which were not strictly enforcing IBR rules in other countries. With this background we applied to the government to give us this authorisation in India. We could demonstrate to the IBR our superior technical expertise which is very much needed for this buoyant industry. Our design verification services and technically competent work force enabled us to impress on our suitability for taking this responsibility.The opportunities in this sector are immeasurable. Our income and profitability due to the opening up this industry is constrained only by the amount of people we can recruit who can meet the stringent requirements of the government authorities and thus does not translate into numbers. LR being a 'not for profit' organisation as in we have no shareholders, financiers or government owning any part of LR. This ensures that we operate as a truly independent organisation. Thus profit would not be the motive for us to enter a particular industry or sector. The boiler industry is fraught with risks for the security and safety of assets and people. This being at the core of our mission is the driver for us to enter this industry.India intends to double its generation capacity in the next 10 years and to reduce the peak power shortage (around 13 per cent). How can the group be of assistance in this regard?The group is already involved in a large amount of projects in the power sector. We are extremely well positioned to ensure that equipment, whether it is sourced from outside the country or within, meets the specific requirements of the Indian power sector. The large value of these assets makes them a critical aspect of the supply chain in this sector. 1 MW of just the BTG equipment is valued close to Rs 1.5 crore and we are looking at around 150,000 MW in the next 10 years. The equipment also, from an engineering technology aspect, adopts cutting-edge super-critical technology, which is relatively new in India. This gives us this unique opportunity to contribute to this industry in multitudinal ways. Our independence and global presence combined with our track record in this sector allows us to be in the position to provide services to ensure that the qualities of these assets meet the critical and unique requirements of the Indian power sector. With the recent authorisation for inspection of boilers in India by the IBR, we will be able to offer 'seamless' solutions to foreign suppliers of boiler manufacturers.Our global experience in this sector, combined with our group companies like Scandpower and ODS provides us with the opportunity to provide engineering-based solutions during the operational phase of this new-generation power plants. Our services can be used to establish critical asset management efficiency in lines with the British Standards Institute (BSI) established publicly available specification (PAS55) specifications or in enhancing the reliability and efficiency of plants using risk-based analysis and solutions. The opportunities are quite large and we are currently working closely with many large power generating companies both public sector and privately owned to provide 'through-life' services to this sector.Can India's power supply chain ensure the safe and reliable operation of super-critical facilities since the current power infrastructure is aging? Also industry experts acknowledge that the mechanical integrity of existing power systems is the biggest single issue facing the industry. Kindly comment.The 'mechanical integrity' of aging assets is a huge issue facing this industry. Combined with this is the new technology that is being adopted for new power plants that are being set up. This provides an operational challenge for most power generating companies. In the recent past we sponsored a project with the British Standards Institute to establish a specification for demonstrating efficient asset management which is now called the PAS55 (PAS or publicly available specification). This looks at large assets from a risk perspective and establishing operating procedures using the risk of failure aspect rather than previous prescriptive aspects. This has been adopted by many countries now and helped power and utility sector ensure reliability of their assets more efficiently.With respect to the supply-chain of super-critical facilities we, collectively, need to ensure that it is safe and reliable. This is perhaps one of the most critical aspects of the sector now. This needs to be addressed collectively as this will affect the growth aspirations of not only this sector but the ambitious growth targets of India, as such. LR can definitely play a large role in this.About Lloyd's RegisterThe group is associated with the shipping and shipbuilding, oil and gas,
refineries, manufacturing and power sectors. Currently, it is involved
in several power projects in India with an incredible 30 GW worth of
projects in India. LR's Quality Assurance is one of the world's largest
international certification bodies. The group has also been fundamental
in helping ensure the success of the Sino-Indian power trade and has
also provided 75 per cent of the third-party assurance for this
bi-lateral power trade. It is the number one provider of compliance
services to private power generating companies in India. In the
government sector, it is the only private agency authorised to inspect
power plant boilers and is also playing a crucial role in India
developing the nuclear sector, in terms of inspection and risk analysis.
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