Prayasvin Patel, CMD, Elecon Group, is upbeat about the revival of the power sector, but, in the present situation where orders are confined to only a few companies, keeping all eggs in one basket, at the end of the day, increases risk factors for EPC sector.
Give us an understanding of the challenges that are likely to hamper the EPC sector? What ultimately, is the key success of an EPC contract?
The major concerns of the power industry are coal supplies, land acquisition, environmental clearance and project delay costs. Solutions are being dealt with or found by the government; however, some of the ways forward can be as follows:
a) CIL along with certain private miners should modernise and update their operational effectiveness. They should also move more towards professionalism in order to exceed in their Y-o-Y production.
b) Land acquisition can be done by assuring return land or other benefits to the concerned, besides prior analysis of the land by authorities before finalisation to reduce the time consumed.
c)Environment concerns over thermal power projects are slowly growing. To mitigate this risk, measures can be taken to wash coal through washeries before supply to projects, besides having other impurities´ removal strategies.
Can you tell us about the kind of employment opportunities in various key disciplines of EPC?
EPC holds a vast area and as the sector is hoping for a revival in the next 3-4 years. Job opportunities would be there across all discip¡lines, however, major requirements may fall in core areas like design, procurement, construction and project management, etc.
Will we see increased headcounts in various types of disciplines, especially for skilled workforce?
Considering the possibilities of revival of the power sector, there will be about 15 per cent rise in manpower requirement. However, this will be dependent on the tune of any individual organisation´s strength and sales growth.
Can you outline the estimated requirement for one-time jobs and permanent jobs in Elecon as well as the entire industry?
A typical composition of the engineering industry consists of 20-30 per cent commercial and 70 per cent technical employees. With a growth in the sector, we see a rise in project based hiring of technical staff, wherein the commercial employees can be used as shared resources.
This means, that there will be a rise in one-time as well as permanent jobs, subjective to the requirement.
How does Elecon outline its requirement for unskilled, skilled and semi-skilled workforce during recruitment?
In EPC, your requirement for the workforce depends largely upon the number of contracts and time commitment of the projects under execution. Our sites give us an understanding of the manpower requirements to honour our commitments.
That being said, I am also referring to the need of support staff required for smooth operations.
Can you throw some light on the job creation exercise done by your company during the last two years on Y-o-Y basis?
With sustained growth there arises a need in every organisation for more manpower and we are no different. To keep ourselves ready for this, we have in place good HR policies and practices. We have high regard for competence and also believe in training as a part of continuous improvement. We maintain this by keeping a well defined organisational structure in place.
Orders bagged by EPC companies suggest that by providing electrical equipment, the project proponent is looking for a turn-key contractor. Is this a new trend in the offing? How useful is it for quicker execution?
Though useful to the employers or order providers, this trend has reduced preferences or competition drastically, as in India there are very few EPC contractors limited to L&T, BHEL, DOOSAN etc. In addition, BHEL as a government organisation, gets preference over others.
BHEL floats fresh request for qualification (RFQs) for each and every area and dictate things as per their preferences even if it is not favourable. Keeping all eggs in one basket, at the end of the day, increases the risk factor as the EPC contractor also sublets things.
Let me ask you a frank question. Do we see any new orders, especially in power sector?
The power sector has been facing a slowdown for a long time and nobody can expect things to change overnight. However, steps being taken by the present government in order to bring in professionalism and betterment, may show results soon.
What is the current order pipeline looking like? What is your total order book as on date?
The order booking in power sector since last 2-3 years is stable. Several projects, including ours, have been delayed or cancelled or re-tendered or are on hold. However, looking five years ahead, we see a definite increase.
Which are the benchmark projects developed by Elecon in India and internationally?
Elecon EPC has been growing in a stable manner for a long time and this is reflected in our financial statements.
Major area of operation is in bulk material handling, plant setup and equipment supplies. We provide equipment as well as part supply, erection and supervision services. We also provide post supply/post commissioning, operation and maintenance services to customers as per their need.
Some of the milestone projects on EPC mode completed by Elecon EPC are:
a)Dadri Thermal Power Station, A/c. NTPC
b)Mejia Thermal Power Station, A/c. DVC
c)Parli & Paras Thermal Power plant, A/c. Mahagenco
d)Kahalgaon Thermal Power plant, A/c. NTPC
e)Sabarmati TPS, A/c. Torrent AEC (Ahmedabad)
f)Mae Moh Mine - Thermal power projects at EGAT, Thailand
g)More than 100 KM length conveyors for Neyveli Lignite Corporation
h)Lehra Mohbat TPS, A/c. BHEL
Can you tell us about your vendor registration activities for the year 2015-16? Is it a regular exercise or an occasional one? How stringent are the norms when your company takes up such exercise?
Vendor registration for Elecon EPC is not a regular exercise as we are approved with almost all customers or employers. However, considering our operational advancement, we regularly register our changes with them.
Vendor registration for our bought outs is a round-the-clock activity. We are on our toes to find new vendors as well as update existing vendors in order to keep them abreast with the technological developments in the market.
In the present market competition, keeping things updated has benefitted us.