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EPC Contracting of
Balance of Plant
A Sensible Option
Sunil Bhat
22 May, 2012
BoP Systems
Conference, New Delhi
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1 SB | BoP Systems Conference | 22 May, 2012
Agenda
BoP the show stopper
Power Project Contracting Options
Pros and Cons of each Options
EPC Vs Package Route
L&Ts EPC business landscape in Power Sector
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2 SB | BoP Systems Conference | 22 May, 2012
Agenda
BoP the show stopper
Power Project Contracting Options
Pros and Cons of each Options
EPC Vs Package Route
L&Ts EPC business landscape in Power Sector
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3 SB | BoP Systems Conference | 22 May, 2012
BoP - the show stopper
BoilerIsland29%
TurbineIsland20%
CHP9%
AHP
4%
CoolingTower
4%
Water System4%
Fuel Oil System2%
Electrical7% C&I
1% Chimney1%
Civil Works15%
Spares3%Others
1%
BoP
51%
Cost break-up of a typical 660 MW
BoP Systems execution determines the
success of a power project on Time, Schedule
and Cost parameters
BoP contributes toapprox. 50% of the
capital cost thus
among the most
important cost pillar
While BTG island inTechnology &
manufacturing
intense, BoP island in
Integration & site
activity intense
Almost 74% of delayed powerprojects delayed due
to non-readiness of
BoP system
Source : CERC
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4 SB | BoP Systems Conference | 22 May, 2012
Agenda
BoP the show stopper
Power Project Contracting Options
Pros and Cons of each Options
EPC Vs Package Route
L&Ts EPC business landscape in Power Sector
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5 SB | BoP Systems Conference | 22 May, 2012
Power Project Contracting Structures
Entire project is broken into multiplepackages (close to ~ 25 40 packages)Multiple Packages
BTG is ordered as a single EPC packagehowever BoP is broken into multiple
packages
BTG - EPC
BoP - Multiple Pkgs
Two EPC orders placed.
One for BTG and the other for BoP
EPC BTG
EPC BOP
A Single EPC order for the complete powerplant project
Includes both BTG and BoPComplete EPC
BoP ordered in Multiple Package
BoP ordered as EPC
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6 SB | BoP Systems Conference | 22 May, 2012
Agenda
BoP the show stopper
Power Project Contracting Options
Pros and Cons of each Options
EPC Vs Package Route
L&Ts EPC business landscape in Power Sector
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7 SB | BoP Systems Conference | 22 May, 2012
Multiple Package Route
Developer
Contractor # nContractor # 1
Responsibility Matrix - Developer
Project
Mgmt
Interface
Mgmt
Intra Pkg
Engg
Intra Pkg
Co-
ordination
Advantages
Least cost ofPurchase
Total Control overindividual Vendor
Selection Total Control over
individual packagespecification
Responsibility Matrix - Contractor
Package Schedule Package Performance
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8 SB | BoP Systems Conference | 22 May, 2012
Multiple Package Route
Developer
Contractor # nContractor # 1
Responsibility Matrix - Developer
Project
Mgmt
Interface
Mgmt
Intra Pkg
Engg
Intra Pkg
Co-
ordination
Drawbacks
Requires large numberexperienced staff formicro level ProjectMonitoring
Team to havecompetency in ProjectManagement, InterfaceManagement
Large ordering cycletime
Concentrates onindividual packageguarantee parameters
Responsibility Matrix - Contractor
Package Schedule Package Performance
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9 SB | BoP Systems Conference | 22 May, 2012
Multiple Package Route
Developer
Contractor # nContractor # 1
Responsibility Matrix - Developer
Project
Mgmt
Interface
Mgmt
Intra Pkg
Engg
Intra Pkg
Co-
ordination
Successful with
Developers having in-house EPC teamexperienced inEngineering & ProjectManagement
Developers having EPCsubsidiary
Responsibility Matrix - Contractor
Package Schedule Package Performance
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10 SB | BoP Systems Conference | 22 May, 2012
EPC Route
ECPContractor
Developer
Contractor# n
Contractor# 1
Responsibility Matrix - Contractor
Project Management
Interface Management
Intra Package Engineering
Intra Package Co-ordination
Plant Level Performance Guarantee
Advantages
Single pointresponsibility
Integrated PlantLevel Performance
guarantee Less manpower
requirement fordeveloper
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11 SB | BoP Systems Conference | 22 May, 2012
EPC Route
ECPContractor
Developer
Contractor# n
Contractor# 1
Responsibility Matrix - Contractor
Project Management
Interface Management
Intra Package Engineering
Intra Package Co-ordination
Plant Level Performance Guarantee
Drawbacks
Higher initialcost
Less control onproject schedule
Less control overvendor selection
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12 SB | BoP Systems Conference | 22 May, 2012
EPC Route
ECPContractor
Developer
Contractor# n
Contractor# 1
Responsibility Matrix - Contractor
Project Management
Interface Management
Intra Package Engineering
Intra Package Co-ordination
Plant Level Performance Guarantee
Successful with
SEBs who donthave huge teamfor project
management
Private IPPs
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13 SB | BoP Systems Conference | 22 May, 2012
Agenda
BoP the show stopper
Power Project Contracting Options
Pros and Cons of each Options
EPC Vs Package Route
L&Ts EPC business landscape in Power Sector
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Package Route Vs EPC
Attribute Package Route EPC Route
Project Engineering External Consultant to beappointed. Owner bears
additional Cost
EPC Contractor
Responsibility
InterfaceEngineering
Owner has to co-ordinate.
Owner bears additional
manpower and risk
EPC Contractor
Responsibility
Probability of Timelycompletion ofProject
Low due to Multiple
vendors
High due to single vendor
responsibility and higher
stakes
Project Cost Uncertain : Default of evenone vendor adversely
impact project completionschedule
Assured : Minimal
variations expected
Project Management High cost as large staff tobe employed by Owner
Minimal cost as single
vendor employed
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Package Route Vs EPC
Attribute Package Route EPC Route
FunctionalGuarantees
Numerous : Owner to
handle multiple contractors
for equipment / system
level performance
guarantees
Key Plant level
performance guarantees :
EPC Contractors single
point responsibility
Benefits of designstandardization andoptimization
Difficult : Largely
dependent on Owners
experience / practices
Easy : EPC contractors are
better equipped & updated
to provide value for money
Selection ofReputed & reliable
Contractors
Difficult to maintain
uniformity in contractors
competence and capabilitylevels
Easy : Selection restricted
only to performing and
competent EPC contractors
After sales servicesSupport
Low : Small size contractor
/ vendors
High : Reputation at stake
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Single Point Responsibility for Design, Engineering,Supply, Erection & Commissioning
Simpler co-ordination requirement One point contact.Minimum staffing required from end user organization
Minimum Finance risk
Minimal schedule risk Least Interfacing related issues between sub systems,
thereby faster commissioning
Flexibility during engineering for design changes withoutaffecting overall schedule
Enforceable Guaranteed Plant performance Stiff Penalties that are levied as percentage of total package
cost is a big deterrent
EPC Value Proposition
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17 SB | BoP Systems Conference | 22 May, 2012
Agenda
BoP the show stopper
Power Project Contracting Options
Pros and Cons of each Options
EPC Vs Package Route
L&Ts EPC business landscape in Power Sector
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L&T Power: Many facetsL&T-MHI
STG
L&T-MHI
Boiler IslandL&T-Howden
Fans & APHs
L&T-S&L
Engineering
Gas
EPC
PipingCentre
Foundry
CoalEPC
/STGI
TPPC
ESP
L&T-BMH
-Coal HandlingPlant
-S/R, Wagon T
L&T-ECC/EBG
-E&I
-Control &Automation
L&T-Valves
-Valves &Fittings
L&T-HED-Heater
-Condenser
-Deaerator
L&TPOWER
In-house Capabilities are 85% of Total Power Plant Offerings
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Water systems
Fuel Oil System incl
Storage
Feed Cycle Equipment
Power Cycle Piping
LP Piping
CHP, AHP
Compressed Air System
HVAC
Fire Protection
LV Switchgear
Electrical BOP
Control rooms
Civil Works for Main
Plant, Power House &
BOP
Cooling Towers
Chimneys
Erection of Boilers STG /
GTG, ESP
Civil Works & BOP
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Civil & Construction
Extensive experience inconstruction of all types of
Power Plants
Coal based
Gas based Open Cycle
Gas based Combined Cycle
Co-generation
330 MW PPN CCPP
660 MW Sipat
Kayamkulam CCPP
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Steam Generators &
auxiliaries
GTG / STG & auxil iaries
HRSG
HP & LP piping
Ducting & refractory/ lining
Inland Transportation &
Stores Management at site
Welding new alloys - X20,
P91.
Erecting the first of any
type of Boiler in India
110, 200, 300, 500, 660 MW
Power Block Erection
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5x660 MW Adani Power, Mundra Boiler Erection
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4x600 MW Jharsuguda (Sterlite Energy Ltd.)
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2x 250 MW CESC Budge Budge 210 MW NEYVELI TPS
Chimney
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Induced Draft
Natural Circulation
Cooling Tower
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HP FW Heater LP FW Heater
Rectangular Condenser Circular Condenser
In-house manufacturing
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Technology based equipment for
Sizing & Conveying
Stockyard preparation machines
Wagon loading & marshalling system
Main Activ ities
Design & Engineering
Manufacturing & Supply
Construction, Testing &
Commissioning
Performance testing, training and after
sales service
Coal Handling Plants (CHP)
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CHP our track record
In Power Sector, 31 CHPs has been installed by L&T ti ll date
12 Track Hoppers ranging from 110 mtr to 310 mtr length
More than 100 KM conveying system upto 4000 TPH
58 Paddle Feeders upto 2400 TPH
69 Crushers upto 1875 TPH
13 Apron Feeders upto 1500 TPH
Largest capacity CHP in Power sector 3200 TPH for NTPC Barh (3 x 660 MW)
Wagon Shifter Indiabulls, Nasik 5x270 MW (under execution)
Asias longest Track Hopper of 310 mtr long at NTPC Kahalgaon & Barh
In house manufacturing facilities for key CHP equipment and dedicated vendor base
for other components
AMC/ O&M contracts
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CHP - Wagon Tippler
20 Wagon Tipplers up to 24 tips / hr
First Wagon Tippler supplied at Kothagudam T.P.P (Year 1987)
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BOOM LENGTH: 41 M
STACKING CAP: 3300 TPH
RECLAIMING CAP: 3750 TPH (PEAK)
CHP-Reversible Stacker Cum Reclaimer
29 Stacker Reclaimers upto 4000 TPH
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Switchyard
Design, detail
engineering, supply, erection, testing& commissioning :
33KV to 440KV Switchyards
220KV to 400KV Gas InsulatedSubstations
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Other Competencies
Station Switchgear, SPBD
Service Transformers, Non
SPBDs
MV / LV Swi tchgear
HT / LT Cabl ing
Illumination System
Earthing & Lightning
Protection
Switchboards (PCC / MCC)
C&I (including PLC, SCADA
& Telemetry, dr ives)
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33 SB | BoP Systems Conference | 22 May, 2012
L&T Value Proposition
BoilerIsland29%
TurbineIsland20%
CHP9%
AHP4%
CoolingTower
4%
Water System4%
Fuel Oil System2% Electrical
7% C&I1% Chimney
1%
Civil Works15%
Spares3%Others
1%
BoP51%
Cost break-up of a typical 660 MW
L&T In-house Capability
L&T has in-housecapability for Super-
critical & Ultra-
Supercritical BTG
for ratings upto
1000 MW
In addition, L&T hasmore than 85% of
BoP package
capabilities in-
house
Because of majorityin-house
capabilities, L&T is
best placed to
delivery projects onscheduled.
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