State Of The Economy 2020

Trichy | Impact of PSU BHEL's fallout | State of the economy

The little temple town-turned fabrication hub flourished under the PSU, but now that relationship has run its course. What next?

Photographs by RA Chandroo

Trichy’s is a love story gone wrong. Not the wrong where the lover next door turns out to be a stalker and murderer. Goodness, what do people watch on Netflix these days! This is the more forgivable kind of wrong. Fidelity-in-the-age-of-Tinder kind of wrong. Only one side took their vows seriously. 

Fabricators here stayed painfully loyal to one of the biggest public sector units of the country, Bharat Heavy Electricals Limited (BHEL) while the Maharatna moved on. They served the PSU almost exclusively, while BHEL upgraded its products and couldn’t carry its partners along. To be fair, the fabricators’ fealty was from force of habit than unbridled passion for BHEL’s transformers and high-pressure valves, and that is always a bad call in love and business.

Back in the day…
Tiruchirapalli is known for fabrication, an identity it got from its association with BHEL. In the early seventies, the PSU looked to set up shop in south India. Trichy, being geographically well-connected and endowed with vast expanses of land, became BHEL’s location of choice. The heavy electricals maker began subcontracting the manufacturing of coal power plant components when it had excess orders. As business grew, these ancillary entities developed into full-fledged industrial fabricators. What also grew was their dependence on BHEL. 

Between 2008 and 2012, besides BHEL, major companies such as L&T and JSW were also pursuing power projects. However, being a government entity, BHEL enjoyed an advantage over private competitors. When bidding for a power plant tender, the government awarded the contract to BHEL even if the PSU’s bid was higher, even up to 15%, than the lowest offer. Given BHEL’s upper hand, Trichy’s ancillaries ramped up capacities to meet the upcoming demand. Some of the ancillaries considered this their best time in the business.

Understandably, BHEL fell into a comfort zone because it was the government’s child, and the parent would

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