1 July 2013 year ROTEC, the gas turbine servicing market leader “Turbines & Diesels” Magazine, July 2013
Interview of Oleg Shevchenko, the Deputy General Manager in Power Projects, with the magazine “Turbines & Diesels”, July 2013

The market of gas turbine servicing is new to Russia. It is still in its infancy. One of the successful companies at this market is ROTEC, which has already implemented (in partnership with the Swiss company Sulzer) a number of projects in maintenance of the gas turbine units installed at the power generating facilities in Russia.

- Can you tell us more about the maintenance of the gas turbines? What is so unique about it?

Commissioning of the first module of the cogenerating plant at the North-Western CHP in St. Petersburg back in 2001 was a starting point of the combined cycle power generation. Carrying out a program facilitating the fulfillment of the capacity supply agreements expedited the process of implementation of the combined cycle technologies in the Russian power generating industry. Currently, a large number of gas turbines manufactured by the largest companies such as Siemens, General Electric, ALSTOM, etc. are in service.

Russian power generating companies put their stake on the combined cycle technology for a reason. These technologies accelerate the construction of new large-scale highly efficient power generation facilities within relatively short terms. For example, it takes usually 4-5 years to build a standard 300MW steam power generating module using coal as primary fuel, as compared with 2-3 years required for the construction of a similar combined cycle module. However, each coin has two different sides: on the one hand, it is short term of construction and high efficiency of the installed equipment; on the other hand it is relatively short service life and rather expensive maintenance.

Indeed, maintenance and repair of the gas turbines is very expensive, as compared with the reasonable cost of the equipment itself. Russian power generating companies have to take this factor into consideration. If in case with steam or hydraulic turbine the customer has more or less flexible maintenance schedule, the maintenance of the gas turbines has to be performed with strict adherence to the schedule. Violation of the maintenance schedule can have a detrimental effect on reliability and performance of the gas turbines. These factors, in their turn, have an impact on the financial expenses involved in maintaining the gas turbines.

- Oleg Viktorovich, what are the unique features of the Russian approach to servicing such turbines?

This type of service has been on the western market for a long time. It has been provided by the well-known independent international companies specializing in gas turbine maintenance. In Russia, the situation and the price formation at the market of these services are somewhat “wild”. Up until recently, only the original equipment manufacturers were providing this type of services in Russia being the unquestionable monopolists.

ROTEC is truly one of the pioneers in creating a market for maintenance and repair of the power generating gas turbines – the market represented not only by the original manufacturers but also by the service companies.

For historical reasons, the economic, financial and technological opinions and approaches of the Russian and foreign partners are poles apart. What we want to do is to bridge this gap. Therefore, we are trying to bring together two parties speaking different languages, in every possible sense…

- What do you think is a reason for such a difference in approaches?

Although every market is different, all of them follow the same economic rules. Russian market is unique in a sense of unconventional approaches of the Russian people to resolving any matters with their business partners. This is due to their views on the economy and production inherited from the Soviet past. Many top managers of the primary business and production sectors represent the generation lacking the concept of the market at the genetic level. The discussion between them and the representatives of the western business very often comes to a deadlock. Most of the foreign partners see Russia as unexplored threatening space…

We try to bring two of these poles together using our experience both in Russia and abroad. Usually, if our western partner used to run its business in Russia without our supervision, at its own risk, it resulted in quite complicated conflict situations that we had to resolve.

While providing maintenance services to major Russian customers, we learned more about their specific nature, incomprehensible for the western partners. For example, maintenance of a facility can be performed without advance payment, just on the manager’s word; costly projects can be commenced just because there is a letter of indemnity, which is not supported by signed contracts, well-known financial instruments hedging potential risks, etc. Such aspects of the human factor bewilder the representatives of the foreign companies used to red tape and strict business rules.

- Oleg Viktorovich, would you share a secret – how do your specialists manage to overcome such difficulties?

By educating both the customers and the western partners. We assume certain legal risks and teach our European colleagues how to act in Russian realities. Gradually, we succeed in teaching a lot of things to both parties. They start understanding each other!

Thus, ROTEC ZAO became one of the first companies at the emerging Russian gas turbine servicing market, which is not affiliated with the original manufacturers and can respond very quickly to the urgent needs of the customers in terms of repair and maintenance of the equipment. Currently, we are localizing the gas turbine servicing business in Russia at the Ural Turbine Works production facilities utilizing the experience and technological knowledge of the Swiss company Sulzer, which is also a member of Renova Group.

This comprehensive program is supposed to be implemented within the next 3-4 years.

- What do you think of the possible entry of your competitors – other independent service providers – at this market?

ROTEC is not concerned about competitive struggle. We invite other independent suppliers of services to this emerging market. Today we are one step ahead and are open to discussions. We are gaining good reputation among the Russian customers, who can see the advantages of being our partners. For example, we can definitely say that if our company was not represented in this sector of the Russian market, many gas turbine owners would find themselves under the influence of the original manufacturers and would suffer from unreasonably expensive maintenance costs.

In addition to reasonable price formation policy, we guarantee debottlenecking starting from delivery of the equipment, tools, spare parts, staff training and finishing with the full range of service maintenance on site with adherence to the European quality standards.

We have already implemented or implementing now a number of servicing projects at Mosenergo OAO, Fortum OAO, TGC-1, TGC-5, TGC-6, TGC-7, TGC-9. We have been gaining valuable experience while implementing these projects thus improving our performance for the good of the customers.

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