Two Pune-based companies Thermax Energy Performance Services (Thermax EPS) and Tata Honeywell Ltd (THL) have entered this new business. Both have tie-ups with US companies that have expertise in the performance guarantee business. Thermax EPS was first off the block and has recently signed performance guarantee contracts with Gujarat Glass and Morarjee Textiles.

Thermax EPS, is a joint venture between Thermax Limited and Energy Performance Services Inc., a subsidiary of PECO Energy Company of US.

Roaring to have a go at this business is Tata Honeywell Ltd (THL), which has just got into performance contracting guarantee. For Tata Honeywell it was a logical extension into performance contracting. Tata Honeywell is a leading supplier of industrial automation and controls. It also has a building control division which focuses on electronic control systems and automation requirements of commercial buildings. This year THL is expected to post a turnover of around Rs 200 crore of which building control division's share is around Rs 15 crore. The building control division is into electronic control systems for central airconditioning, fire alarm systems, access control systems and CCTV systems. Worldwide the $ eight billion Honeywell is a leading player in the performance guarantee business with clients such as Boeing, Caterpillar, NASA and the US army among others. In India THL's building control division will be getting into performance contracting. The customers segment would be big industries, ITcompanies, big commercial complexes, five star hotels and IT parks where intelligent buildings are in vogue. THL is offering not only performance contracting but overall facility improvement with moneyback guarantee. Says Kumar Kanitkar, vice president, building control, THL, "We will be able to bring in the synergy of the Tata group into performance contracting and deliver viable solutions". In commercial buildings airconditioners and lightings contribute to higher energy bills. Using aged and inefficient equipment and lack of capital for improving infrastructure lead to wastage of energy. Companies do not have the money to invest in energy conservation equipment but through the performance guarantee savings are generated which pays for the equipment.

THL ensures that improvements are paid through the customer's existing operating budget. Kanitkar is hoping to rope in banks and NBFCs for funding the investments required for performing the contract. Thermax EPS hopes that customers will invest in the project but is assuring them a payback period of three to five years.

"We are targetting medium size companies with turnover of anything between Rs 100 crore and Rs 800 crore where the energy bill as a percentage of the turnover is high and they are driven by a desire to cust costs," says Anand Benadikar, CEO of Thermax EPS. The Thermax EPS contract guarantees that the total cost of implementing the efficiency measures will be paid from the savings achieved. "Thermax EPS will not be pushing any of its own manufactured products and solutions will be customized as per requirements".