BHEL-NTPC JV to firm up biz plan

New Delhi: The Rs. 6,000 crore joint venture, BHEL-NTPC Power Projects, formed between Bharat Heavy Electricals (BHEL) and National Thermal Power Corporation (NTPC) for manufacturing power plant equipment, is set to take off.

The business plan for the venture is now being finalised and will be put up for discussion shortly. After it gets a formal nod, the joint venture will get a concrete shape ready to launch itself into the action mode. “The business plan is almost ready. The venture has already opened its administrative office in Noida, Uttar Pradesh. We will make a formal announcement in this regard shortly, possibly by the end of this month,” Minister of State for Power, Jairam Ramesh, said.

The joint venture has come after a long spat between the two companies over the supply of power equipment with the NTPC at one point of time wanting to set up its own facility in place.

However, the intervention at the highest level saw both public sector giants coming together to establish this new greenfield facility that would require an investment of Rs. 6,000 crore. The new venture is crucial to the interests of BHEL and NTPC as both have stiff challenges ahead for the XI Plan.

It was aiming at an annual capacity of 5,000 MW by 2013 and would produce boilers and turbines for power plants, Mr. Ramesh added.

Although the funding details are yet to be finalised, the debt-equity ratio would be at 70:30. The joint venture is also in the process of finalising a location for its new plant.

The process for recruitment of the CEO of the company had already begun and would be completed by July 31. The chairman for the new company could be appointed either from NTPC or BHEL, he said. The initial mandate for the joint venture is to take up engineering, procurement and construction (EPC) contracts.