BHEL, NTPC to set up joint venture entity

New Delhi: Equipment major Bharat Heavy Electricals Ltd (BHEL) and power generator NTPC Ltd have announced the formation of a joint venture to undertake equipment manufacturing and engineering procurement and construction (EPC) work for power projects.

NTPC-BHEL Power Projects, the proposed company formed by the two state-owned utilities, would invest around Rs 5,000 crore over the next five years to set up manufacturing capacity to produce equipment totalling a capacity of 4,000 MW annually.

“This joint venture will leverage the strengths and synergies of both companies,” Mr Ravi Kumar, Chairman and Managing Director of BHEL, said.

The company is looking to set up units at a port-based location either in Andhra Pradesh or Maharashtra, with sites in West Bengal also under consideration.

The two companies had entered into the joint venture agreement on December 17, 2007 and a supplementary agreement was signed on January 11, 2008. The venture shall have an initial authorised and paid-up capital of Rs 5 crore, equally subscribed by BHEL and NTPC.

Hiking capacity:

BHEL has already expanded its capacity to 10,000 MW per annum, from 6,000 MW earlier, and is currently working on hiking its capacity to 15,000 MW.

NTPC, as a generation utility, and BHEL, as an EPC contractor, have worked together on several domestic projects earlier, though without a formal partnership in place.

BHEL has designed and manufactured equipment that accounts for about 70 per cent of NTPC’s current installed capacity.