New NTPC, BHEL venture, NTPC-BHEL Power Projects incorporated

NTPC-BHEL Power Projects Pvt. Ltd, a joint the power equipment joint venture between two public sector majors - power equipment engineering company Bharat Heavy Electricals Limited (BHEL) and the largest power utility in India NTPC Ltd - today received its 'certificate of incorporation' from union minister of heavy industries and public enterprises Sontosh Mohan Dev and union minister of power Sushilkumar Shinde.

The two had signed a joint venture agreement on 17 December 2007 followed by a supplementary agreement was on 11 January 11 2008 (See: NTPC, BHEL to form JV for power sector EPC projects) The new venture will have an initial authorized and paid up capital of Rs5 crore equally subscribed by BHEL and NTPC. 

Speaking on the occassion, Dev said that the massive power capacity addition programme of the country would provide business opportunities to NTPC-BHEL Power Projects, which could carve a niche for itself to take up engineering, procurement and construction (EPC) contracts for power plants as well as supply of equipment and services for power projects.

To meet the capacity addition objective of 11th Plan, Shinde said the only option available was to pool all caacity resources available in the country in terms of machines, manpower, infrastructure, expertise and utilised at optimum levels to realise the ultimate objective of ensuring that the projects were commissioned on time. Reiterating the commitment of the government to create a strong manufacturing base in the country for manufacturing of supercritical units, expected NTPC-BHEL Power Projects Pvt. Ltd. would move forward in an accelerated manner to achieve its objective and thus contribute in a big way for the development of power and other infrastructure projects.

BHEL and NTPC have formed the joint venture company to undertake EPC contracts for power plants and other infrastructure projects, as manufacture and supply power industry equipment in India and abroad.

The massive power capacity addition planned for the 11th- and 12th- five year plans would require a large-scale ramp up of the domestic power equipment manufacturing capability in the country. BHEL has already expanded its capacity to 10,000 MW per annum and is currently implementing the second phase of capacity augmentation to 15,000 MW. The new JVC will further enhance the domestic capability for power plant capacity addition to help realise the Prime Minister's call of power to each village by 2020 .

NTPC and BHEL are both central government navratna enterprises with a large degree of synergies due to common ownership and complementary strengths. While BHEL's core competence is in engineering, manufacturing, erection and commissioning, NTPC's expertise lies in execution of large power projects and project management. The new company can expect to leverage their respective strengths and synergies and supplement the EPC and equipment manufacturing capacities of the promoter companies.